Hugo Chavez retaining power in Venezuela could be just what the doctor ordered for the recovery of the American housing market. Despite his absence due to health issues, his presence still looms large. In fact, so complete is his control that only he can officially declare himself "absent" from the country, which he hasn't, and therefore his policies still grip the nation.
In recent years under the Chavez administration, Venezuela has suffered from rampant violent crime -- saddling the country with South America's highest murder rate, official corruption which serves as a constant reminder of the "sleaze" that Chavez once condemned during his rise to power, and blatant economic mismanagement producing one of the world's highest inflation rates.
As a result, Venezuelan businesspersons have had to search beyond their afflicted regions, and look into international markets to invest their money. Fortunately, the proximity and viable infrastructure of South Florida's housing market has served as an ideal refuge for their capital, with millions in unclaimed properties ripe for purchase with a plurality of foreign buyers concentrating in the Coral Gables and Key Biscayne areas. The "Chavez Effect" has since transformed the property rich (and often exorbitantly high priced) downtown areas of Florida into a safe haven for these investors from the economic and political strife that plague their country.
Floridian property owners have since piled on the bandwagon of selling to wealthy South American entrepreneurs with nowhere to safely invest their money locally, in place of local clientele -- many of whom are unable to afford their previously owned properties in light of America's languishing economy. Notably, before the housing market's crash, Miami condo real-estate developers and property buyers relied heavily on bank financing. Recently however, with our economy showing its first signs of life in years, in contrast with six more years of a notoriously stagnant Chavez regime sending cash-rich clients to our shores, we can expect great increases in foreign investments in the United States by Venezuelan buyers, anxious to protect and cultivate their assets.
The Immigration Connection
From an immigration standpoint, this means a sizable increase in the number of EB-5 visas issued to account for this spike in foreign revenue. For foreign investors, the EB-5 visa serves as an attractive mechanism to stimulate American economic growth, because it does not -- like most conventional visas -- require sponsorship from a relative, or, a potential employer. Rather, this program provides law-abiding foreign investors with an opportunity for them and their families to expeditiously become permanent residents if they invest at least $500,000 of legitimately earned capital in rural or high unemployment areas, each of which in turn creates at least 10 new jobs.
Venezuelans have since taken the bait and sought refuge for their resources in the closest geographic United States territories to them with the most potential for vast economic growth. Since his election in 1998, Chavez has effectively turned the heads of his wealthy business classes north, to the benefit of American property owners, now thriving with a robust client base. Currently, it is estimated that more than 100,000 Venezuelans are living in South Florida. Likewise, the total number of Venezuelans who have received permanent residence has been growing annually -- from about 5,000 in 2002, doubling to nearly 10,000 in 2012, according to the Department of Homeland Security's office of immigration statistics. While it is not public information as to who is here on an EB-5 visa or in what precisely they have invested, industry folks -- attorneys and real estate agents -- have been reporting a rising number of inquiries from South Americans, in particular Venezuelans.
Moreover, with Chavez's recent legislation effectively making it more difficult for property owners to evict problematic tenants, Venezuelans will likely continue to be reluctant to take any interest in one of the few property investment options still available in their country. By that same token, American property owners will continue to quietly back another six years of Socialism abroad, which has ironically proven to be one of the most effective catalysts for a Capitalist market boom.