Category: Immigration

My Thoughts on U.S. Immigration Issues

My Thoughts on U.S. Immigration Issues

The most significant of the House of Representatives’ proposals is the “No Path to Citizenship” stipulation. What does this mean?
02/20/2014 04:19 pm ET Updated Dec 06, 2017

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The Republicans in the House of Representatives have released their proposals for modifications to our existing immigration laws to allow millions of undocumented, foreign-born workers who live and work in the U.S. the opportunity to file for status in the U.S. The most significant of their proposals is the “No Path to Citizenship” stipulation. What does this mean?

The answer is vague. However, we can infer that immigrants currently without lawful status will be given permission to live and work in the U.S. without fear of deportation. Beyond that, who knows? Will they be able to file for green cards at some future moment? Will they be able to bring their families to the U.S. to live with them?

Could it be that these new “standards” actually create second class, long-time guest workers with limited rights who may be subject to removal if a future Congress decides to take these limited — although tangible — rights away?

The House Republicans do not appear to be meeting the problems of our dysfunctional immigration system head on in an attempt to resolve it in a more permanent fashion. The U.S. Senate did just that last summer. Why not the House Republicans?

Political Fear

The answer to me is fear — political fear. The House Republicans have to offer something to avoid further alienating the voting members of the Hispanic and Asian populations in the U.S. who have come to view the Republicans as anti-immigrant, based upon their past positions. House Republicans are composed, in part, of a nativist and xenophobic faction that is more interested in forcing out these potentially new Americans than in including them. Yet, since Hispanics and Asians often have family here who do not have proper documentation and, therefore, work for substandard wages and under the radar, or worse, many have seen members of their extended families deported with no possibility of returning for a minimum of 10 years, if ever, the issue of immigration is compelling and personal.

If this issue is reflected in the voting booth, it is, therefore, of paramount concern to the House Republicans. So why not grant legalization and a path to citizenship to obtain the voting friendship of these and other ethnic groups?

Many Republicans believe that the Hispanic and Asian voting blocs are lost to them based on the Republican hostility in the past to the immigration interests of these blocs. Using this logic, a path to citizenship for undocumented workers living and working in the U.S. is merely a path to the creation of more anti-Republican voters.

A Double Tragedy

Remember Republican presidential candidate Mitt Romney’s famous adage that illegal aliens should be made to self-deport? This type of anti-immigrant jargon has weakened the Republican Party’s standing with crucial ethnic voting blocs, making it extremely difficult to win statewide and national elections in significant states such as California, Florida, and even Texas, long a “red state.”

To escape their reputation as anti-immigrant, House Republicans are trying to not create new voters while wooing the voting bloc of ethnic voters. Apparently, they have no confidence in their ability to communicate any new sincere friendliness to these potentially newest members of our society.

Thus, we have a double tragedy.

Immigrants continue to suffer with limited benefits under the House Republican proposals, just as the Republican Party, suffers from internal fears and factionalism that hinder saving its electoral future by promulgating a more forthright solution to our immigration problem.

What Do Immigrants Bring Us?

What Do Immigrants Bring Us?

05/06/2014 07:02 pm ET Updated Dec 06, 2017

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What do immigrants represent to the U.S. economy?

The rising tide of immigration floats the boat of the U.S. economy.

People do not immigrate to the United States to go on welfare!

Foreigners typically come to the U.S. to create a better life for themselves, be they fleeing from poverty or persecution, relocating to participate in a business opportunity, or coming to reunite with family members. Influxes of immigrants to localities that are immigrant-friendly tend to prosper more than those that are hostile. This is particularly true in stagnant areas that are losing population such as the Rust Belt.

