Terrorism Risk Insurance Extended for 7 Years
In a win for multifamily developers, Congress approved an NAHB-supported provision that reauthorizes the Terrorism Risk Insurance Act (TRIA) for seven years through Dec. 31, 2027, as part of fiscal 2020 appropriations legislation that was approved at the end of the year.
TRIA reauthorization offers stability for NAHB's multifamily and commercial real estate members by providing affordable and reliable terrorism risk insurance.
The legislation was initially enacted in 2002 to provide a federal backstop for insurance companies in the event of a major terrorist attack after many insurers started excluding terrorism events from their policies following the Sept. 11, 2001 terror attacks. The measure was extended for two years in 2005 and for another seven years in 2007. In 2015, TRIA was extended through Dec. 31, 2020. The latest action by Congress ensures the program will remain in place through the end of 2027.
Also of interest to multifamily developers, the fiscal 2020 spending bill extended the EB-5 Immigrant Investor program through Sept. 30, 2020.
The EB-5 program can help NAHB members obtain acquisition, development and construction financing by working with foreign investors who are seeking lawful U.S. residency.
Under the EB-5 visa program, foreign-born investors willing to invest $900,000 to $1.8 million in a U.S. enterprise that creates at least 10 full-time job within two years are eligible to receive permanent residency status for themselves, their spouse and all children under the age of 21.
Unfortunately, new regulations from the U.S. Citizenship and Immigration Services (USCIS) significantly raising the program's longstanding thresholds of investment and widening the gap between rural and urban amounts went into effect in November 2019. Immigrants seeking to utilize the EB-5 program now must invest a minimum of $900,000 (up from $500,000) in areas designed by the USCIS as high unemployment or rural areas. They will need to invest at least $1.8 million (up from $1 million) for economic projects in all other areas.
NAHB submitted comments expressing opposition to the regulations and urging more sensible amendments to the investment thresholds, among other reforms to the program. NAHB is hopeful for a positive resolution as congressional leaders continue working on a legislative agreement.