Investopedia defines a “renewable resource” as “a substance of economic value that can be replaced or replenished in the same or less amount of time than it takes to draw the supply down.” While it is applied to a broad variety of subjects, the term “renewable resource” invariably implies continuity, sustainability and an assurance that whatever the resource, it will not disappear in the foreseeable future.
In order to ensure a diverse and balanced future portfolio of foreign direct investment (FDI), South Florida needs to treat foreign investors as a “renewable resource,” ensuring the continued future future flow of job-creating dollars to the local economy.
While the U.S. has long been the preferred destination country for FDI, globalism, online financial management and other factors have made the U.S. even more attractive to foreign government funds, pension funds, companies and high net worth individuals looking for a safe place in which to invest. According to the U.S. Bureau of Economic Analysis, the United States today has more FDI than any other nation in the world, over $4 trillion dollars as of 2017.
But unlike other major American cities which have used FDI to educate their residents, create better jobs and improve infrastructure, FDI in South Florida has focused on selling condos to foreign buyers, tourism and building condos with EB-5 foreign investor dollars.
The tourism industry and condo market are vulnerable sectors; consider the radical reductions in both tourism and condo purchases from Russia and Brazil after their economies faltered.
Moreover, we seem to have forgotten the painful lessons learned less than a decade ago: South Florida’s residential real estate market fell flat on its face practically overnight.
According to Cranespotters.com, a “balanced” condo market is generally considered to have about six months of supply; yet today in Sunny Isles Beach alone, we have a three-year supply of new condo units on the market.
And consider the number of failed EB-5 projects in South Florida, including Miami’s own EB-5 Regional Center. After spending an untold number of taxpayer dollars from 2014 until 2018, the center was finally shut down after failing to generate a single investor dollar or a producing a single EB-5 investor visa. We can do much better than this, folks.
What South Florida needs is a “balanced portfolio” of long-term, reliable FDI which focuses on local job creation and community-building. We need to attract foreign investors by giving them a compelling “quid pro quo” that includes not only our stunning beaches and weather, but also the promise of an ever-improving lifestyle, community, and infrastructure… all of which means future-building through sustained and ever-evolving job creation.
In fact, we are already doing exactly this in South Florida, but it’s hard to compete against glimmering waterfront high rises for EB-5 investor dollars.
In 2011, an EB-5 regional center launched the Lake Point EB-5 project in Canal Point, an impoverished agricultural community in rural Martin County, on the edge of Lake Okeechobee. As of 2018, the EB-5 dollars aimed at the community generated an economic impact equivalent to the creation of more than 1,000 full-time new jobs, transforming the local economy.
EB-5 investors not only received their U.S. residency; they received the priceless satisfaction of seeing their investment dollars economically transform a very poor community.
By directing foreign direct investment to where it is most needed, everyone wins, and FDI truly becomes the “renewable resource” South Florida needs it to be.
José E. Latour is founding partner at LatourLaw, which has offices in Miami and Ho Chi Minh City, Vietnam. Latour, who is a former U.S. Consul to Mexico under the Reagan administration, handles business immigration.
▪ This is an opinion piece written for Business Monday’s “My View” space in the Miami Herald. The views expressed do not necessarily reflect those of the newspaper.
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