6 ms·

The summary is that through some insane gerrymandering, the Hudson Yards project is lumped in with a bunch of low-income areas in Harlem. This means that foreig

The summary is that through some insane gerrymandering, the Hudson Yards project is lumped in with a bunch of low-income areas in Harlem. This means that foreign investors only need to invest $500k to qualify for a visa program that would normally require a $1M investment. What's unclear from the article is how extensively this exception was used (that is, how many <$1M investments were accepted). The article says there were 3,200 foreign investors who qualified for the EB-5 through Hudson Yards, for a total of $1.2B invested. That's an average of $375k per investor, which makes no sense -- $500k is the floor. It might be that the 3,200 number was derived by dividing the $1.6B (that includes the still-accepting-investors phase 3) by the $500k requirement for the TEA (Targeted Employment Area). Without real stats it's hard to see how bad this is -- "buying your way in" is maybe a tough pill to swallow for people who have tried to immigrate, but the $1M EB-5 path is open regardless of zoning shenanigans.

rb808 8y ago
The worst thing is people aren't paying $500k, they're investing $500k, so probably will get most of it back again. It really costs them nothing.
- conanbatt 8y ago
  Would you feel better if they just paid 500k for a visa?
  - Scoundreller 8y ago
    Like a tax? Yes.
    - conanbatt 8y ago
      So its a quantitative issue for you, not qualitative. If they loaned more without interests its equivalent.
      - paulgb 8y ago
        I feel differently about people cutting the immigration line by paying a tax than by loaning money to a high-end development. It's not about what it cost them, it's about where the money goes.
        jp555 8y ago
        Where does the money go as tax? Isn’t most of it paid out to private businesses that supply the government? Maybe payroll is a bigger expense?
        Scoundreller 8y ago
        https://en.m.wikipedia.org/wiki/Government_spending_in_the_United_States https://en.m.wikipedia.org/wiki/Government_spending_in_the_U... But the government could also cut some other tax, putting a small amount of money into everyone’s pocket relatively equally.
        conanbatt 8y ago
        That 0.0001% reduction in income taxes...
        Scoundreller 8y ago
        Better than giving a lot of money to a very select chosen few.
        daniel-cussen 8y ago
        Much more than that. Comes to around $16 per wage earner.
        conanbatt 8y ago
        You can get more by seizing all the property of foreigners directly. After all the US has a strong military.
- selimthegrim 8y ago
  Probably - see http://america.aljazeera.com/articles/2015/1/30/chinas-louisiana-purchase-new-orleans-own-battle-of-algiers.html http://america.aljazeera.com/articles/2015/1/30/chinas-louis... I think some of the money in question even ended up in DC condos.
- tim333 8y ago
  Usually the 500k is an interest free loan to the developer so it doesn't cost much unless the developer scams you or goes bust which has happened a fair bit. On the other hand it doesn't really hurt the US much to let a few wealthy investors live there.
  - Scoundreller 8y ago
    Just make sure your loan ranks senior enough and you should do okay if they go bust.
    - tim333 8y ago
