Buy a House, Get a Visitor Visa?

I have been promoting a “buy a house, get a visa” program for several years, so I was initially pleased to see a new bill on this theme from Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah).

…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.

On closer inspection, however, the bill is very weak. Most importantly, the visa would simply allow the buyer to live in his or her house but would not allow them to work in the United States. Pathetic.

I also liked Matt Yglesias‘s spin on this:

The larger issue, however, is that the Schumer/Lee proposal would deny the new immigrants the right to work in the United States. As with other restrictions on high-skill immigration, this is essentially a form of class warfare against less educated Americans. We should be clamoring to increase the supply of foreign-born doctors, lawyers, engineers, and other highly educated occupations as a way of increasing the real wages of America’s factory workers, janitors, waitresses, carpenters, and retail clerks.

Addendum: Canadians are not impressed with the offer.

Comments

Retire to the USA is what it sounds like.

Also might even include a few rich parents sending their kids to college in the US.

Wouldn't they get an education visa easily enough anyway?

Not for the kids, for the parents to visit the kids.

Congress does appear to be moving forward on some bills to make it much easier to get a green card if you get a STEM advanced degree, according to some recent news reports.

I do agree with Matt on this issue.

Whatever the merits, I don't see that letting some rich foreigners buy a second home in the US for > $500k constitues "class warfare on less educated workers." There may be other aspects of immigration policy that could fit that label but this isn't one of them. If anything this would lead to greater spending and demand for services in some communities. It's basically just an export.

Yglesias shuts his brain off when talking about immigration. It appears to be part of the requirements of the open-borders religion.

It is not buying real estate that is class warfare. it is not letting them work that is keeping wages high for well educated people compared to the wages less educated workers. In a serviced based economy the price of goods is less important than the numbers of hours you must work to pay for an hour of labor of other people. That is why the growing income inequality matters.

Thank you for elucidating. I think the argument is way too attenuated to constitute class warfare, even before you think about the actual numbers of new entrants, and actual numbers of hours they would theoretically work, the actual jobs they might take and the real people they might compete with. Class tiddly-winks might be a more accurate assessment of the impact.

From the pool of foreigners who can buy a $500,000 house Take out the retirees, the rich people who are diversifying out of the political risk of their native land, the pop stars and fashion designers and high level executives and bankers who don't need a US residence to do business in the US, the professionals who aren't licensed in the US, the people who can qualify separately for a work visa anyway. How many people are left?

>Yglesias shuts his brain off when talking

Fixed it for you.

Matt,

That is so true. Note what MattY said

"The larger issue, however, is that the Schumer/Lee proposal would deny the new immigrants the right to work in the United States. As with other restrictions on high-skill immigration, this is essentially a form of class warfare against less educated Americans. We should be clamoring to increase the supply of foreign-born doctors, lawyers, engineers, and other highly educated occupations as a way of increasing the real wages of America’s factory workers, janitors, waitresses, carpenters, and retail clerks."

Of course, if you suggest reducing the supply of unskilled immigrants to help "America’s factory workers, janitors, waitresses, carpenters, and retail clerks" you are a racist, xenophobe, nativist, etc.

Not the buying the house, its letting them buy the house but not letting them work that constitutes class warfare (I believe that he's using the phrase as a bit of a joke here).

Joan made the point first, whoops.

Letting them buy a house is not the class warfare. Not allowing wealthy foreigners to work in the US is what Matt is calling class warfare. An influx of wealthy foreign professionals would both reduce the cost of professional services and increase service employment, both of which would be of benefit to less educated workers.

If decreasing the supply of high wage immigrants to the U.S. constitutes "a form of class warfare against less educated Americans", then what do you call increasing the supply of low wage immigrants?

I was surprised to see the following article (nicked from the Mexican newspaper Reforma, which is gated). Basically, it says that buying a property in one specific development in McAllen, TX will qualify Mexican purchasers for an EB-5 investor visa (or a permanent residency, the article is not clear). Use the translator of your choice:

Incluyen 'depas' visas a EU

Reforma Ciudad de México (5 octubre 2011).- El Centro Regional USA Now lanzó un programa para que mexicanos adquieran departamentos en preventa, en McAllen, Texas, con un valor mínimo de 500 mil dólares, y obtengan su residencia permanente en Estados Unidos.
Para iniciar el trámite, los interesados deberán comprobar que tienen los recursos suficientes y confirmar que no tienen antecedentes criminales. También deberán realizar un pago inicial de por lo menos 200 mil dólares, así como desembolsar otros 40 mil dólares para iniciar el proceso migratorio, el cual incluye una rigurosa investigación por parte de las autoridades estadounidenses, según Marco Ramírez, director del Centro USA Now. La visa se otorgará de forma condicional por 2 años, tiempo en el que los aplicantes deberán pagar impuestos y no cometer ningún crimen. Cada año, el Gobierno de EU ofrece 10 mil visas tipo EB-5 para inversionistas, de las cuales 3 mil están disponibles a través del programa de Centros Regionales. Los Centros Regionales son empresas privadas designadas por la Oficina de Inmigración y Control de Aduanas de EU para operar un programa de inversión en áreas geográficas determinadas. "Tenemos la responsabilidad de atraer inversión extranjera a nuestro país y crear empleo para poder restablecer la economía", comentó Ramírez. Agregó que con la crisis y el desplome del mercado inmobiliario estadounidense, los mexicanos han volteado a ese país para invertir. Otro factor ha sido la inseguridad que se vive en México, pues se ha notado una creciente demanda de mexicanos por adquirir vivienda en EU para evitar este fenómeno, señaló Gabriel Mora, director general de Adobe Bienes Raíces, la inmobiliaria encargada de comercializar el proyecto en McAllen. El proyecto, llamado Amira, consiste de una torre de 22 pisos y 152 condominios, e incluye gimnasio, salones, cocina, centro de negocios y dos albercas, además de cuatro pisos de estacionamientos y comercios en la parte baja. "Es un vehículo que creamos; no cualquier desarrollo que esté en preventa tiene esta característica, tenemos una licencia federal que nos permite hacer el acuerdo de que a través de una inversión puedas recibir una residencia en EU", dijo el director de USA Now. De acuerdo con Elías Olivares, diseñador del desarrollo, la construcción del complejo comenzará en diciembre de este año y finalizará en 2 años.

The EB5 is a green card granting visa, so its both. But It's supposed to be for investments that provide permanent employment, so I don't know what's going on there.

Whatever happened to racism in America! It seems to have nearly disapeared now that everything is about class warfare these days.

I blame it all on the Irish.

Yes, let's jack up home prices and depress incomes at the same time.

what makes anyone think that large numbers of people with lots of money actually want to come to the US right now. If I was wealthy in India, China, or elsewhere, I'd just stay there.

This would have worked a few years ago, but last I checked, all of the available skilled worker visas are no longer being snatched up the way that they used to be.

Great policy for 2007. useless policy for 2011.

Because we're dengue-free. Because being very rich, but surrounded by extreme poverty isn't as much fun as being middle class.

+1

Even rich people in Shanghai have to breathe the air there.

nonsense.the rich in india now have gated communities/cities. they no longer have to live amidst slums

Maybe someone wants out of Greece?

I don't think America's position relative to China and India has changed that much in the last 4 years.

Because in those countries, if you are rich, you are a target. Here, you can live a relatively safe, healthy, and clean life. Have you been to any of those countries?

I suggest we call this the "Let Mexican Druglord Zillionaires Enter the Country Legally" Act.

Yeah, because the last thing we want is for house prices to fall to their market clearing levels. The rich cannot be allowed to become poor.

This is banana-republic economics, Alex.

I don't think Alex is saying he doesn't want prices to fall to market-clearing levels. But he is saying that some policies could make the market-clearing price higher, and that would be a good thing.

To hell with that. If Alex Tabarrok thinks prices are too low, he can fork out more of his own money.

Here is what is going on: the rich are to be prevented from becoming poor. That is the prime directive of the banana-republic economy.

Embedded in Yglesias' statement is assumption of decreasing returns on high skilled workers. I don't know how reasonable that assumption is, given the high levels of specialization at high levels of skill.

Attach immigration policy to housing policy? Retarded. You may as well attach housing policy with credit and tax policy by offering a large subsidy to debt-financed homeownership. Or attach employment to health insurance policy by subsidizing health insurance coverage, but only when it is provided by your employer.

How is not having a work visa a deterrent against working? You buy the house, you're allowed in, you can probably get a drivers license at that point. Make up a fake Social Security number, have somebody make you a fake Social Security card, and you're good to go.

Ha ha. Or the guy who just bought the $500,000 house can get paid under the table to do yard work or something.

That is so 2006.

Why not just have them pay a huge fee/tax for the right to live in the USA.

Both have the same chance of actually being successful.

Look, foreigners are not complete idiots. They don't believe that Hollywood depictions of the United States are accurate. The people we want to come to the United States don't want to come here. They are just not that into us.

KLO,

"They are just not that into us."

You are henceforth proscribed for heresy

As an Australian, a lot of people here would like to live and work in the USA. The harsh reality is that wages are much lower in the US than they are in most other developed countries. It's hard to convince people to take a massive paycut, even if your dollar goes further in the US (which it does).

IMF has the US at 46,860 and Australia at 39,764. The population of the first six would make one of our smaller states.

That being said, I've known several people who would like to move to Australia. Seems to be leading us in freedoms lately.

Seriously, I think the fastest way for a European nation to solve its fiscal issues would be to establish a crediblly unamendable pro-wealth set of laws and sell citizenship. Unfortunately, the EU prohibits every member nation from doing that on the ground it somehow attracts the wrong people.

Why should we want to stimulate the housing market? Right now housing is as affordable as it has been for many years. That's a good thing. It helps young people get started in life.

