The City of Miami Regional Center held a housing summit on July 29, 2015 to discuss the implications of EB-5 and how it relates to housing, and in particular, workforce housing, affordable housing, mixed-use projects, tax credit issues related thereto, and various compliance issues as well. As part of the process, the discussions involved the following factors:
- The effect of the new legislation and how to prepare for same by making sure the project being sponsored is protected from the proposed minimum investment increase to $800,000 by filing a project exemplar before the new legislation becomes effective.
- Affordable or workforce housing would more than likely qualify for the TEA designation, given the fact that that this type of real estate project is located in less prime areas given the nature of the product itself.
- The potential advantage of the ability to obtain tax credits or rebates or grants in various fashions due to the nature of the product.
- The capital stack requirements related thereto and the availability of alternative government sponsored financing. As noted, there is no substitute for sufficient developer equity, the developer’s experience in the industry and, needless to say, the nature of the project itself.
- The utilization of historic tax credits which tie in to renovations of existing buildings.
- A discussion about student housing as an off-shoot of affordable housing and the tremendous benefits that student housing offers to the industry; in particular, the implication of an institutional support given the fact that the housing will be associated typically with a large university whereby there is typically a shortage of housing near university campuses. Furthermore, the EB-5 market demand for student housing is very favorable given the shortage of this specialty housing and the multi-family industry in general has been well received by the EB-5 industry.
- The conference pointed out the necessity of having a viable and competent regional center to monitor the process. Miami has put in place a significant degree of checks and balances to preserve the credibility of the program and has in effect already undertaken many of the types of procedures that the new legislation dictates.
- It is noteworthy that Miami is one of the few institutions in the country that actually manages a regional center that covers multiple counties and not just the county in which the city is located. Furthermore, the mayor of the city of Miami, Tomas T. Regalado, is very supportive of the regional center and promoting commerce and job opportunities for Miami and its surrounding areas.