EB-5 Targeted Employment Areas in California

TEAs in California have changed since the new data release at the start of May. For example, according to California’s new data, the city of Oakland is no longer a TEA, even though it is one according to the Bureau of Labor Statistics’ data. (According to California, now only certain census tracts in Oakland are TEAs.)

The new data release applies to 2010 census tract boundaries and is based in part on American Community Survey (“ACS”) labor force data averaged over the years 2007 to 2011. California’s previous data applied to Census 2000 census tract boundaries and was based on Census 2000 labor force data. Therefore, although some areas may have the same TEA status this year, many have changed.

USCIS has issued at least one RFE in which it appears to reject the use of any data older than the previous calendar year. California’s ACS data is averaged over five years. It is also not the most recent data available, which is ACS data covering 2008 to 2012. And, as noted above, California’s use of ACS data for cities is conflicting with data published by the Bureau of Labor Statistics, which may lead some investors and project developers to conclude their projects are in TEAs when, according to California’s data, they are not.

Also, unlike other states, California will only permit 12 census tracks or less to be averaged. This significantly restricts the TEAs available. For example, the area between the high unemployment neighborhoods of Hunters Point and the Tenderloin in San Francisco could qualify as a TEA if all of the census tracts could be averaged together.