  • An influx of immigrants into an area causes a reverse in population loss, resulting in an expanded workforce, rising home valuations, and decreased foreclosure rates. (Source: The Brookings Institute)
  • As immigration increases, so does economic growth in the largest metropolitan areas of the U.S. (Source: The Fiscal Policy Institute)
  • There is no significant relationship between the unemployment rate and the presence of immigrants who have come to the U.S. in the last decade. (Source: U.S. Census Bureau’s American Community Survey)

A review of the statistics of the H-1B non-immigrant worker program clearly demonstrates that immigrant workers come to the U.S. because there are new jobs for them to fill. They are not coming to steal existing jobs from U.S.-born workers.

An H1-B visa allows employers to hire temporary, foreign workers in specialty occupations. A limited number of H1-B visas are issued yearly. Applications may be filed starting on April 1st of each year, and are accepted until all visas have been allocated.

  • In April 2008, before the Great Recession, demand caused the H1-B filing window to close by April 5th — meaning that this category was filled in five days!
  • In 2009, in the depths of the Great Recession, H1-B filings were accepted until December 21, 2009, because there was no longer any pent up demand for this employment visa.
  • As the Great Recession began to recede, H1-B filings began to accelerate, so that by 2013, the application window slammed shut again on April 5th.
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  • For this calendar year, applications were only accepted until April 7, 2014.

It costs the U.S. taxpayer NOTHING to process and adjudicate immigrant applications.

United States Citizenship and Immigration Services (USCIS) operates under the principle of user fees. Applications for immigration benefits, such as green cards or waivers to prevent deportation, are paid for in advance by the person or employer requesting relief. The U.S. Congress has ordered USCIS to charge people what it costs to process and adjudicate a particular petition. For example, a petition by a U.S. spouse for his/her foreign husband/wife costs $420. The application fee for the green card in the U.S. costs an additional $1,070.

USCIS fees are a regressive tax against those least able to afford them.

A waiver of the application fee is available for certain immigration forms and for certain applicants, such as abused spouses. However, many of the people who might qualify for this relief are not able to do so due to extremely restrictive requirements. To qualify for this waiver, it is required that the applicant:

  • Establish that s/he earns less than 150 percent of Federal poverty guidelines as determined by the U.S. Department of Health and Human Services
  • Show receipt of welfare benefits
  • Establish humanitarian reasons to justify the application fee waiver.

Clearly, this is not a wide open door through which one can easily saunter!

Citizenship applications declined dramatically during the Great Recession.

In 2008, the high naturalization application user fee of $680.00 dissuaded applicants from applying for U.S. citizenship.

  • In 2007, almost 1.4 million naturalization applications were filed.
  • In 2008, as the Great Recession hit, only a bit over half a million applications were filed (Source: The Department of Homeland Security)

The weak economy, coupled with high user fees, lessened the ability of qualified immigrants to become citizens because they had to allocate their limited financial resources to more pressing issues such as paying their rent and feeding their families. U.S. citizenship firmly connects people to the U.S.A, and concomitantly stabilizes and strengthens communities where these new citizens live. Therefore, the decline in naturalization applications in 2008 could not have been beneficial to the social and financial fabric of the U.S. during such a profound economic crisis.

So what do immigrants represent to the U.S. economy?

Prosperity and stability…

Make EB-5 REALLY Work

Make EB-5 REALLY Work

Is PII “selling citizenship”? Is the current “at risk” EB-5 program really that different? I believe that the removal of “at risk” from PII would not be a great philosophic change from the existing EB-5 Investment Program.

The EB-5 program is a job-creating investment program that can lead to permanent residence for a foreign investor. There are two main concepts underlying the EB-5 program:

1) Job-creating economic stimulus program.
a. An investor must invest
i. $500,000 in a Targeted Employment Area, located in a specified rural or high unemployment area; or
ii. $500,000 in a Regional Center; (A regional center is defined as any economic unit engaged in the promotion of economic growth, improved regional productivity, job creation and increased investment. A regional center must be approved by US Citizenship and Immigration Services before it can accept investors and must explain how the investments it will accept will translate into job creation for US workers.); or
iii. $1,000,000 in any project.
b. Each investment must cause the creation of at least 10 new jobs or the 40% expansion of an existing business.
2) Vulnerability of the investment
a. All investment must be “at risk”, meaning that there can be no guaranteed return on investment.

