Though many people don’t realize it, real estate development relies heavily on international investors who choose to invest their money in the United States, but that may be coming to an end, with particular consequences for the city of Miami. That’s because the United States just increased the cost of an EB-5 visa – a two-year conditional green card designed to invite investment. Previously set at $500,000, an EB-5 visa will now cost $900,000; it will also increase the investment minimum from $1 million to $1.8 million for projects outside economically depressed areas.
Miami’s International Appeal
While real estate developers more broadly object to the new EB-5 visa regulations, Miami is uniquely vulnerable to these changes for several reasons. That’s because the city is especially popular with international investors at every level, from single family homes and condominiums to major developments. In particular, the state sees a lot of cash investors from Central and South America, and Florida generally does whatever it can to encourage international investors to spend their money there.
One way that Florida encourages international investment is through a recent law permitting online notarization of documents. The state is one of a small number that permits this practice, which can minimize the amount of international travel, and thus the costs, required of investors coming from abroad. Other states that permit this practice include New York and Texas. Unfortunately, with the increased costs of a visa and subsequent projects, the ability to use a digital notary service may not be enough.
Support For International Investors
For foreign investors who are still interested in pursuing projects in Miami, it’s often a good idea to work with experienced experts who can support you through the EB-5 visa process. One real estate agency that offers an EB-5 visa process is Manhattan Miami; their agents are familiar with international investment opportunities in the Miami area, as well as Targeted Employment Areas that are ideal for development projects. Having a dedicated professional to guide you through the process can significantly smooth over the larger application process and also save you money in the long run.
While the changes to the EB-5 visa program are largely framed as a way of keeping up with inflation since the older price points were set, others believe that they are designed to limit international investment in the United States. This is a contentious approach, however, because the investments are specifically targeted at creating jobs. A significant portion of the visas are even designed to bring jobs to areas with high unemployment. However, there is a clear issue for political figures who may not want to be seen as relying on foreign money to support the domestic economy.
It’s quite possible that the kind of investors who could afford an EB-5 visa before the recent changes will not be deterred by the higher price point, but at this point we can’t be certain that the change won’t drive investors elsewhere. This would be hard on the country as a whole, but would place a special level of strain on areas like Miami that have a high proportion of international investors.
The next few years will provide a baseline sense of how serious the cost increase is and what kind of economic impact these changes will have going forward.