Trumps Gold Card Set Off Panic in an Unexpected Place: Real Estate

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.

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