A Note From The Legal Field: The Impact of Immigration on Real Estate
by Maria T. Schneider
September 18, 2017
What has changed for immigration under President Trump's administration?
In short - nothing and everything. No new legislation has been passed through Congress reforming immigration law. Because immigration law is all federal law, it is up to Congress to create new immigration laws, pass them, and the President to sign them.
Given the general rancor and dysfunction in Congress at present, most immigration attorneys and advocates are not optimistic that Congress will take action on immigration reform. However, the exercise and enforcement of immigration law allows government officers much discretion. While the law has not changed, the day-to-day life of immigrants in the USA has changed as government officers accommodate President Trump’s directives.
A. Legislative Proposals
Several bills have been introduced in Congress since the new session began in January 2017. A few of these proposals are:
- Temporary work visas: There are proposals to change the number of allotted work visas per year and the manner in which these visas are awarded. Some proposals call for a market-based cap to professional work visas, as opposed to our current hard caps. In addition, some bills call for the prioritization of cases for those positions paying a higher wage.
- Dreamers: On September 5, 2017, President Trump eliminated the DACA program created by President Obama. DACA allowed individuals brought to the US as children to work in the US and promised not to deport them. Now that DACA is eliminated, the Dream Act could be revived in Congress.
- Permanent Residence a/k/a Green Cards: Several different bills have been introduced in Congress to change the number of green cards available as well as the means by and timeline under which these green cards are granted.
B. Executive Actions
Since his inauguration in January, President Trump has issued several Executive Orders impacting immigration. It should be noted that executive orders, while impactful, are not law and can be rescinded by future administrations.
- Travel ban: Perhaps the order that received the most press and court attention was the travel ban, initially issued in late January 2017 and subsequently re-issued in March 2017. The initial portion of the travel ban case went before the US Supreme Court in June 2017 and part of the ban was allowed to stand while the Supreme Court waits to hear the case in full this fall.
- Border wall: President Trump repeatedly called for a border wall throughout the Presidential campaign in 2016 and in January issued an Executive Order directing the planning, design, and construction of a wall on the US’s southern border. Most recently, the President announced at a rally in Phoenix on August 22 that he would shut down the government if Congress failed to pass a budget which included funding for the wall.
- Increased use of detention: The US uses a “catch and release” model for many, non-criminal, undocumented immigrants. Individuals are released while they wait for an immigration hearing, which often takes years. The Executive Order calls for detention throughout this waiting period.
- Prioritizing deportation criminal aliens: The President’s Executive Order on interior enforcement focuses on the removal of foreign nationals based on criminal grounds, security grounds, fraud or misrepresentation, and expedited removal of newly arriving aliens.
How do these changes impact my clients?
For the REALTOR® working with foreign investors, three points should be noted that you can share with clients. First, your clients or prospective clients can expect heightened scrutiny and lengthier wait times at embassies and consulates, as well as at customs. Second, applications are receiving much more in-depth review, particularly on the source of funds for foreign investments. Third, expect fewer immigration applications and, thus, fewer foreign investor opportunities, due to the increased scrutiny and longer processing times.
A. Heightened Scrutiny and Long Wait Times at Embassies and Customs
Many foreign nationals report extra scrutiny at US Embassies and Consulates as well as when entering the US at Customs and Border Protection (CBP) ports of entry. Pragmatically, this means foreign nationals should expect long wait times at Embassies, airports, and land borders. Several travelers report the CBP has reviewed their social media accounts and checked their phones and other devices for information. Those who have traveled frequently to the US in the past for investment or other short-term business purposes are not exempt from this vetting. Immigration attorneys across the country report that their clients have been delayed and questioned extensively.
B. In-Depth Review of Case - Lawful Source of Funds
In addition, any foreign nationals who are planning to invest in real estate projects in the United States should expect a more intense and in-depth review of their case, in particular the lawful source of investment funds. It will be necessary for investors to provide a comprehensive accounting of the source of the funds invested.
C. Fewer Applications
Finally, the greater scrutiny and higher rate of denial of cases means fewer companies will endeavor to expand US operations and bring workers to the US from abroad. In 2015 and 2016 the US Citizenship and Immigration Service (USCIS) received over 230,000 H-1B applications for the 85,000 available H-1B visas. In 2017, H-1B applications were down to approximately 199,000. As US immigration becomes more difficult, many investors may decide to pursue investments in Europe, Canada, and other business-friendly countries with easier access.
Visa options for Investors
While the EB-5 is certainly the most well-known option for foreign nationals wanting to invest in the US, there are several visa options available to investors and entrepreneurs. Below is a short summary of the key options available to foreign nationals wishing to enter the United States:
A. EB-5: The EB-5 is available to foreign nationals from any country, but be aware that certain countries, namely China, have a backlog of applications. The EB-5 requires an investment of $1 million USD, $500,000 in certain limited situations. The investment must be truly at risk and create 10 permanent, full-time jobs in the US for US Citizens. The investor must manage the day-to-day activity of the company.
The EB-5 investor will initially receive a temporary, two-year green card and must apply at the end of the two-year term for a permanent, ten-year green card.
B. L Visa: The L-1 visa is for intra-company transferees. The L-1 recipient must have worked with a foreign company related to the US, sponsor company for at least 1 year in the last 3. Both the position held overseas and the position in the US must be managerial, executive, or a “specialized knowledge” position. It is also important to note that there are heightened requirements for newly established US offices.
C. E-2 Visa: The E-2 visas require that the sponsored employee and the U.S. company share a nationality that is listed on the US Department of State’s approved E-2 country list. The E-2 “Treaty Investor” visa requires an at risk investment of substantial capital in a US entity by the investor. The investor must own at least 50% of the US entity and must be entering the US to direct and develop the US entity.
Also, a new parole program was developed under President Obama which allowed for the temporary admission of entrepreneurs to create and initiate a US entity. However, President Trump delayed the effective date of this program and is considering cancelling the program altogether.
 Specialized knowledge is proprietary, narrowly held, advanced, or at an expert level.
The immigrant community is waiting with bated breath to see what happens next. President Trump has indicated he plans to heighten border enforcement, continue intense visa screening, and re-negotiate NAFTA, including its visa provisions. Foreign investors can expect continued scrutiny, long delays, and more enforcement on the immigration front.
About Maria T. Schneider
Maria T. Schneider is an Attorney with Musillo Unkenholt (MU). Maria’s practice includes both business and family-based immigration. Maria is a member of the American Immigration Lawyers Association and the Cincinnati Bar Association (CBA). She founded and is now the vice-chair of the CBA’s Immigration Law Practice Group and serves on the CBA Board of Trustees of the Cincinnati Bar Association. Maria is also an adjunct professor at the University of Cincinnati College of Law.
Maria T. Schneider
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