The recession following the financial crisis in the U.S. negatively impacted the global financial industry. A sluggish recovery has the housing market limping along and the government thinking of creative ways to help stimulate the economy. A new proposal called “buy a home, get a visa” has economists and some politicians skeptical that mixing immigration with housing will help the economy recover faster.
Spain, Ireland and Portugal have each embraced the idea and now offer lawful residency to those who purchase property worth a certain financial amount. Because the programs are so new, there is no evidence for or against this idea.
In the U.S., Senators Chuck Schumer and Mike Lee are proposing that visas be granted to foreign investors who purchase a residential property valued at $500,000. Opponents are calling this program “citizenship for sale” and worry that citizenship will be limited to only those who have the resources to afford such large investments.
There are various problems with this policy. First, who would this specific program target? The right to work is not included in the provision therefore eliminating working professionals from the parties buying homes and contributing to the U.S. economy. The $500,000 minimum buy is nearly twice the median value of foreign-bought homes ($252,000), and one-third of foreign buyers used some sort of mortgage to purchase their homes, making the offer even more exclusive. This program seems to target a very small group of foreign investors with access to many financial resources that most immigrants do not have.
Critics worry that there is a dangerous line between immigration problems and the crippled housing market that is being crossed. Politicians believe that both can be fixed by offering a visa for one less foreclosed property, but the repercussions of buyers who are only seeking to take advantage of the system will be much worse. If investors skip their required six month residency period and instead buy several properties due to a favorable market, this proposal is not truly helping the U.S. economy in the long run. While initially statistics may show that the housing market is recovering, this is misleading because the domestic market is still weak. Finally, statistics show that “over 60 percent of foreigners who bought homes did so in just seven states: Florida, Arizona, California, Texas, New York, Nevada, and Georgia.” This is leaving the rest of the states to fend for themselves since the investment is so exclusive to these locations.
There is no doubt that the housing market has taken a huge hit when the bubble burst creating the worst recession since the Great Depression. While the economy is currently said to be in a recovery stage, the government is looking for ways to stimulate it even faster. Whether mixing immigration laws with housing is the best method to take on will be determined in the future when the specifics of this plan are released. If you have questions regarding how such a change to the immigration laws may help you, contact us at 314-961-8200 or visit our contact page.