Two and a half years ago I wrote a proposal that would have addressed a portion of the overhang of residential real estate in the USA.
Pretty simple idea.
Swap a US visa for a foreign national ‘s purchase of a property in the US.
Today we have Chucky Schumer, Senator, NY on the airways and in print with exactly the same proposal as I made back in 09.
From the WSJ (Link):
Way back then I sent my proposal to all sorts of folks in government. Given that Schumer is my Senator I sent a copy to him and never heard a word.
I don’t think that this concept is really going to change the direction of RE values, but it would have made some difference these past few years.
There would have been fewer defaults, smaller losses on housing values and significantly less red ink at Fannie and Freddie (now $140bn and counting). If the proposal had been adopted, economic activity would have been somewhat higher over the past 30 months.
I’m left wondering what Chucky did with my letters to him. I’d like to ask him why he waited so long to come forward with this plan. Maybe he does not read his constituent mail. I hope that he does not try to sell this as an original thought. It’s been in his in box for years.
The original article can be found here (link). I cut and past a copy below.
A Proposal to Stimulate the US Housing Market
In order to stimulate demand for residential housing the United States expands the existing EB-5 visa program to include immigrant investors who purchase a home in the US with a value of not less than $250,000.
The demand for this type of visa from non-residents could be substantial. It could exceed 100,000 per year. The current volume of unsold homes is in the range of 2,000,000. Therefore this proposal will address 5% of the problem per year. This by itself would be a significant source of stability for housing prices. Stability must come before recovery.
The following is a description of the existing EB-5 visa program.
Congress created the EB-5 immigrant investor visa category in the Immigration Act of 1990 in the hopes of attracting foreign capital to the US and creating jobs for American workers in the process.
There are three basic requirements as follows:
• First, the alien must establish a business or invest in an existing business that was created or restructured after November 19,1990
• Second, the alien must have invested $1 million ($500,000 in some cases) in the business
• Third, the business must create full-time employment for at least 10 US workers
This language could easily be amended/expanded to create demand for housing. The framework is there. This proposal re-directs the objectives but not the intent of Congress.
The devil will be in the details. If there was a will in Congress it could be done in a week. These laws already exist. We do not need a new Bill to do this. This proposal only addresses legal immigration.
There is another advantage to this approach. This proposal will not cost us a cent. That would be a first.