WTF is Congress doing?

[ProSense]

Robert Reich

Why We Shouldn’t be Selling the Right to Live in America

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.

<...>

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.

more

While the President had to bypass Congress to help American home owners, Congress is busy devising a scheme to sell homes to people who can't work in this country.

:wtf:

[ClassWarrior]

1. That's why I'm going to focus my campaign time on Senate and House races this time around.

NGU.

[boxman15]

2. Congress is truly fucked up.

We need to focus our time and energy in making sure we get true liberals and progressives in there, and kick the Teapublicans and ConservaDems out.

[DocMac]

3. Just what the Russian mobsters and

drug cartel leaders needed. Congress understands nothing but money.

[Scuba]

4. Look at Greece. That's the oligarch's model for us. Bankrupty sale. Endgame. n/t

[JNinWB]

5. I think that there have been similar programs for many years...

...especially in Canada. In order to attract wealthy foreigners (and encourage them to bring cash and hire citizens) citizenship is offered. China has attracted many Chinese entrepreneurs with this program over the years.

This was for starting a business and hiring workers. IIRC.

[Enrique]

6. careful expressing too strong an opinion

what if Obama signs on?

[ProSense]

7. Here's an idea

"careful expressing too strong an opinion what if Obama signs on?"

...worry the fuck about your own opinion. What is is BTW?

[Enrique]

10. I'm skeptical but not outraged

I don't trust Schumer or any Republican, and Reich makes good points, but the downsides he describes are a little vague. If Obama signs on, I won't be outraged either. What about you? Will you still be saying wtf?

By the way, Matt Yglesias likes the idea, with some reservations:

http://thinkprogress.org/yglesias/2011/10/20/348733/more-people-more-housing-activity/

Under the circumstances, the Chuck Schumer/Mike Lee bill to offer a visa to any immigrant willing to buy an American house worth at least $500,000 makes a lot of sense...

(...)

[ProSense]

11. So

"If Obama signs on, I won't be outraged either. What about you?"

...this is fine with you, huh? It's a stupid idea. Even more stupid than the implication above.

Yglesias:

<...>

The larger issue, however, is that the Schumer/Lee proposal would deny the new immigrants the right to work in the United States. As with other restrictions on high-skill immigration, this is essentially a form of class warfare against less educated Americans. We should be clamoring to increase the supply of foreign-born doctors, lawyers, engineers, and other highly educated occupations as a way of increasing the real wages of America’s factory workers, janitors, waitresses, carpenters, and retail clerks.

This idea is preposterous. If they can't work in the U.S., what's the plan: buy a home and work in another country? Or is this selling America off to the richest foreigners?

[Enrique]

12. your outrage is righteous

as long as it's directed against a safe target like "Congress".

[ProSense]

15. Hmmm?

"your outrage is righteous as long as it's directed against a safe target like 'Congress'."

Yeah, I should be smart and direct my outrage at Obama, smarter still, direct it at his supporters.

Righteous!

[Raine1967]

16. Once the VISA expires...

do they become landlords?

Or do the Houses go BACK into foreclosure? This legislation does not make sense to me at all. I read the ThinkProgress link, and I read this from the Albany Times Union (Schumer's State)


-------------
The Democratic New York senator describes his bill, which is co-sponsored by Sen. Mike Lee, a Republican from Utah, as a way to help the sluggish housing market by boosting demand. Foreign nationals would have to spend at least $500,000 on residential real estate, including at least $250,000 for a primary residence.
"Our housing market will never begin a true recovery as long as our housing stock so greatly exceeds demand," Schumer said, adding that the effort "won't cost the government a nickel."
But critics say the plan would have negative consequences for some U.S. families, particularly first-time home buyers. After all, the housing downturn has been a blessing for many Americans who had been priced out of home ownership.

http://www.timesunion.com/business/article/Schumer-Buy-a-U-S-home-and-get-a-visa-too-2235281.php#ixzz1bocKrAaI

Banks need to start lending to people again. I don't care if a house that once sold for 500K is now worth 150K -- We should be offering opportunities to Americans. It sorta seems like this is giving Banks an opportunity to recoup the money they lost during the housing bust.

I am not really smart about these issues, but I have a bad feeling about this bill. The housing downturn SHOULD be a boom for people who could not otherwise afford to buy a house. (isn't that the very esscence of the rights beloved "free market" ?)

