Thursday, June 25, 2015

Harnessing Private Capital for Job Creation: An Analysis of the EB-5 Program

A new report by U.S. Policy Metrics/Hamilton Place Strategies highlights the program as a net job creator and budget-neutral catalyst for efficiently bringing private investment into the U.S. at a time when other policy channels have fallen short. Authors Steve McMillin, Miachel Solon, and Matt Mcdonald concluded that the EB-5 program generated a minimum of $5.2 billion in private investment between 2005 and 2013. In 2013 alone, it generated at least $1.6 billion in private investment and 31,000 jobs. Other analyses relying on Input-Output (I-O) models find even more jobs will be created with this level of investment.

The report shows The EB-5 program has been a catalyst for job creation following the great US Recession. In the first three years after the crisis, Hilton, Hyatt, and Starwood Hotels all turned to EB-5 financing. The EB-5 program is all private capital and the program itself is funded through user fees, not taxes. Overall, the EB-5 program incentivizes investment in these regions that include pockets of high unemploy­ment through TEAs. The real value of the program, however, is not the number of people who come to the Unit­ed States, but how their investments leverage job creation. It also states that effectively increasing the 10,000 visa cap could have significant economic benefits to our country.

The report cites an analysis on EB-5 eco­nomic impact that examined a selection of projects in numerous industries com­pleted by a variety of region­al centers conducted by MB Consulting, LLC. The study found that 83 regional center proj­ects from across the Unit­ed States and the Mariana Islands were able to produce $15 billion in investment and create 103,685 jobs from 2011 to 2014. While high levels of investment and job creation were concentrated in states with large populations, states such as North Carolina were still able to generate $160.4 million in investment and 2,741 jobs with projects focused on cold storage, continuous care, and hotel construction. The EB-5 pro­gram impacts states across the country.

You can read the entire report commissioned by the EB-5 Investment Coalition here: “Harnessing Private Capital for Job Creation: An Analysis of the EB-5 Program.”

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