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Buy a house, win a visa
U.S. visa.
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Kai Ryssdal: Given the state of the American housing market, sellers are offering all kinds of incentives for buyers: granite countertops; a finished basement. And now, a visa to live here.
There's a bill being introduced in the Senate that would give residence visas to foreigners who buy homes in the U.S. How much might that do to actually shore up the housing market? Marketplace's Nancy Marshall Genzer takes a look.
Nancy Marshall Genzer: Here's how it would work: Foreigners plunk down at least $500,000 on a house in the U.S., and get a visa. The visa wouldn't allow them to work here -- they'd have to have a work permit for that. But they could live here, as long as they own the house.
Ruth Sells thinks this is a great idea. She's a realtor in the Phoenix area.
Ruth Sells: It would just put you back out on the streets every day trying to find these people homes.
Sells says she already has a fair number of Canadian clients. According to Zillow.com, foreigners spent more than $80 billion on U.S. homes for the year ending in March, a 24 percent increase from the year before.
Stan Humphries is Zillow's chief economist. He says trading visas for verandas makes sense in this housing market.
Stan Humphries: There is no silver bullet out there. And really, the path forward is a lot of small steps like this that we're going to take.
Not everybody's convinced. Anthony Sanders teaches real estate finance at George Mason University. He says it's clear that foreigners are already flocking to the U.S. to buy homes, so they don't need incentives. Plus, he worries that if we get too much foreign investment:
Anthony Sanders: Whoops! Then we start getting bubbles. This smacks me as having a very large probability of unintended consequences hitting.
Zillow economist Humphries says you get around that by making the visa program temporary, so it's over before prices can spike.
There's still time to tinker with the visa legislation. It hasn't hit the floor of either house of Congress yet.
In Washington, I'm Nancy Marshall Genzer for Marketplace.
Well won't that be dandy. We can create demand for housing over $500k and drive up prices. I believe that the bulk of the crisis is primarily in the under $500k housing stock. This plan sounds very Republican. Relief for the rich and more pain for the middle class.
This is a bad short term solution. In the long term, it will only make it more difficult for Americans to buy American homes by artificially inflating home prices with the artificial demand from foreign buyers. Really? This is the best we can do? Sell the country to foreigners? How about focusing on building a strong economy for the long term. Then Americans can afford American homes. This is just another example of big business lobbyists (National Association of Realtors in this case) selling out the people for a quick buck.
The effort to find ways in which to rescue the housing market should be applauded. However, too many of our assets have already been transferred. The transfer of housing would only serve to create another bubble with far reaching public, private, and social administrative nightmares. We would be better served if housing investment vehicles were created, i.e., cooperatives of leased properties, which would give Americans a safer and tax free place to invest American 401k funds.
