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Visas 4 Sale - Two years late
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$140b 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.
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So first you foreclose on peoples homes after giving them loans using criminal negligence. then you destroy their standard of living. And then you reinflate home prices out from underneath them whhile their credit is saddled with a short sale or foreclosure and are now paying more to rent than it would cost them to buy.
Great plan asshole.
Chucky Schumer completely demonstrates himself as a douchebag again and again.
Canada has had a form of that for a while now, since the late 90s I think. I don't know any non-Chinese Vancouverites working in any business owned by a Chinese person though...
This bill would be to keep bubble real estate areas inflated with the added divide-and-conqure benefit: nothing will stoke white-working class resentment into full-on national-front type thuggery like seeing a bunch of wealthy 'farners' in 'their city' living the life, along with their lazy street-racing kids while they work three jobs to afford a basement apartment.
"...with the added divide-and-conqure benefit:"
like the man said
Charles Ellis Schumer, Traitor to the Republic.
Did Chuckie read this twice?
I have no problems with encouraging business to come to America, but I already know two Indian families who did that and DON'T PAY TAXES.
Bullshit, this only works IF everyone is paying the same tax rate, otherwise corruption rules the day (again) and all American cities quickly become like the average city in India. That should be fun - NOT.
This sounds more like a move by the same mortage brokers, bankers, and Real estate fucks who profitted from the last crash to scam more people, and trap more people in the ponzi. Everyone does realize that once these foreigners invest in the property, they are locked into staying. Once again, the infinite growth model needs to be killed. There are numerous other problems here, fo example most cities in America do not even have enough fresh water to support businesses and people they have now, what the fuck? Stupid sheep.
Are money-laundering bank regulations exempted in the US if the real estate purchases are done through a shady lawyers? They are here in Canada.
I doubt America needs more entrepreneurs of the Fat Tony 'legitimate Italian businessmen' stripe.
American banks are some of the best places in the world for non-residents to launder large amounts of money.
The Chinese import businesses are frequently money laundering businesses that pay little or no taxes and use the $500K business visa tax exemption to get their entire families visas. One person gets established in the U.S. by pooling resources. That person buys stuff from the family that remains in PRC/ROC at inflated prices, "losing" money on the sale in the U.S. This gets the money back to China without taxation. After $500K of this, the next one comes. A similar thing happens in Canada.
It's very difficult for a U.S. state or federal tax auditor to audit this bunch. All (minimal) records are kept in Chinese.
Thanks for the information, good to know. Perhaps I need to look into property in Canada.
Look, the correct answer is: stop trying to manipulate the price of homes, or anything else for that matter. Just leave it alone. What is necessary, and healthy, is for home prices to decline to the point that our own capital is best used by buying them! It's that simple.
{Free, un-manipulated economy} = prosperity.
{Price controls, wage controls, central planning} = poverty.
Next you'll be saying that dog on cat action is not to be condoned! :>D
+1, Americans should own America. Selling America to rich foreigners isn't the answer.
This....
Many countries around the world grant citizenship to anyone who purchases a property exceeding a specified value. The U.S. is different. We grant free medical care, citizenship, welfare, schooling, scholarships and food to only poverty stricken basket cases who cross the border illegally. Are we cool or what?
You forget some of the other benefits we receive: drugs and diseases previously eradicated. Who says America's rulers don't want us dead?
And that's why the world loves us! Or hates us? I'm confused...oh look, GMA has Halloween recipes!
I disagree with this one. What ever Chucky supports is not in this nations best interest.
Chucky won't have to live among the new residents and will profit big time from all these new mortages as of course he is in this business and you know the bank and real estate fucks will quickly drive up prices and encourage more debt.
Stop fucking with markets chuck.
The honorable Senator is simply trying to help his constituents in Manhattan. His proposal has nothing to do with immigration issues, or the real estate market in Nevada, Arizona, or Florida, where the average home is relatively low priced. $500,000 buys you a 474 square foot studio condo in Manhattan.
Illegal immigrants already participate in the wonderful world of owning real estate. Actually, many of them were exploited during the real estate bubble, with the no-doc mortgages. All they needed was a tax i.d. number, and anyone can get that regardless of status (taxes are always welcome, regardless of source).
Bruce, you have good ideas, but sorry to say that you are a little niave. Maybe you could take a ride over to Port Chester or Mount Kisco and add a few illegal immigrants to your circle of friends. Here are some facts which you may find surprising. Some states, like CT, allow a person to register a car without a driver license. They are more than happy to collect fees and the personal property tax on the car. Need auto insurance? No problem. There are insurance companies in CT that will sell you a policy without a license, but you will pay triple the going rate. These insurance companies are more than happy that the state denies a driver license to immigrants. Need a checking account? No problem. Just go over to the local Bank of America. No SS or tax i.d. number required. None. Just present your valid foreign passport (if no visa, that's ok), and just sign here, here, and here, and welcome to the world of high banking fees.
Here's my plan for illegal immigrants that are already here to get a work visa: 1. Gotta get a tax i.d. and pay taxes. 2. Gotta learn english, including slang. 3. Must pass a test on the U.S. Constitution. 4. Must observe the Fourth of July. That's it.
You left out the part where immigrants have to pay up front:
- common laborers must pay $75,000 for the right to stay and work in the US (credit cards accepted).
- Educated workers must pay $350,000 for a license to stay and work in the US.
