by Michael Kester, Originally Published in the Fall 2021 Regional Center Business Journal
As of the date of this article, the EB-5 Immigrant Investor Program Modernization Final Rule that was published by the Department of Homeland Security (DHS) and took effect November 21, 2019 remains vacated. Furthermore, the Regional Center program was allowed to lapse by Congress. Based on these two realities, only the Direct EB-5 program remains in effect, and the targeted employment area (“TEA”) standards for the Direct EB-5 program are reflective of the pre-November 21, 2019 rules (with USCIS permitting States to once again certify TEAs at an investment level of $500,000).
For ease of reference in this article, we use the terms “$500K TEA standards” and “$900K TEA standards” to mean the following:
- The “$500K TEA standards” mean the TEA standards that are currently in effect (i.e., $500,000 minimum investment for projects in a TEA; with each state authorized to designate TEAs using census tract combinations determined by the state)
- The “$900K TEA standards” mean the TEA standards that were recently vacated by a federal judge (i.e., $900,000 minimum investment for projects in a TEA, requiring USCIS determination of TEA status and restricting tract aggregation to “directly adjacent” tracts only.
While the $500K TEA standards do provide more flexibility, there are also challenges due to the unpredictability and differing TEA approaches of the individual states. Notably, the TEA standards for rural projects did not change under the Final Rule and are thus the same under both the $500K TEA standards and the $900K TEA standards. Therefore, this article focuses only on the issues with respect to high unemployment TEAs.
