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. (see complete Wall Street Journal Article)
I am sure this bill is going to garner some criticism in some corners. It certainly appears on the surface to be selling US visas in exchange for foreigners’ help in bailing out the real estate market. But, maybe these visa change proposals ALWAYS should have been in place. Real estate is a “hands-on” investment, unlike other passive investments. The money invested in real estate is also “sticky,” meaning investors are more likely than not to have a time frame exit strategy of longer than one year….5 to 7 years realistically at a minimum. The investors will improve the properties, buy furniture and use local services. All of this is good for the local economy and the financial commitment closely matches programs already in place, such as the EB5 visa.
The Florida and National Associations of Realtors reports that approximately25% of all real estate sales in Florida were to foreignors for the 12 months ending June 2011. Most of these investors are from Canada, the UK and Germany. I am not sure how much this bill will effect sales to nationals from these countries as it is not currently necessary for citizens of these countries to obtain a visa before coming to the US. But, it is logical to assume passing of the bill will have positive influence on sales of real estate to Brazilian, Indian and Chinese nationals to name a few, that now have stricter requirements for entry in to the US. With a minimum of $500,000, the bill will largely attract investors that are capable of immediately contributing to the economy, perhaps start businesses here and employee US workers. There is an enormous amount of wealth being created in the emerging economies . The US has historically made it difficult on these countries’ citizens to obtain visas. To ignore their growing financial influence is not beneficial to US or Florida’s interests.
Recently, we have seen a number of duplex and quadruplex homes in and around the beach areas in Pinellas County that would be ideal for this type of investor (to live in one unit and rent the remainder). While our firm does not focus on residential property,we have assisted some of our clients acquiring second/vacation homes near the beaches. I do not anticipate the bill having a direct effect on the commercial side, but there would undoubtedly be some secondary benefit. I believe it is a good bill and hope that it is passed.