- 'Investors' (Ponzi promoters and swindlers) must pay $10,000,000 to stay and work in the US. All of the above would be subject to all income and other taxes in addition to the fees.
- No remittances would be allowed until the entry fees are paid in full.
If immigrants -- who come here to take jobs -- want these jobs, let them pay for them.
Also, immigrants would be permanently barred from owning or operating any power-driven machinery including automobiles, motorcycles, tractors, construction equipment, aircraft, ships, boats, lawn mowers, chain saws, etc.
(Not discriminatory, only fully-qualified and licensed US-born professionals would be allowed to operate any of these items only then after buying 'investment licenses' that would cost anywhere from $250k to $500k: see NYC taxicab medallions.)
Enough w/ immigrants coming to the US to take our jobs!
Why buy the cow when you can get the milk for free?
Oh, I see....we're talking about immigrants that arrive by boat or plane, not those who come by foot or truck right? So, the deal for them is: plonk down =>$250k and you can have all the rights and privilages of a no-money-down, illegal immigrant from south of the border?
It's actually a good, universal policy idea Bruce, I believe Australia & NZ used/still do things like this...and extra points for trying to help the government understand that incentives actually matter.
But my point is that one of it's net effects will be that it will further cement a two tiered immigartion policy based essentially on ethnicity and ultimately two tiers of citizens or a system of citizens and helots.
Is this elitism? You bet.
Is this a "beggar my neighbor" policy? Yup.
Is this really any different than China keeping their currency at artificial levels? No, it's the same thing.
Does the US Visa mean much? To some it means a great deal. There are many troubled parts of the world.
OH I see Bruce...'If its good enough for China, then its sure good enough for America!'
I don't take issue with that part at all Bruce. Even though I'd personally fight tooth and nail (legally or no) to get over the border if I were in similar straits as many of these folks are the fact is a nation such as the US, especially a welfare state, has to be selective about immigration if it want's to prosper or even survive long term. It's simple math.
Like I said, it's a good idea, it's the right kind of policy - I just think implementing it for one class of immigrants while continuing to have something close to open borders for another class of immigrants would make an existing two-faced system even worse.
That said, I understand that this is a RE market proposal not a proposal for sweeping immigration reform and my gripes are beyond the intended scope of your post.
Do they want to let only a 250k home qualify someone, or do they want to raise the price by adding a fourth requirement?
So in other words, this entire "let's fuck with the markets some more through more irresponsible policy" is in fact fucking stupid.
No shit there are troubled parts of the world douchebag, I have two employees from these parts of the world. One from China, one from Korea, and my mechanic is from Romania. All three came here, learned English and worked very hard. They all own property now as well and pay taxes liek everyone else. Thanks for confirming that you were in fact trolling this morning Bruce.
Your two employees are atypical immigrants (especially the learn English and assimilate part) at this particular point in history. Bruce's plan is an attempt to attract more of them because immigrants that become wagon pullers are better for the economy than immigrants who remain (net) wagon riders. Plus it would bring in outside capital - also good.
The USA (and all the bells and whistles that go with it) is the product in supply. All the people that would rather be here instead of where they are is the demand. Offering that finite product for a price is not "fuck[ing] with the markets"
"Offering that finite product for a price is not "fuck[ing] with the markets" "
It is if there are any official policies attached to it. Yeah, these policies never lead to more corruption or bubbles, what fucking planet are you on? In addition, you are still ignoring the structural problems that exist.
Hypothetical question: Why would someone living in Mexico say, plunk down around $500K on a McMansion in the US, when that same $500K would probably buy a huge ranch and Hacienda in Mexico??
That's ridiculous. When more people want to come to this country than existing systems and quality of life can possibly support (otherwise known as simple math) you have to have some kind of policy that determines who gets the green light and who doesn't.
How can that policy be anything other than official policy?
Yet again, you FAIL to address the existing structural problems and the additional resource and energy demand issues. We ALREADY have policies that dictate WHO gets a green numbnuts, and I already have two productive employees to PROVE it. This is pure "money for citezenship" bullshit. Keep eating those unicorn skittles fucknut. Again, we ALREADY have policies in place, enforce the fucking laws already. anytime a "money for anything" policy is implemented all you do is inflate prices to the benefit of a few more kleptocrats in those areas. Basically a this is no different than "Cash for klunkers". Money for anything as a policy just leads to more corruption.
...enforce the fucking laws already.
Well, we can agree on that at least
If you want to outright sell citizenships, then do that, but as soon as you tie it to housing, you inflate an asset, interfere in markets, and lead us down the road to central planning serfdom.
That's probably right. Although I think it's a good thing to be selective about all immigration it would be better to tie the qualifications for a visa to things like education level, net worth, skill set etc. instead of requireing an investment in a specific asset class (real estate).
At least some of those homes-for-visas purchases would be flipped right away at a loss making the requirement simply a visa tax and doing nothing for the RE market overall. Last time I checked out New Zealand emigration policies they had things like this in place.
Fancy island states like Bermuda have almost the opposite policy from what Bruce is proposing - they require hefty up-front taxes on foreigners to own real estate which prevents natives from being priced out of their own country - the requirement is intended to put downward pressure on RE prices.
Cant believe you agree with Chucky Sticky Cheese on this one.
Are you fucking stupid? Read my posts fucknut, I don't agree with chuck.