The logic behind the second concept arises from the belief that, as a great and prosperous nation, the United States should not deign to sell citizenship to the highest bidder. Therefore, the EB-5 program comes with no guarantee as to the success of any particular investment venture.

THE EB-5 PROGRAM HAS BEEN A GREAT SUCCESS IN THE GOAL OF ECONOMIC STIMULUS. Real estate projects, ski and summer resorts, meat processing plants are examples of how EB-5 funds have been invested and have created jobs in the localities where these commercial ventures are located, as per CNN Money.

Economist Dr. Scott Barnhart published a study in EB-5 Investors Magazine on October 23, 2013 illustrating that 6000 visas issued through the EB-5 program would result in a $3.8 billion accretion of the GDP, with $532 million paid in Federal taxes, and $371 million in state and local taxes.

Note that the focus of these investments is on commercial ventures, even if a state or municipality is running a regional center. For example, the state of Vermont’s regional center is a major funder of Jay Peak, an all season resort in northern Vermont. The State of Michigan, has only recently created its own regional center, and should be focusing on real estate redevelopment and manufacturing projects. What do all of these projects have in common? They are all for profit commercial ventures; to truly maximize the benefit of the EB-5 Program, drafters should consider reexamining the philosophic underpinning of the EB-5 Program. If the goal is to bring foreign capital into the United States to the benefit of our economy, then a mechanism to more directly accomplish this should be created. What I propose is an additional EB-5 investment vehicle called the Public Infrastructure Investment (PII).

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Under this program, a minimum investment such as $1M would be required as an investment in a project run directly by a local, state or Federal agency. These projects could be for bridge reconstruction, a new school complex, a mass transit expansion or other major infrastructure projects. The benefits of investments in these types of municipal projects are two-fold:

1) These types of investments create long-term economic and safety benefits to an area,
and
2) These types of investments are not developed to provide an economic return to an investor.

It should be noted that the EB-5 investors typically do not enter into the program with the expectation of a market rate return such that they might expect to receive through a more conventional investment that does not offer an immigrant benefit. The rate of return on existing EB-5 investments is typically below market rate: a sign that investors are not participating in the EB-5 program for pecuniary gain. It is the expectation of the grant of permanent residence that makes the program so appealing, not Return on Investment.

Under PII, in exchange for the invested funds not being put at risk, an EB-5 investor would be guaranteed permanent resident status for himself and his family, subject only to criminal, immigration and national security background checks. Further, it would be possible to structure this PII program so that the EB-5 investors would be guaranteed their principal to be returned in full, minus a certain percentage of the investment, perhaps 5% after five years, in exchange for a grant of resident status for themselves and their families.

The benefit to the United States would be that government entities would be paying negative interest on short term loans dedicated to capital improvements.

The percentage of EB-5 investors who have lost all or part of their investments in legitimate projects is extremely low. For example US Citizenship and Immigration Services published statistics showing that in 2013 3,699 petitions were approved for immigrant investors for conditional resident status; only 943 were denied. Therefore, over 79% of the cases were approved for the initial two year period. Similarly, 844 petitions were approved in 2013, removing the conditional status and granting permanent resident status, while only 44 were denied; this is a 95% approval rate. These rates indicate that the “at risk” investment factor is not ultimately significant.

Is PII “selling citizenship”? Is the current “at risk” EB-5 program really that different? I believe that the removal of “at risk” from PII would not be a great philosophic change from the existing EB-5 Investment Program. Funds invested under the PII would be a more direct stimulus on the economy than the current EB-5 Investment Program in that they would not only create jobs, they would create public benefit—something missing as a primary focus of the existing EB-5 Investment Program.

The EB-5 Visa To Remain $500,000 For Two More Months

The EB-5 visa program has been renewed without reform until after the midterm elections.

