Trump’s ‘Gold Card’ Set Off Panic in an Unexpected Place: Real Estate;
DealBook Newsletter
The New York Times
Link to Article: Click Here
March 1, 2025 Saturday 23:10 EST
Copyright 2025 The New York Times Company All Rights Reserved
Section: BUSINESS; dealbook
Length: 2215 words
Byline: Sarah Kessler, Sarah Kessler is an editor for the DealBook newsletter and writes features on business and
how workplaces are changing.
Highlight: The president initially said his $5 million green card alternative would replace a visa for foreign investors
that has become a favorite financing tool of major developers.
Body
The president initially said his $5 million green card alternative would replace a visa for foreign investors that has
become a favorite financing tool of major developers.
President Trump’s plan to sell green cards for $5 million each, a program he is calling a “gold card,” has largely
been met with a shrug. It’s not clear exactly how the program would work, if it’s legal or how many potential
immigrants would really pay $5 million for a path to U.S. citizenship.
But in a niche area of dealmaking, alarm bells are blaring.
Howard Lutnick, the commerce secretary, said on Tuesday that the plan to effectively sell green cards would
replace the EB-5 investor visa, a favorite source of funding for major real estate projects.
Massive developments — from New York’s Hudson Yards to the San Francisco Shipyard to, yes, Trump Plaza in
Jersey City — have been financed in part by overseas investors applying to the EB-5 program, which grants
permanent U.S. residence. Such investors are motivated by a green card, not by maximizing returns, and so for
developers their capital tends to be less expensive than borrowing money from a typical commercial lender.
The real estate company owned by the family of Trump’s son-in-law, Kushner Capital, drew scrutiny for its use of
EB-5 funding during the first Trump administration.
Overall, the EB-5 program does not bring in a lot of money — about $4 billion last year in the context of the $28
trillion U.S. economy — but it represents a huge profit bump for a small but powerful political contingency: major
real estate developers. They are not likely to see EB-5 killed without a fight.
“Cheap capital is the crack cocaine to the real estate industry and probably every other industry,” said Matt
Gordon, the C.E.O. of E3iG, which advises both foreign investment-based visa applicants and U.S. companies
seeking funding.
“They and their rather large political donations are going to be very motivated.”
Some background: EB-5 visas were established in 1990 to encourage investment in rural and economically
depressed areas. Foreigners who invest either $800,000 or $1.05 million, creating at least 10 jobs, are eligible.
Initially, that meant directly creating 10 jobs. Now most companies meet the requirement by showing the overall
economy will gain 10 jobs as a result of each investor’s funding.
All sorts of companies can seek EB-5 investment — DealBook heard about pharmacies, hospitals, day care centers
and manufacturing plants that raised money through the program — but the vast majority are real estate deals.
News of Trump’s gold card plan sent this ecosystem reeling. “Naturally the whole world is panicking,” said Ishaan
Khanna, the president of the American Immigrant Investor Alliance, a group that lobbies on behalf of EB-5
investors. “As India and China woke up, my phone blew up.”
“Everybody I’m hearing from is like ‘rush’ — get in as much as you can, because who knows how long” the
program will last in its current form, Gordon said, “On both the sponsor side and on the immigrant side.”
Developers who qualify for the program win big savings. For example: One project Gordon is working on, a $100
million 19-story apartment building, qualifies for about $35 million of EB-5 funding. Traditional mezzanine debt
financing for such a project might come with an interest rate of 10 or 12 percent, Gordon said, but the developer will
pay 5 to 7 percent for EB-5 funding. “You’re really cutting, you know, 30 to 50 percent of your cost of capital, on a
rather significant portion of your capital,” he added.
On top of saving money, developers say the program has been crucial during periods like the financial crisis when
other funding sources become prohibitively expensive or scarce.
Unsurprisingly, the real estate industry has been one of the EB-5 program’s most ardent defenders. The National
Association of Realtors and the U.S. Chamber of Commerce lobbied against a bill introduced in 2017 that would
have terminated the program.
Such programs aren’t unusual. Seventy countries exchange permanent residency or citizenship for investments or
donations, according to Kristin Surak, an associate professor at the London School of Economics who studies socalled
golden visa and passport programs worldwide. In some countries, including Malta and Cyprus, the programs
represent a significant part of the economy.
Proponents point to the jobs created. Critics say the EB-5 program falls short of its goal to stimulate investment in
rural and distressed urban areas. Previous iterations allowed developers to gerrymander maps so that even
densely populated and highly employed districts like Hudson Yards qualified for preferable terms. A 2022 law ended
that practice and added new incentives to build in rural areas.
Would selling visas work better? Lutnick said on Wednesday that EB-5 projects “were often suspect, they didn’t
really work out, there wasn’t any oversight of it.” It’s true that there have been horror stories: Two investors who
raised $350 million from foreign investors for a massive development in Vermont, for example, were accused in
2016 of perpetrating the biggest fraud in the state’s history.
But according to a report from the Government Accountability Office that looked at pending petitions in 2021, less
than 1 percent were found to be fraudulent or posed national security risks (about 3 percent were investigated).
Additional safeguards were added in the 2022 law.
The gold card may have a different problem: A dearth of applicants. Participants in the EB-5 program expect to get
their $1 million investment back at some point, whereas Trump’s plan requires a $5 million donation that isn’t
returned.
The EB-5 program drew about 7,000 investments between April 1, 2022 to July 31, 2024, according to data
compiled by the American Immigrant Investor Alliance. Even if the gold card comes with a tax benefit, why would a
substantially larger group of foreigners — Trump said “maybe a million” — be willing to pay the much higher cost?
Many in the industry see Trump’s plan as unworkable. Trump would need congressional approval both to abolish a
visa program that was created by law and to allocate visas for a new one. “This is unpredictable,” Khanna said. “No
one truly knows where this is going.”
More than Trump’s recent announcement, which lacked specifics, many of the big players in the ecosystem —
including the companies that put together the funds, the developers and the lawyers — are focused on what will
happen in 2027, when the EB-5 program expires and needs to be renewed by Congress.
They’re betting on compromise. The players in such investments are hoping the gold card becomes an addition
rather than a replacement.
The idea may already be breaking through: By Wednesday, Lutnick had changed how he described the gold card
plan, saying it would “modify” the EB-5 program, but it was unclear what specifically would change.
— Sarah Kessler