How bad is the housing market in the United States? So bad, that two senators -- a Republican and a Democrat -- have joined forces to push a bill that would offer visas to foreigners who spend $500,000 buying homes in the States.
The bill was co-authored by Sen. Charles Schumer (D-N.Y.) and Sen. Mike Lee (R- Utah) and includes several other immigration measures to attract more foreign capital into the United States, the Wall Street Journal reports.
The concept of giving out visas in exchange for foreign cash investments isn't anything new, but none of the programs currently available target homebuying. One existing program allows foreigners to get U.S. residence visas if they invest a certain amount in a job-creating ventures in the United States. The required minimum investment varies from $500,000 to $1 million, depending on the area. Commercial and residential developers have been all over these programs to fund construction of projects since lenders tightened their belts after the real estate crash.
But many foreigners, who are eager to invest in the States, hesitate to put their money in a project or a business venture that may or may not work. If these foreign investors had the opportunity to buy homes instead, certain U.S. markets would be flooded with buyers. Under this bill, the foreign investors would be allowed to buy vacation homes and investment properties. But they would not be allowed to work without getting a standard work visa. The investors would be required to spend at least half of the $500,000 in a home where they would reside for a minimum of six months.
Foreigners spent $82 billion buying homes in the United States in the 12 months ending in March, according to the National Association of Realtors. That's $16 billion more than in the previous year. The weak dollar and low real estate prices have been the main drivers behind the increase in sales. If you were to throw in a visa on top of those, it would certainly entice many other foreign investors.
There's no question this would help spur home sales, but the concept of having a huge wave of foreign landlords in the United States concerns me a little.
What do you think? Should the States offer visas to foreign homebuyers?
Follow me on Twitter @Polyanad.