Senator Charles Schumer (D-N.Y.) at a rally.
Sen. Charles Schumer (D-N.Y.) wants rich immigrant homebuyers to invest in the U.S. (Photo Credit: CC BY/Amanda Hatfield/Flickr)

As the U.S. housing market continues to flounder, senators Charles Schumer (D-N.Y.) and Mike Lee (R-Utah) have drafted a bill that would give residence visas to immigrants who spend at least $500,000 on an American home. The bipartisan bill, which will soon be considered by Congress, is intended to attract added foreign investment in the U.S.

Hard-hit markets show foreign flavor

Areas of the country where the housing market has sagged the most, including South Florida, Southern California and Arizona, have shown a foreign flavor when it comes to those who are buying. Chinese and Canadian immigrants and others have reportedly jumped at the opportunity to buy low and take advantage of favorable exchange rates.

Five-and-a-half percent of all Miami, Fla., home purchases were made by foreign buyers in July, notes industry data firm MDA DataQuick. Non-native investors accounted for 4.3 percent of home sales in Phoenix, Ariz., during the same period.

In total, international buyers paid $82 billion in U.S. residential real estate costs for the year that ended in March 2011. That’s up from $66 billion the year before, says the National Association of Realtors.

Flexibility for home and rental property

Real estate market analysts see the Schumer and Lee bill adding to the demand. If an immigrant pays at least $500,000 for the purchase of residential real estate, such as a single-family house, condo or townhouse, a residence visa is given. Applicants can either spend the entire amount on one house, or as little as $250,000 on a home and the rest of the $500,000 on other residential real estate such as rental property.

The proposed legislation would complement existing visa programs that allow immigrants to enter the U.S. if they invest in job-creating new businesses. Schumer and Lee’s bill will not automatically grant immigrants work visas, however.

Americans are concerned about jobs

Backers of the bill hope an influx of immigrant home buyers will fill the void left by Americans who have held back from buying.

“This is a way to create more demand without costing the federal government a nickel,” Schumer told the Wall Street Journal.

Warren Buffett supports bill

High-profile supporters like Warren Buffett have been pitching ideas for attracting rich immigrants to the U.S. for some time.

“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,” Buffett told PBS’s Charlie Rose in August 2011.

Yet as Realogy Corp. CEO Richard Smith puts it, Schumer and Lee’s plan is unnecessary. He claims foreign investors don’t need any more incentive to buy homes in the U.S., and there are Americans willing and able to buy, but the down economy has held them back.

Schumer says don’t send jobs to China

Sources

Firedoglake: http://news.firedoglake.com/2011/10/20/grabbing-at-straws-more-non-core-housing-fixes-proposed/

Huffington Post: http://www.huffingtonpost.com/2011/10/20/visa-house-real-estate_n_1021582.html

National Association of Realtors: http://www.realtor.org/press_room/news_releases/2011/05/foreign_buyers

Wall Street Journal: http://on.wsj.com/qmpcWp

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