      >In the last three years, the U.S. Securities Exchange Commission has brought hundreds of millions of dollars’ worth of actions against EB-5 fraudsters, including: a $350 million assets freeze against a Vermont ski resort, a $79 million charge against an unregistered Boca Raton, Florida broker-dealer, a $125 million asset freeze against a Seattle skyscraper developer, a $68 million judgment against a U.S. energy company, and an $89 million fraud case against a Chicago immigration attorney. (Forbes https://www.forbes.com/sites/russellflannery/2018/08/20/whats-ahead-for-the-fraud-tainted-u-s-eb-5-visa-program/#4c6459a71618 https://www.forbes.com/sites/russellflannery/2018/08/20/what...) One unfortunate thing for the investor is that as well as losing money they can lose the green card and get kicked out.
- z2 8y ago
  Let's say permanent residency for the family has a value, say $100,000. Can one make a scheme where multiple people pool their money together into a fund, which goes under the name of the lucky EB-5 investor? The EB-5 investor pays $100,000 out of pocket, and this goes to the other investors, who get 20% returns! Essentially, the EB-5 investor uses others as a financing option to buy a green card without needing $500k upfront.
  - davchana 8y ago
    $100,000 is almost there near the correct figure. For context, guys from Punjab India spend upfront $50,000 for journey from home to USA, Via south america & then Mexico, reach US, spend or agree to anything between $10-40k bail bond, start earning & paying off all this.
- deleted 8y ago
  [deleted]
- bko 8y ago
  Why's it bad? I think immigrants bring a lot into this country and we should have more immigrants. And if you're worried about immigrants stressing the welfare system, this method selects for those with greater means and less likely to rely on these programs
  - deleted 8y ago
    [deleted]
  - rescripting 8y ago
    This isn't about immigration. It's bad because this program was designed to inject investment in to economically depressed areas with high unemployment, not downtown Manhattan. This also means the investments are not as "risky" as likely was intended. They'll almost certainly make it back, with dividends, because its NYC not rural Arkansas.
JJMcJ 8y ago
Also from article, there is a cap of 10,000 for EB-5 visas, and visas for family members count against the cap. So it is possible that Hudson Yards sucked up an entire year of visas and investment intended to support poorer areas, like Harlem itself, that is Harlem for real, not the crazy map which was shown in the article.
tim333 8y ago
Under EB5 you can get green cards for the wife and kids too so probably there were 2400 investments of $500k and 800 spouse/kids. There is no motivation to invest more than the minimum as there are quite a lot of strings attached. Something like 98% of the investors are Chinese. I looked at doing it myself - its actually not a bad deal if you want a green card and have the money.
- andrewla 8y ago
  > There is no motivation to invest more than the minimum as there are quite a lot of strings attached Can you give more information here? Is there a duration for which you cannot earn income on the investment or something?
  - tim333 8y ago
    I guess it varies by the scheme but the ones I've seen are loans that don't pay interest for a start. Wikipedia has info https://en.wikipedia.org/wiki/EB-5_visa https://en.wikipedia.org/wiki/EB-5_visa
Thorrez 8y ago
>The article says there were 3,200 foreign investors who qualified for the EB-5 through Hudson Yards The article says >Related solicited investments from some 3,200 foreign visa-seekers It's unclear to me what the definition of "solicited" is.

