Washington – The US government may be clamping down on a "cash for visas" green-card program that drew fire from critics even while giving a boost to the construction industry in many recession-battered markets, according to The Daily.
The program, known as EB-5, gives wealthy foreigners the chance to obtain citizenship by investing between $500,000 and $1 million in ventures as varied as wind farms, ski resorts, gas stations and office towers. Two years after the investment, the visa recipient must prove that his or her money created at least 10 jobs for a chance at citizenship.
Critics slam the program as a "cash for visas" scheme, but an increasing number of developers have called it their saving grace in the wake of the financial crisis that caused construction financing to dry up.
"We're using EB-5 because it's the only money available," Henry Liebman said. He has used the program to build more than 30 projects in an industrial section of south Seattle, including a two-building retail and office development called Homeplate Center, and now is looking to use it as source of funding for projects in four other states.
The niche program, created in 1990 and currently open to 10,000 investors and their family members per year, has exploded since the financial crash left America pockmarked with stalled construction sites.
Nationwide, US Citizenship and Immigration Services (USCIS), which administers the program, has approved 219 development zones -- rural areas or areas of supposedly high unemployment, where money can be raised through the EB-5 program at the discounted $500,000 per investor rate. That is up from just 11 zones in 2006. California has the most with 58; Florida is second with 20.
But the agency increasingly has denied applications to create new development zones, officially called "regional centers," and issued a letter last week saying it was toughening its standards.
During the first quarter of fiscal year 2012, the agency denied 61 percent of the applications for new regional centers -- 22 applications in total -- compared to 39 percent during fiscal year 2011.
USCIS spokesman Christopher Bentley cautioned against drawing conclusions about the spike in denials, noting, "It's only a three-month window."
But the agency also sent a letter last week saying it would be demanding more evidence that certain types of projects, such as office buildings and retail space built for tenants, actually would create new jobs rather than just provide a new building for existing jobs to move into.