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How Mega-Project Financing Tools Gerrymander Distressed Communities

The developers of Hudson Yards received $1.2 billion in financing from the EB-5 program, all made possible by a map that gerrymandered the project into the same neighborhood as Harlem public housing.
May 2, 2019, 5am PDT | James Brasuell | @CasualBrasuell
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Kriston Capps reports on the financial deal that helped finance the Hudson Yards mega-project in New York City. Bolstering a point that heavily criticized design choices are not the component of the project most deserving our contempt. Capps explains that reasoning:

Without their knowledge, the residents of a number of public housing developments helped to make Hudson Yards possible. The mega-luxury of this mini-Dubai was financed in part through a program that was supposed to help alleviate urban poverty. Hudson Yards ate Harlem’s lunch."

Specifically, the project raised at least $1.2 billion of its financing through a controversial investor visa program known as EB-5. This program enables immigrants to secure visas in exchange for real estate investments. Foreigners who pump between $500,000 and $1 million into U.S. real estate projects can purchase visas for their families, making it a favorite for wealthy families abroad, namely in China. EB-5 is supposed to be a way to jumpstart investment in remote rural areas, or distressed urban ones.

Related Companies, the developer of Hudson Yards, "raked in" at least $1.2 billion in EB-5 funds for the project, despite the project being "nobody's idea of distressed."

So how did Related Companies manage to qualify for the project? A highly gerrymandered map, created by Empire State Development, the economic development agency for the state of New York.

As note by Capps, the Hudson Yards project is one symptom of larger problems with the EB-5 program, and not just an example of systematic failures of New York real estate.

Sophie Kasakove provides additional follow-up coverage of Capps's reporting, tying the EB-5 story of Hudson Yards to controversies created by the use of tax increment financing in Chicago.

Full Story:
Published on Friday, April 12, 2019 in CityLab
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