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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one difficulty i can see with this is that a probable source of immigrants with enough funding to purchase a home and plenty of interest in living in southwestern border states and Florida would be folks working in the drug trade. it may well end up being a convenient way to turn mules into US nationals while establishing a propertied network.
ReplyDeletethat's obviously not to say that there aren't plenty of well-funded folks from other countries who would do this on the up-and-up; rather, it would take a diligence and capacity in filtering candidates that few agencies in the drugs war have thusfar shown.
Why would any sensible 'alien' do this anyway?
ReplyDeleteIt's not only the visa and immigration requirements that make the U.S. an increasingly unattractive place in which to live work, or invest...what about trust in government, predictability, taxes, regulation, public safety, income disparity?
Not to mention the fact that real estate (God forbid OPENING A BUSINESS!) is still objectively overvalued...
So not only do you want to bail out people who overpaid for real estate during the bubble, and force people who do not own homes to pay excessive prices if they want to buy, you also want them to have to compete for jobs with the immigrants you've brought in.
ReplyDeleteAs the first commentator above noted, this would bring in many people of a sort we'd be better off without -- not just drug money launderers, but also corrupt businesspeople wanting to flee their home countries with ill-gotten gains from other sources. And they wouldn't even have to be using their own saved money -- they could borrow the money in their native country's underground lending system -- after all, the loan would be backed by the house, and after getting their US visa they could then sell the house on to the next potential immigrant down the line. A Chinese gang could have a field day with this idea.
The problem with American housing is that its overpriced driven up by excess credit creation and builders have over built large poorly constructed housing tracts of single family housing far from employment centers. Neither of these issues would your proposal resolve nor would a bucket of likely buyers for these properties appear in the future as U.S. family incomes continue to decline.
ReplyDeleteFix the employment issue and housing will heal naturally.
One reason for the sudden interest in wealthy foreign buyers is that Prime mortgages/Jumbo's are starting to show significant stress, here is a sample of recent NOD's from two very wealthy area's near San Francisco that are suppose to be immune to distress. These large jumbo mortgages litter Calif from San Diego to the Oregon border, more then enough to bring down the banking system.
ReplyDelete2 Details Active 09-28-11 Preforeclosure Ralston Rd Atherton CA 94027 4 / 4 $1,898,400 SF
3 Details Active 09-15-11 Preforeclosure Ravenswoo... Atherton CA 94027 1 / 1 $2,152,900 SF
4 Details Active 08-31-11 Preforeclosure Santiago Ave Atherton CA 94027 5 / 4.5 $2,667,600 SF
5 Details Active 07-06-11 Preforeclosure Cebalo Ln Atherton CA 94027 4 / 3.5 $1,407,100 SF
6 Details Active 06-22-11 Preforeclosure Selby Ln Atherton CA 94027 3 / 3 $1,239,000 SF
7 Details Active 12-05-10 Preforeclosure El Camino... Atherton CA 94027 UN
8 Details Inactive 10-02-11 Preforeclosure Walnut Ave Atherton CA 94027 5 / 3.5 $1,773,200 UN
9 Details Inactive 09-21-11 Preforeclosure Walnut Ave Atherton CA 94027 5 / 3.5 $1,773,200 SF
10 Details Inactive 08-28-11 Preforeclosure Greenoaks Dr Atherton CA 94027 4 / 3 SF
11 Details Inactive 08-28-11 Preforeclosure Walnut Ave Atherton CA 94027 3 / 2 $1,344,200 SF
12 Details Inactive 08-03-11 Preforeclosure Maple Ave Atherton CA 94027 2 / 1 UN
13 Details Inactive 07-19-11 Preforeclosure Oak Grove... Atherton CA 94027 4 / 4 $4,353,400 SF
14 Details Inactive 06-15-11 Preforeclosure El Camino... Atherton CA 94027 $833,000 SF
2 Details Active 10-06-11 Preforeclosure El Nido Rd Portola... CA 94028 $876,000 UN
3 Details Active 08-31-11 Preforeclosure Crescent Ave Portola... CA 94028 3 / 2 $1,247,100 SF
4 Details Active 08-28-11 Preforeclosure Golden Oa... Portola... CA 94028 5 / 5 SF
5 Details Active 07-30-11 Preforeclosure Canyon Dr Portola... CA 94028 3 / 3 $1,269,600 SF
6 Details Active 07-06-11 Preforeclosure Golden Oa... Portola... CA 94028 6 / 5.5 $4,675,200 SF
7 Details Active 06-15-11 Bankruptcy Carmel Way Portola... CA 94028 2 / 1 $959,000 SF
8 Details Active 07-26-11 Deal Lucero Way Portola... CA 94028 3 / 2 $130,000 $1,486,700 UN
9 Details Inactive 09-27-11 Preforeclosure Pecora Way Portola... CA 94028 3 / 2 $1,358,200 SF
10 Details Inactive 06-22-11 Preforeclosure La Mesa Dr Portola... CA 94028 6 / 4 $1,962,200 SF
I proposed the same:
ReplyDeletehttp://alephblog.com/2008/03/01/how-to-solve-the-housing-crisis/
I'm wondering when Congress will address my proposal that ALL Americans get the Cadillac health care plan Congress has voted for itself.
ReplyDeleteIt'll never happen until the Legislature can figure out how to collect the graft on this. No money in it for them.
ReplyDeleteYou want the legislature to vote something up, you've got to figure out how they can put some coin in their pockets at the same time.
They have used this idea here in Canada quite successfully over several years. It has some drawbacks, but frankly it is merely a more modern day version of the mass immigration policies utilized to settle the vast expanses of the country in the first place.
ReplyDeleteFuck Schumer, one of the biggest assholes in a sea of assholes
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ReplyDeleteAmerica is the land of milk and honey prophesied in the Bible. It is the opportunity for souls not business to thrive. Jesus said it is difficult for the rich man to enter the kingdom of God, which means that the type of people you want is not necessarily what you want. The cost is not a penny. The cost is the dilution of values already eroding as to what America represents, the land for souls to evolve. So with lax borders in such policies, you see the slave trade comes in, as America is a ready market for such types of sharks with the type of consumerism mostly in America not so much in other countries. Then you have the sweat shops. These are facts. I’m not making them up. It is imperative to protect our nation from value erosion. Whether you believe in unions or not is not the issue. But when you consider it is the fabric of peace woven in America, and with such policies as you say, can rip apart the values created through suffrage, it is not without a cost and a heavy price. Even when you go into the supermarket or the hamburger joint, you see the immigrants, legal or illegal, who serve you and they carry many of the un-equalitarian values. Many of our values are taught in a round about way, like the Ten Commandments or the beatitudes of Jesus, the good news message of Christ from Paul the Apostle, but they are nevertheless taught. You can see this is absent in those who are not Americans.
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