The Atlantic Yards real-estate project, in Brooklyn, New York, has attracted numerous opponents on both left and right. The main sources of opposition seem to be (1) the use of eminent domain to condemn homes and businesses and (2) tax breaks for corporations. If I may apply the blogger’s privilege of oversimplification, most liberals object to corporate tax breaks on principle and eminent domain in this case, while most conservatives object to eminent domain on principle and corporate tax breaks in this case. (New Jersey Nets fans also object because their team is going to move to Brooklyn when Atlantic Yards is built, but unfortunately, the Nets only have about 17 fans.)
But there is another factor at work in this case that should cause concern on both sides of the spectrum. As my friend Norman Oder points out, the program is
being expected to be financed through the rapidly growing EB-5 visa program, which essentially amounts to the United States selling visas in return for investment capital. Under EB-5, if a foreigner invests at least $500,000 (down from the original $1 million) in an officially designated “Regional Center” designed to promote growth, and the investment creates at least ten supposedly permanent jobs, the investor is entitled to a green card (subject to the usual security checks), meaning he can be a permanent resident of the United States. All of New York City, exclusive of Staten Island, is one such Regional Center; so are three entire states and many smaller areas.
In the case of Atlantic Yards, the developers need $249 million, which means that 498 wealthy Chinese will be able to buy green cards for themselves, or for anyone else. As a Chinese businessman quoted in Oder’s story says, “It is time for me to buy a good future for my son.” Here, too, left and right should find common ground in opposing a policy that gives the rich an easy path to a green card, especially when no skills or knowledge are required and the recipient doesn’t even need to have a job or speak English.
If we’re going to sell residency permits, the honest way would be to simply auction them off to the highest bidder. But the EB-5 program is a bad idea for other reasons. First of all, when the government creates a non-economic incentive for investment, such as a green card, capital will be allocated less efficiently; and second, the calculations that show how your $500K bought ten jobs may be no more reliable than the “jobs created or saved” by the various stimulus bills. Still, real-estate developers love EB-5, and politicians love real-estate developers; so we can expect to see an ever-growing number of well-off Chinese immigrants who understand that if you have enough money, you can always advance to the front of the line.