The reeling housing market has come to this: To shore it up, two Senators are preparing to introduce a bipartisan bill Thursday that would give residence visas to foreigners who spend at least $500,000 to buy houses in the U.S.
The provision is part of a larger package of immigration measures, co-authored by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah), designed to spur more foreign investment in the U.S.
Foreigners have accounted for a growing share of home purchases in South Florida, Southern California, Arizona and other hard-hit markets. Chinese and Canadian buyers, among others, are taking advantage not only of big declines in U.S. home prices and reduced competition from Americans but also of favorable foreign exchange rates.
To fuel this demand, the proposed measure would offer visas to any foreigner making a cash investment of at least $500,000 on residential real-estate—a single-family house, condo or townhouse. Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out.
The measure would complement existing visa programs that allow foreigners to enter the U.S. if they invest in new businesses that create jobs. Backers believe the initiative would help soak up an excess supply of inventory when many would-be American home buyers are holding back because they're concerned about their jobs or because they would have to take a big loss to sell their current house.This kind of bill would only speed up the dynamic that we've already begun to see in Texas, where the "new immigrant" is not a day laborer but an opportunistic investor. This shift may change the way we view immigration and immigrants in our country as we enter into a new century with new economic realities.
Either way, I'm always amused to see how far our politicians will go in their attempts to prop up old regimes. Here, they're basically willing to pull out all the stops in order to prevent a further deterioration in the housing market. Generally speaking, these sort of desperate attempts fail miserably, and serve only to create all manner of unintended consequences that we will later regret.
This kind of policy, when combined with ultra-low-interest-rate policy from the Fed (that serves to weaken the dollar against other currencies) will ensure that our primary "export" over the coming decades will not be any sort of product or service, but the very land that we live on. If more and more of our country is actually physically owned by foreigners, are we really even a country any more? And does it even matter?
Welcome to the 21st century, I guess--and welcome to the strange, existential questions that we never thought we'd have to ask ourselves.
[Wall Street Journal]