EB-5 and the Immigrant Growth Machine

By Edward S. Smith, Ph.D.

The “immigrant growth machine”—a phrase describing those who work to spur growth in urban areas with special attention being paid to foreign capital, immigrant entrepreneurs, and economic development coalitions—is driving investment and job creation across the United States. 

This article offers a brief overview of the immigrant growth machine, and demonstrates the relationship between immigrant growth machines and the EB-5 Immigrant Investor Program. Central to this analysis is the fact that the EB-5 program has helped facilitate the attraction of entrepreneurs and investment to communities nationwide, and has created jobs in communities seeking to jump-start their economies through innovative economic development programs. 

EB-5 Supports Immigrant Growth Machine

The EB-5 program supports the immigrant growth machine in three key ways: First, as an important financing mechanism utilized to support economic development projects, it often leverages foreign capital to create jobs. Secondly, the EB-5 program also functions as a component of the growth machine due to its ability to facilitate and stimulate international entrepreneurship, particularly in urban communities across the United States. Lastly, due to its ability to align the interests of economic development practitioners and community stakeholders in support of attracting jobs and increased investment via immigrant populations and foreign investment, the EB-5 program serves as an integral part of the immigrant growth machine.

As an economic development concept explored by Jan Lin and Melody Chiong (2016), and inspired by Harvey Molotch’s (1976) work on urban growth machines, the immigrant growth machine describes the stakeholders who work in concert to spur growth in urban areas, with a focus on foreign capital, immigrant entrepreneurs, and economic development coalitions. 

Growth in the immigrant growth machine is defined by increases in economic activity and employment, and key actors include real estate developers, small business owners, and government officials. Economic activity attributed to the immigrant growth machine has been observed on the city and state levels, with leading metropolitan areas and gateway cities and states experiencing significant economic activity as a result of immigrant investment. 

The identification of a statistically significant relationship by Smith (2015) between the presence of immigrant populations and the EB-5 program offers further insight on the presence of immigrant growth machines in the United States. Through international investment and entrepreneurship, the immigrant growth machine—in conjunction with local economic developers—is attracting jobs that spur growth across the United States.

The EB-5 program supports the immigrant growth machine due to its ability to serve as gap financing for economic development plans across the country. Difficulties in accessing affordable financing for economic development initiatives, particularly after the financial crisis of 2008, has led real estate developers and community stakeholders to partner with immigrant investors and foreign economic developers to secure financing through the EB-5 program.

New York’s City’s Brooklyn Navy Yard

This financing not only helps diversify capital in economic development plans, it also serves as a key element of finance in real estate deals. A prominent example of this has been seen in New York City’s Brooklyn Navy Yard, in which EB-5 capital has been combined with government investment to finance the Navy Yard’s largest expansion since World War II, bringing thousands of jobs and millions of dollars of investment to Brooklyn. It is viewed as a national model for successful implementation of EB-5 capital in public-private partnerships. 

The success of the Brooklyn Navy Yard’s development plans is a clear example of the immigrant growth machine’s ability to spur job creation and foreign investment, and of the EB-5 program’s ability to support the immigrant growth machine by providing a meaningful contribution to the capital stack of large scale economic development projects.

A key component of the immigrant growth machine is its ability to stimulate entrepreneurship and increased economic activity. Innovative economic development programs, such as the EB-5 program, have supported immigrant entrepreneurship and economic activity in the immigrant growth machine.  

At the time of this writing, Chinese developers have been involved with nearly half of all the large-scale real estate deals in downtown Los Angeles (Piersen, 2016).  These developers are building skyscrapers and residential units, with many buyers of the residential units expected to be Chinese. In fact, Chinese buyers account for 12 percent of all foreign citizens who purchased homes in the United States in 2014 (Kim, 2015), with more than half of these Chinese buyers purchasing homes in California. The infusion of foreign capital into development plans, and the marketing of development projects to foreign nationals, has spurred construction, economic development and job growth in the immigrant growth machine.

Marshalling Resources of Economic Development Community

Perhaps most importantly, the EB-5 program is an important component of the immigrant growth machine due to its ability to marshal the resources of the economic development community, such as how the aforementioned Navy Yard project was able to leverage EB-5 investment to raise capital from governmental sources. This is not limited to the Northeast or the West Coast, as the economic development community in cities in the industrial rust belt, such as Cleveland and Pittsburgh, has been seeking out EB-5 investment for urban renewal projects and gap financing. 

Large-scale projects, funded by EB-5 investors with hopes of transforming urban areas, have been supported by developers, city planners and community groups because such projects create jobs and increase capital flows. Regulators and legislators have become integral members of the immigrant growth machine because of their efforts to target foreign populations as potential sources of capital and potential partners for economic development plans. They often support the pursuit of EB-5 investment, and lead efforts to improve the program to make it more effective as an economic development tool and more palatable to their constituents. 

In conclusion, the presence of immigrant growth machines across the United States explains the phenomenon of economic growth spurred by foreign nationals primarily in urban areas of the country. 

As an economic development program that raises capital and creates jobs through coalitions of immigrant entrepreneurs and economic development stakeholders, the EB-5 Immigrant Investor Program serves as an integral component of the immigrant growth machine, and a vital tool that can be used to transform communities nationwide.

In the coming months, as the nation debates the role of immigrants in the United States economy, it is important to recognize the successes of the immigrant growth machine, and the contributions that coalitions between immigrants and economic developers have made to spur growth throughout the economy.


Lin, J., & Chiong, M. (2016, February 9). Immigrant Growth Machines: Metropolitan Reinvention in Los Angeles. Retrieved from http://www.metropolitiques.eu/Immigrant-Growth-Machines.html


Molotch, H. (1976). The city as a growth machine: Toward a political economy of place. American journal of sociology, 309-332.


Smith Jr, E. S. (2015). State-level determinants of EB-5 Investment: a cross-sectional analysis (Doctoral dissertation, University of Delaware).


Pierson, D. (2016, August 26). They built towering new cities in China. Now they're trying it in downtown L.A. - LA Times. Retrieved from http://www.latimes.com/business/la-fi-0825-china-dtla-snap-story.html


Kim, E. (2015, September 21). Why the Chinese Market Crash Might Be Good for Downtown. Retrieved from http://www.ladowntownnews.com/news/why-the-chinese-market-crash-might-be-good-for-downtown

Edward Smith

Edward Smith

Edward Smith, Ph.D. is president of Boost Analytics LLC. He is currently expanding the scope of his doctoral research on the EB-5 program while providing EB-5 advisement to both clients and industry stakeholders. Prior, Smith served as Deputy Director of Development and Planning at the Brooklyn Navy Yard where he helped bring in millions in EB-5 investment and thousands of jobs to the project. A former Coro fellow, Smith has also worked to promote sustainable community development within the United States and overseas.