The federal government created a program decades ago that would help direct foreign wealthy investors money (in exchange for residency) into large real estate projects for rural and degraded communities. Since 2005, some $15 billion of investments have been made through the program.

The only problem is that these funds have been invested more into luxury multifamily projects than for the rural communities the money was intended.

According to an analysis by professors at New York University, investments in the program are increasingly financing large-scale, luxury or entertainment-oriented real estate developments. Among them: nearly $1 billion gathered in the last year from 2,000 investors to build a Chinese-style casino in Las Vegas, $600 million from 1,200 investors for New York’s mixed-use Hudson Yards project and $150 million from 300 investors to construct the Beverly Hills Waldorf Astoria.

The program was intended to reward people for putting money into the United States. Projects that raised more than $1 billion were practically nonexistent in the program before 2010, Prof. Jeanne Calderon of New York University’s Stern School of Business wrote in a March report on the program. But when banks turned off the credit spigot around the 2008 financial crisis, developers started getting more creative in finding alternative financing.

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