What is the fundamental issue?
With nearly 12 million undocumented immigrants in the United States, high levels of real estate investment interest on the part of foreign nationals, and the pending expiration of a major visa program for foreign entrepreneurs, immigration and visa reform is an issue with ramifications for the real estate community. The last major overhaul of immigration laws took place in 1986.
I am a real estate professional. What does this mean for my business?
The real estate industry benefits from a number of current visa programs that allow for tourism and foreign investment in U.S. residential and commercial real estate markets. Stable, prosperous, and secure communities enhance the nation and make it a destination of choice for those seeking to own, transact, lease and use real property.
NAR policy supports the rights of foreign citizens to own U.S. real property, opposes laws/regulations that impede that the free flow of capital, urges resolution of the undocumented immigration issue, as well as enactment of visa reforms that encourage investment in U.S. real property for business or personal reasons.
Comprehensive immigration reform has the potential to impact the economy, including commercial and residential real estate markets, in a positive manner. Foreign investors and immigrants who make a capital investment in real property and businesses that may help stimulate, stabilize, and strengthen real estate markets across the nation should be encouraged to invest and allowed to spend longer periods of time in the United States. In addition, some have argued that resolving the status of undocumented residents already in the United States has the potential to boost the national and regional economies as those individuals are able to openly seek work, invest and purchase homes and property.
NAR’s ‘Principles for Immigration Reform" were the work of a 2012 Presidential Advisory Group (PAG). Approved by the NAR Board of Directors at the May 2012 NAR meeting, NAR’s immigration policy principles support:
- The rights of foreign citizens to acquire, own and sell U.S. real property and the right of U.S. citizens to acquire property outside of the U.S.;
- The free flow of international capital for real estate and opposes laws and regulations that impede that flow;
- Application of the same set of rules under the U.S. tax system to all resident owners of U.S. real estate;
- Organized real estate’s involvement in the immigration reform debate to the extent necessary to support the creation of thriving communities and enhance the U.S. as a destination of choice for those seeking to own transact, lease and use real property; and
- Timely federal resolution of undocumented immigration that includes (i) securing U.S. borders to prevent illegal entry, (ii) allowing for the flow of legal immigration to accommodate the labor needs of the US economy, and (iii) settling the status of undocumented immigrants in a way that acknowledges their presence in the U.S., their role in the economy, and their historic contribution to U.S. society.
Immigration reform is a top priority of the Trump Administration and many in Congress. This was also the case in 2013 when the House failed to take up the issue despite Senate approval of a comprehensive immigration reform bill. Without consensus, the outlook for comprehensive reform is unclear.
Most Recent Comprehensive Immigration Reform Legislation
The last concerted effort to enact comprehensive immigration reform was in 2013. Drafted by a bipartisan group of eight Senators, S. 744, "The Border Security, Economic Opportunity, and Immigration Modernization Act", the measure was approved by the full Senate. The so-called "Gang of Eight" included Senators Schumer (D-NY), McCain (R-AZ), Durbin (D-IL), Graham (R-SC), Menendez (D-NJ), Rubio (R-FL), Bennet (D-CO), and Flake (R-AZ).
The bill included number of real estate-related provisions of interest to NAR. These included language that permanently reauthorized the EB-5 immigrant investor regional center pilot program, made changes to the H-2B visa program which is important to the economies of many second home and resort communities, and created two new non-immigrant retiree visas.
The retiree visa provisions were first proposed in 2011/2012 by Senators Schumer (D-NY) and Lee (R-UT) in two bills: S. 1746, "The Visa Improvements to Stimulate International Tourism to the United States of America Act (VISIT-USA Act)", and S. 3199, "The Jobs Originated through Launching Travel Act of 2012 (JOLT Act)."
As a part of S. 744, these provisions would create (1) an non-immigrant Canadian retiree visa that would allow Canadians 55 years and older who have a rental agreement for lodging or own a U.S. home to stay as long as 240 days each year, and (2) an non-immigrant retiree visa for foreign nationals 55 years of age or older who purchase a principal residence (or a personal residence plus other residential properties) valued at $500,000 or more and who agree to stay in the U.S. for a period of not less than 180 days per year.
The Senate immigration reform bill was sent to the House for consideration but was not taken up. Rather the House Judiciary Committee considered a series of immigration-related single issue bills that did not advance. At this time, the outlook for comprehensive immigration reform is uncertain at best.
Investor Visa Legislation
The EB-5 Investor Visa Regional Center Program is a longstanding pilot program administered by the U.S. Citizenship and Immigration Service. The regional centers and the traditional EB-5 visa process provide foreign nationals with the means to obtain a U.S. permanent residence visa after 5 years by investing a minimum of $500,000 or $1 million respectively and creating or preserving 10 or more American jobs. While the traditional EB-5 program is permanently authorized, the regional center program is a pilot that needs to be reauthorized. The most recent reauthorization extended the program until September 30, 2020.
Bills have routinely been introduced in recent years to make changes to the regional center program to address criticisms of the program, but little progress has been made. As the program has grown in visibility due to press coverage of its role in large scale development projects in major urban markets and questionable marketing efforts abroad, critics have become more vocal. In January 2017, Senators Grassley (R-IA) and Feinstein (D-A),respectively the Chair and Ranking Member of the Senate Judiciary Committee, introduced S. 232, a bill that would have terminated the EB-5 regional center program and reallocated its visas to the other employment-based visa classifications. Most recently, on September 24, 2019, Senator Chuck Grassley (R-IA) and Senator Patrick Leahy (D-VT) introduced the EB-5 Reform and Integrity Act of 2019, which includes reform and long-term reauthorization of the the EB-5 Regional Center Program. There are also currently ongoing discussions with other Senate offices on their efforts to develop reforms that could garner the necessary support.
In late December, 2019, Congress passed and President Trump signed into law two appropriations bills that fund the federal government through FY 2020, thereby extending the EB-5 Regional Center Program until September 30, 2020.
On April 22, 2020, Pres. Trump signed an Executive Order - in response to the novel coronavirus epidemic - to halt all immigration and visa programs for a limited time period. The EO specifically exempted the EB-5 program and allowed it to continue unhindered.
Investor Visa Regulation
On July 24, 2019, a Final Rule to reform and modernize the EB-5 program was published in the Federal Register:
The Department of Homeland Security (DHS) is issuing this rule to codify existing policies and reform parts of the EB-5 program. This rule provides priority date retention to certain EB-5 investors, increases the required minimum investment amounts and reforms targeted employment area (TEA) designations.
Business Issues Policy Committee