KAPIN PLLC EB-5 immigration attorneysFor now, the minimum investment requirement for the EB-5 visa Regional Center Program will remain $500,000 until the sunset date on December 7, 2018.

The EB-5 Regional Center Program was renewed as part of the spending bill that President Trump signed on Friday.

The program may see reform as early as next year, however, it will likely be through USCIS rather than through Congress. Congress has so far ignored the program, renewing it as-is due to more pressing priorities like the Supreme Court nomination, immigration issues and tax reform.

Next year, USCIS may issue regulations that address the EB-5 Regional Center Program’s minimum investment amount, targeted employment area requirements, and investor eligibility.

While the Regional Center Program is constantly facing uncertainty, the EB-5 Direct Program is permanent. Foreign entrepreneurs can invest $1 million or $500,000 (in a targeted employment area) in a job creating enterprise to qualify for the Direct Program. The difference between the Direct Program and the Regional Center Program is that an investor in the Direct Program must take an active role in their business project, whereas, with a Regional Center project an investor can simply be a policy-maker.

Why apply early if the program has been renewed for two more months?

It’s always a smart idea to apply early to the EB-5 Regional Center Program for two main reasons. Applying early can lock in your spot if your country is currently facing retrogression or may face retrogression in the near future. Additionally, USCIS, may at any time, decide to address controversial program problems and issue regulations that change eligibility requirements or increase the minimum investment amount. The minimum investment amount has not increased since the program’s inception in 1990, not even to adjust for inflation.

For more information or news, send us a message.

Tanya Little: Timing is the Key for EB-5 Financing

Tanya Little
Tanya Little

The visa program known as EB-5 was established in the 1990’s for foreign investors who want to gain permanent citizenship in the United States. This visa is based on investing a minimum of $500,000 in projects that must create at least 10 jobs per investment. These investments are funneled through regional centers, which act as liaisons between the applicants and the immigration officials. Since 2008, the use and acceptance of the program has exploded, with nearly 11,000 applications submitted last year.

The rise of the EB-5 program coincides with the enormous wealth creation that has taken place over the past 15 years in China. Today, 85 percent of EB-5 applications are Chinese investors. U.S. commercial real estate developers have largely come to view these immigrant investors as a favored source of capital.

EB-5 investors’ main motivation of citizenry accounts for the relative flexibility and favorable terms granted to commercial real estate developers in the U.S. even when the investment must be legally at risk, according to program guidelines. Investors can pay additional money to obtain a temporary green card when the project begins. However, repayments to the investors are not released until their EB-5 visas are approved, so the investors are assuming a significant amount of risk.

Some predict that by July of this year, 10,000 applications for visas will have been received by the U.S. Immigration and Citizenship Services, meaning any additional applications won’t be processed until next year. Furthermore, the U.S.C.I.S. lacks the necessary infrastructure to properly process 10,000 applications for a program that had little appeal for years. In addition, rumors abound of the imminent censure, or even closing, of some very high-profile regional centers and investor recruiting shops.

The biggest issue is the inherent mismatch in the timing of a typical real estate development project and the time necessary to actually receive immigrant investor cash. Time is always of the essence for the developer; they need to keep in mind that immigrant investor applications may take up to 12 months or more. With the expected surge in applications this year, this bottleneck may get significantly worse.

Bridging the time gap with a bridge loan, in an equal amount to what is expected from the EB-5 investors, could be a solution. However, the universe of lenders willing and able to make such loans is not large. The interplay between the EB-5 rules and regulations makes such lending complicated.

The legislation behind this program requires it to be renewed by Congress every five years, with the next renewal coming this September. Even though the political landscape may be slightly turning against it, the general consensus is that it will again be renewed. However, commercial real estate developers will need to focus more energy than ever on solving the time gap between funding a development project and receiving immigrant investor funds.

Tanya Little is CEO of Hart Advisors Group. Contact her at tlittle@hartadvisorsgroup.com.