Florida house by Charlie Vinz
Two members of the U.S. Senate have suggested a plan to support the weakening U.S. housing market by giving residence visas to foreign investors who purchase American residential property worth at least $500,000.
Senators Charles Schumer (New York) and Mike Lee (Utah) are introducing this provision as part of a larger package of immigration measures, according to the Wall Street Journal. The provision would complement a similar Green Card program for foreigners who invest in new businesses that generate new jobs. “This is a way to create more demand without costing the federal government a nickel,“ said Senator Schumer.
The U.S. housing market is experiencing a recession as both home sales and home prices are balancing at the bottom line. However, there’s potential to improve the situation of the falling U.S. housing market through foreign investment. Residential sales to foreigners and recent immigrants reached $82 billion in the 12 months between April 2010 and March 2011. That represents a $16 billion growth over the previous year.
Statistics of the National Association of Realtors show that foreign investment has represented an increasing share of home purchases in the hardest hit markets, such as South Florida, Southern Carolina, and Arizona. Apparently, Chinese and Canadian buyers are benefiting from both a decrease in prices and a profitable exchange rate. About 31 per cent of all international residential real estate investors buy property in Florida.
Requirements for Residential and Working Visas
The proposed plan should support foreign demand by offering non-immigrant visas to foreigners who spend at least $500,000 in cash (no mortgages will be allowed) on U.S. residential property (a single family house, condo, or townhouse). Potential buyers would need to buy at least one property worth $250,000 or more that would serve as their primary residence and could fill up the rest of the required $500,000 through additional rental properties.
A B1/B2 visa to the United States
by Wikimedia commons
However, this is not a work visa and the purchaser has to stay at the primary residence for at least six months (not necessarily consecutively) out of the year. If the prospective buyer wants to be employed in the USA, he or she has to apply for a separate work visa. This means that foreign investors would have to be particularly rich. “The bill does not limit people from being productive,“ said Senator Schumer. “It simply prevents them from coming here and taking jobs that otherwise would go to Americans.“
Of course, the prospective buyer has to undergo the standard visa procedure, including criminal background checks. Investing foreigners will be allowed to bring a spouse and any children under the age of 18, but they could not receive any U.S. government benefits and once they sell the property, they have to leave the country. Brian Phillips, spokesman of senator Lee, says, “We would prefer that people of means live here and buy our groceries, our gas, and invest in local economies.“
The measure has several high-profile supporters, including Warren Buffett, who told PBS’s Charlie Rose in an August interview, “If you wanted to change your immigration policy so that you let 500,000 families in but they have to have a significant net worth and everything, you´d solve things very quickly.“