America is having a fire sale. Why not sell wealthy foreigners the right to live here, too?
That's the notion behind a bill introduced last week by Republican Senator Mike Lee of Utah and Democrat Senator Charles Schumer of New York: Stoke demand for American homes by allowing foreign nationals to buy them. In return, give foreigners the right to live here (although not work here).
The price? At least $500,000 cash. It could be one piece of real estate costing $500,000 or more, or several, of one would have to be worth at least $250,000.
Presumably, this would help homeowners by boosting demand. "This is a way to create more demand without costing the federal government a nickel," Schumer told the Wall Street Journal.
And it would help the street. Rather than have the big banks carry all those non-performing mortgage loans on their books or be forced to write them down, we'll just goose the housing market by selling off the right to live in America.
And the measure wouldn't allow in the world's riff-raff, because buyers would have to be rich enough to pay cash, and live here six months a year without working.
Realtors love it. Says Glenn Kelman, CEO of Redfin, an online brokerage firm, "when property values sag and this is a desirable place to live, one of the simplest solutions is just to let more people in so they can buy the homes."
In Seattle, where Kelman lives, housing prices have slumped -- as they have all over America. But Vancouver, Canada -- just 140 miles to the north -- is enjoying a housing boom because Canada allows foreigners to buy their way into Canada, just as the Lee-Schumer bill would do here.
But wait a minute.
Rich foreigner buyers may be a boon to American homeowners looking to sell, because those homeowners can't find Americans willing and able to fork over as much money as the sellers would like.
But what about American home buyers -- many of them young, just entering the market -- who would prefer low home prices that aren't bid upward by rich foreigners? It's not altogether obvious why we should favor American homeowners over American home buyers.
The visa-for-home swap proposal also comes at exactly the same time the nation is actively closing its doors to foreigners who aren't wealthy. Is this what America is all about?
Policy makers have tightened eligibility for entering the country legally. Student visas are harder to obtain. Family members are waiting years to become resident aliens. Green cards are in short supply.
Meanwhile, many states are doing whatever they can to make immigrants -- mostly poor, but legal as well as illegal -- feel unwelcome. For example, Alabama and Arizona allow police to demand "papers, please" from anyone they suspect may be undocumented (read: anyone who looks Hispanic). Alabama requires public schools to demand documentation from parents of all children in K-12 programs.
The nation is expelling record numbers of undocumented workers. Over the last year (from October 1, 2010 to October 31, 2011), almost 400,000 people were deported - the largest number in the history of the Federal Immigration and Customs Enforcement Agency. Annual deportations have increased 400 percent since 1996.
Some of these people committed criminal acts in the United States but a significant number simply overstayed their visas. Others had been in America for decades, working and raising their families here. Some had even been here legally but had no opportunity to defend themselves. A recent report by my colleagues at the Berkeley Law School notes that many immigrants "are pushed rapidly through the system without appropriate checks or opportunities to challenge their detention and/or deportation."
If the Schumer-Lee bill becomes law, the easiest way for a foreigner to live in America will be to plunk down $500,000 for a piece of property.
Maybe we should rewrite Emma Lazarus's words on the Statue of Liberty:
Give us your richest, fattest cats,
Your highest net-worth, seeking pleasure domes,
Your wealthy heirs and pampered brats.
Send these, with a half-million to buy our homes,
And gild our fading door mats.
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Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at RobertReich.org.
Follow Robert Reich on Twitter: www.twitter.com/RBReich
We actually have a many tiered policy where a professional would have preference over say a person without. No country can be perfect, but we do our best.
We really need to think through such a scheme carefully, especially given the law of unintended consequences.
Your highest net-worth, seeking pleasure domes,
Your wealthy heirs and pampered brats.
Send these, with a half-million to buy our homes,
And gild our fading door mats.
If we could figure out someway to legally export Our poor, They would be out of here in a flash.
There are plenty of middle class unemployed to do the crap work for the Rich.
Ain't America Great???
This bill will never make it into law and I'm disappointed in Shumer. Obama would veto it.
On the other hand, it is the minority leader who symbolizes the whole GOP and has done more to harm this country, than anything I have ever seen.
http://www.salon.com/2011/10/26/president_obama_picks_a_worthy_enemy/?source=newsletter
http://www.washingtonmonthly.com/political-animal/2011_10/if_the_villains_shoe_fits033041.php
In August 2011, McConnell admitted that he and his Republican colleagues were willing to hold the nation and its economy “hostage,” threatening to destroy the United States’ full faith and credit on purpose.
These dummies do not realize how close this country is to violence. They do not know how deep the anger is. If they succeed in 2012, they are going to see anger and violence. I'm really worried that the GOP will touch off a spark that will spread, and all for "NOT CARING" when they could have helped with the mess they made. Blaming Obama is not going to work.
Alas, Emma Lazarus poem is just that, a poem, not the law of our land, or our immigration policies.
But while your sentiments, as always, are in the right place, Mr. Reich, your economics may, uncharacteristically, be a bit myopic. Rich foreigners may also spend and consume stimulating the economy. They will not buy up all the homes, may build new ones, and would probably not distort the prices of affordable starter homes for the young.
Most ironically, however, for a good economist, you miss the opportunity the Lee-Schumer bill inadvertently affords to argue for raising taxes on wealthy people who are Americans now: There is a demonstrable value to the wealthy to be domiciled in the United States. As that value is ongoing, it should not be sold on a one-time basis, but as an ongoing fee. The wealthy should pay a tax equal to the value of being in the US. Then, wealthy foreigners will only increase our tax revenues.
And of course, they will need more less-wealthy immigrants to work for them.
But I agree it is an admission of the true VALUE this country offers (PROVIDES for) the uber wealthy (1%ers) is a inadvertant admission that the wealthy should pay more in taxes because they do indeed get so much more. Why else pay mega bucks for the PRIVILEGE?
THANK ALOT BARNEY FRANKS.
They R the ones who inflated and drove housing costs sky high and bought long motor homes and "spent their children's inheritance!"
Now their nice Canadian descendants are going to pay, pay, P A Y!
This is crap, we should do more to encourage first time American buyers, keep deporting illegals, and tell the rich foreigners to shove off. Go to effin Canada, who cares. The brokers are just upset because their Canadian counter part is getting the rich Brazilians money. Or the Chinese. That's who will be buying these homes.
With any luck they will buy homes to rent for cheap, but they can't become slumlords, because the home has to be 500,000 or more. That's a friggin palace nowadays.
And to the end part:
I think we should take Lazarus' words on the side of the statue of "liberty" and etch them right off. The we should wrap chains around liberty and drag her to the scrap yard and recycle her ass. Because she is a lie.
These two Senators are overstaying their welcome and should be voted out.
Schumer shame on you.