rb808 8y ago

The worst thing is people aren't paying $500k, they're investing $500k, so probably will get most of it back again. It really costs them nothing.

conanbatt 8y ago
Would you feel better if they just paid 500k for a visa?
- Scoundreller 8y ago
  Like a tax? Yes.
  - conanbatt 8y ago
    So its a quantitative issue for you, not qualitative. If they loaned more without interests its equivalent.
    - paulgb 8y ago
      I feel differently about people cutting the immigration line by paying a tax than by loaning money to a high-end development. It's not about what it cost them, it's about where the money goes.
      - jp555 8y ago
        Where does the money go as tax? Isn’t most of it paid out to private businesses that supply the government? Maybe payroll is a bigger expense?
        Scoundreller 8y ago
        https://en.m.wikipedia.org/wiki/Government_spending_in_the_United_States https://en.m.wikipedia.org/wiki/Government_spending_in_the_U... But the government could also cut some other tax, putting a small amount of money into everyone’s pocket relatively equally.
        conanbatt 8y ago
        That 0.0001% reduction in income taxes...
        Scoundreller 8y ago
        Better than giving a lot of money to a very select chosen few.
        daniel-cussen 8y ago
        Much more than that. Comes to around $16 per wage earner.
        conanbatt 8y ago
        You can get more by seizing all the property of foreigners directly. After all the US has a strong military.
selimthegrim 8y ago
Probably - see http://america.aljazeera.com/articles/2015/1/30/chinas-louisiana-purchase-new-orleans-own-battle-of-algiers.html http://america.aljazeera.com/articles/2015/1/30/chinas-louis... I think some of the money in question even ended up in DC condos.
tim333 8y ago
Usually the 500k is an interest free loan to the developer so it doesn't cost much unless the developer scams you or goes bust which has happened a fair bit. On the other hand it doesn't really hurt the US much to let a few wealthy investors live there.
- Scoundreller 8y ago
  Just make sure your loan ranks senior enough and you should do okay if they go bust.
  - tim333 8y ago
    >In the last three years, the U.S. Securities Exchange Commission has brought hundreds of millions of dollars’ worth of actions against EB-5 fraudsters, including: a $350 million assets freeze against a Vermont ski resort, a $79 million charge against an unregistered Boca Raton, Florida broker-dealer, a $125 million asset freeze against a Seattle skyscraper developer, a $68 million judgment against a U.S. energy company, and an $89 million fraud case against a Chicago immigration attorney. (Forbes https://www.forbes.com/sites/russellflannery/2018/08/20/whats-ahead-for-the-fraud-tainted-u-s-eb-5-visa-program/#4c6459a71618 https://www.forbes.com/sites/russellflannery/2018/08/20/what...) One unfortunate thing for the investor is that as well as losing money they can lose the green card and get kicked out.
z2 8y ago
Let's say permanent residency for the family has a value, say $100,000. Can one make a scheme where multiple people pool their money together into a fund, which goes under the name of the lucky EB-5 investor? The EB-5 investor pays $100,000 out of pocket, and this goes to the other investors, who get 20% returns! Essentially, the EB-5 investor uses others as a financing option to buy a green card without needing $500k upfront.
- davchana 8y ago
  $100,000 is almost there near the correct figure. For context, guys from Punjab India spend upfront $50,000 for journey from home to USA, Via south america & then Mexico, reach US, spend or agree to anything between $10-40k bail bond, start earning & paying off all this.
deleted 8y ago
[deleted]
bko 8y ago
Why's it bad? I think immigrants bring a lot into this country and we should have more immigrants. And if you're worried about immigrants stressing the welfare system, this method selects for those with greater means and less likely to rely on these programs
- deleted 8y ago
  [deleted]
- rescripting 8y ago
  This isn't about immigration. It's bad because this program was designed to inject investment in to economically depressed areas with high unemployment, not downtown Manhattan. This also means the investments are not as "risky" as likely was intended. They'll almost certainly make it back, with dividends, because its NYC not rural Arkansas.

JJMcJ 8y ago

Also from article, there is a cap of 10,000 for EB-5 visas, and visas for family members count against the cap. So it is possible that Hudson Yards sucked up an entire year of visas and investment intended to support poorer areas, like Harlem itself, that is Harlem for real, not the crazy map which was shown in the article.

tim333 8y ago

Under EB5 you can get green cards for the wife and kids too so probably there were 2400 investments of $500k and 800 spouse/kids. There is no motivation to invest more than the minimum as there are quite a lot of strings attached. Something like 98% of the investors are Chinese. I looked at doing it myself - its actually not a bad deal if you want a green card and have the money.

andrewla 8y ago
> There is no motivation to invest more than the minimum as there are quite a lot of strings attached Can you give more information here? Is there a duration for which you cannot earn income on the investment or something?
- tim333 8y ago
  I guess it varies by the scheme but the ones I've seen are loans that don't pay interest for a start. Wikipedia has info https://en.wikipedia.org/wiki/EB-5_visa https://en.wikipedia.org/wiki/EB-5_visa

Thorrez 8y ago

>The article says there were 3,200 foreign investors who qualified for the EB-5 through Hudson Yards The article says >Related solicited investments from some 3,200 foreign visa-seekers It's unclear to me what the definition of "solicited" is.