P
resident Donald Trump's proposal to sell green cards for $5 million has sent shockwaves through the real estate industry. The plan, dubbed the "gold card," aims to replace the EB-5 investor visa program, which has been a key source of funding for major projects. However, the higher price tag is causing concern among developers who rely on the cheaper alternative.

    The EB-5 program allows foreign investors to fund U.S. projects in exchange for residency and work permits. It's been used to finance high-profile developments like Manhattan's Hudson Yards and Trump Plaza Residences in Jersey City. The program costs significantly less than Trump's proposal, with investment amounts set at $1,050,000 or $800,000 for targeted areas.

    For real estate developers, the EB-5 program is crucial as it provides cheap capital that can turn losses into profits. "Cheap capital is like crack cocaine to the real estate industry," says Matt Gordon, CEO of E3iG. The industry's reliance on foreign investment has also raised concerns about political influence and donations.

    The EB-5 program was established in 1990 to attract investment for rural areas, with initial requirements based on creating new jobs. Over time, the rules have evolved, and investors now contribute to overall economic growth rather than just specific job creation.