The phrase “jobs Americans won’t do” all too often serves as a rationale for maintaining high levels of immigration. Get set for an equally dubious idea to justify mass immigration: “housing Americans can’t buy.” Senators Charles Schumer, D-N.Y., and Mike Lee, R-Utah, among others, are believers. And they’re offering a sweet deal.
This October, the two lawmakers unveiled the Visa Improvements to Stimulate International Tourism to the United States of America Act, or VISIT-USA Act (S.1746). A key element of the bill would provide renewable three-year resident visas to foreign nationals who invest at least $500,000 in residential real estate here. The plan, they argue, would turbo-charge our flagging housing industry and without incurring a subsidy. Supporters seem not to have pondered the downsides.
Since the virtual collapse of home mortgage lending during 2007-08, boosting homeownership has become a growth industry in its own right, especially in Washington. Among key steps, the Bush administration created a temporary first-time homebuyer tax credit, which Congress and the Obama administration promptly expanded the following year. And the Obama White House, only a couple months in office, created the Home Affordable Modification Program (HAMP), which enables distressed mortgage borrowers to renegotiate loans at favorable rates. And several weeks ago President Obama revealed the “We Can’t Wait” phase of his anti-foreclosure campaign. Building on HAMP, it would reduce monthly payments for homeowners who currently owe more than their properties are worth, a phenomenon known as being “underwater.” The program would allow distressed borrowers to refinance their mortgages at rates as low as 4 percent. Some 10 million households – about one in four with a mortgage – are in this situation.
The home purchase incentive of the VISIT-USA Act is another version of a demand-side bailout. The program would offer a three-year renewable visa for foreigners who invest $500,000 or more in residential real estate, at least $250,000 of which must go toward a primary residence. Dwellings purchased for nonresidential purposes could be rented out. The visa holder must agree to live in the primary residence for at least 180 days a year and pay U.S. income taxes on foreign earnings. All purchases would have to be in cash – no mortgage or home equity loan would be allowed.
Carl F. Horowitz is director of the Organized Labor Accountability Project of the National Legal and Policy Center, a Townhall.com Gold Partner organization dedicated to promoting ethics in American public life.
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