Cheap(er) housing is a virtue. We should be celebrating it. Some sensible people do. See "The silver lining in the housing bust" by Robert Samuelson. Quote

"But housing's troubles may have a silver lining. If you're a homeowner, the steep fall in prices is calamitous. But if you're a future buyer, it's a godsend. What we're seeing is a massive wealth transfer from today's older homeowners to tomorrow's younger homeowners. From year-end 2006 to 2010, housing values fell $6.3 trillion, reports the Federal Reserve. Assuming there's no sharp rebound in prices -- a good bet -- that's $6.3 trillion the young won't pay."

Basically, MattY is trying (yet again) to use Open Borders to undermine the well being of the American people. Anyone surprised?

Why should we care about giving a boost to the housing market? Because youth unemployment ("young people get[ting] started in life") is high while the economy suffers continued lack of demand partly because of debt overhang in the housing market. How is a young person getting started in life supposed to buy a house when he can't even find a decent full-time job and has student loans and car loans to pay off before he can think about putting a down-payment on a house?

Oh, I know, let's eliminate down-payments and allow people without jobs to borrow at variable interest rates. What could go wrong?

No, let's just allow house prices to fall to market-clearing levels, which the market has been trying to do for the past three years. It would also help if young people didn't have to compete for rent with Section 8 recipients.

Shifting the demand curve doesn't prevent prices from clearing the market.

Not in the strict sense, but it creates tremendous and costly distortions as resources are sucked in to produce a supply to feed the artificial demand, not to mention the costs of propping up that demand.

Not that I'm telling you anything you didn't already know:

Oh, I know, let’s eliminate down-payments and allow people without jobs to borrow at variable interest rates. What could go wrong?

Can Matt Yglesias with a straight face honestly claim that the foreign born are under represented in engineering in the US? When Bush 43 became President, computer science enrollment collapsed. Did young people under Bush suddenly become stupid or were they simply responding to market reality? Screw the STEMs and young people will avoid majoring in the STEMs because of a long run high elasticity of supply.

Richard A.

Open Borders is closer to a cult than a religion

"When Bush 43 became President, computer science enrollment collapsed"

Because computer jobs took a nose dive under the last yeat of Clinton?

Please stop making me agree with Matt Yglesias, it makes my head hurt.

This is the capitalist visa - if you, a non-citizen, can spend at least $500,000 on real estate, odds are you have tens of millions in wealth because you are a rich capitalist. The incentive is to buy real estate to make money, presumably by renting and leasing the property, or by speculating. You will have no labor income in the US, but potentially millions in non-labor income.

If you believe free market capitalism is the solution, then the US economic problem is a lack of capitalists investing in new businesses, and as the hedge fund managers have been arguing, that does not require any labor.

oh there is another solution towards citizenship.it is called as joining-the-military. if you are fromt the 3rd world and can promise to join uncle sam in blowing up poor sods in other 3rd world countries,you can become a citiz-uhn

I prefer family reunion. Just get a green card marrying someone who got amnesty and then bring in all your siblings and parents.

Hey foreigners! Buy my house, and I will keep mum while I let you use my SS to get a job.

This will prop up the price of residential real estate, and that's a bad thing.

As others noted, this is basically a retirement visa, not a scheme to allow "immigrants" in the usual sense of the word.

Most countries already have a retirement visa scheme in place where people with a certain amount of wealth can live in the country full-time but are restricted from working. The U.S., for some reason, does not. Foreigners can own property in the U.S. but if they don't qualify for any other visa, they must enter the U.S. as tourists and that means they must not spend more than 6 months out of the year there. A retirement visa would eliminate the seemingly nonsensical six-month rule to allow Europeans to buy houses in California or Florida and spend as much time as they want there.

It's a good policy and has nothing to do with "class warfare." I agree that general overhaul of U.S. immigration policy is needed but that's a much larger project. This bill appears to modestly correct a flaw in America's immigration laws and hopefully also gives a boost to the housing market.

The real issue is that the recipient of the visa would be required to pay tax on their worldwide income as well as local property taxes. And yet they can't stay here all year, they can't work here, the can't get any benefits and they can't vote. Seems like many responsibilities with little or no accompanying rights. Rip-off anyone?

I'd really like to maintain my opinion of Sen. Schumer. So, is a half-measure better or worse than nothing? In this case specifically, we are bringing in a retiree to give the banks their cash and forbidding them from working. Seems sketchy.

it is cheaper to buy a house in beautiful switzerland than in parts of Mumbai.and that is what precisely rich indians are doing.who wants to buy a house in stuffy detroit

There's a similar process already available from our government. Invest $1,000,000 unsecured for 10 years and get a green card. This has lead to a unique business - bundlers. Agents that put together several of these million dollar investors to finance a commercial project. There is a new Marriott in Chicago, I believe, that was financed this way.

I don't have 500,000 $, so I will have to apply for the student visa.

Or get married.

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