[slay]

9. ROFL

too funny. :rofl:

[Cali_Democrat]

13. LOL

:)

[slay]

8. I wonder that myself everyday

and have come to the conclusion that they have betrayed us in favor of the rich and huge corporations. both (D)'s and (R)'s.

[former9thward]

14. "young, just entering the market" homebuyers would not be hurt by this.

People buying $500,000 plus homes are not affecting starter homes. Reich obviously knows little about real estate.

[Raine1967]

17. I'm not so sure.

I think part of the idea is to jump start the market -- that would mean prices going up even for starter homes.

People buying 500K homes aren't going to buy them in the places in the nation that are the most seriously depressed. Those are the ones that need the most help.

[Enrique]

20. i could see it helping Florida

especially since these are people that won't be looking for a job.

[JNinWB]

22. California, which could benefit from this program,

...has one of the highest unemployment rates in the country.

New home purchases generally require realtors, mortgages, re-modeling, re-decorating, landscaping, auto purchases, private schooling, home services (gardeners, nannies, house keepers) etc. Plus paying the property taxes and home maintenance,

Putting a lot of Americans to work.

[Raine1967]

23. At the risk of sounding like a Nationalist

and I am quite concerned with my feelings on this. My opinion is still subject to change... I am really trying to understand the reasoning behind this bill.

With that caveat I ask this:

Can't we find a way to help AMERICANS stay in there homes, and encourage people to buy homes? Why are we reaching out to other countries to buy homes when we have so many going without here in this country? I can understand the economic stimulus that you speak of, but to offer a 3 year VISA for people to buy American homes seems rather short sighted.

They are going to have to leave after 3 years -- While they are here, they aren't going to be given work visas.

[former9thward]

27. No that is not true.

Hard hit areas include California, Arizona and Florida. All these locations are prime for foreign retirees or investors.

[handmade34]

37. yes

this bill will not help you and I, it will help the wealthy investor who wants to unload real estate... I don't like it

[ProSense]

19. First of all

"People buying $500,000 plus homes are not affecting starter homes. Reich obviously knows little about real estate."

It depends on the market. In some places first-time home buyers are in the pool for homes at that price.

Secondly, from the the OP:

"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."

[Raine1967]

25. That is a critical point.

Is this legislation going to help places like Detroit? I think many people here on DU have a familiarity to that housing market.

Places like NoVa, don't really need the help. It's perceived as a desirable area. The market is pretty solid. Same with the suburbs of NYC and many other city suburbs.

At best I see markets in the middle of the housing bubble being helped. Not the communities that need it the very most.

[JNinWB]

18. During the property boom, builders in my area (SoCal) overbuilt huge million $$ plus McMansions.

These were originally sold to buyers who could only afford to live in them with the creative, interest-only loans available at the time. These are 5-6 bedroom/5 bath homes best suited for large families. I have heard that many of these homes have been purchased (for cash) by wealthy Asian buyers for their extended families.

I believe that these types of homes may provide the ideal offerings for this program. Around here, you would not expect a wealthy immigrant to even consider a $500,000 house. A half mil could purchase an inexpensive condo/townhouse. The average worker in this area can not afford these expensive homes. The localities need to recover the property tax revenue and Mello-Roos owed on the properties.

[golfguru]

24. My home just sold to a Chinese person who paid cash!

And he already owns other homes.

[Raine1967]

21. I went to Lee's website:

because I want to look into this a little more:

http://www.lee.senate.gov/public/index.cfm/press-releases?ID=7d71bb4f-3752-4e86-af5f-85ecc9c0c142

The Visa Improvements to Stimulate International Tourism to the United States of America Act (VISIT-USA Act) would remove bureaucratic red tape that stifles travel and investment in the U.S. For instance, the bill would reduce barriers for Canadian and Chinese visitors whose consumer spending provides a lift to the U.S. economy. The bill would also expedite priority visa applicants, introduce videoconferencing as a means to screening foreign nationals, and make major changes to visa procedures for U.S. allies in the fight against al Qaeda.

To confront the housing crisis, the legislation would provide, for the first time, a three-year residential visa for foreign nationals who invest at least $500,000 in residential real estate in the United States. At least $250,000 must be spent on a primary residence where the visa holder will reside for at least 180 days out of the year while paying taxes to the U.S. Applicants would still be subject to standard criminal and national security background checks and, once approved, would not be able to receive government benefits such as Medicare, Medicaid, and Social Security. The program would not serve as a path to citizenship for foreign nationals. Real estate analysts have said this proposal could lift demand for U.S. homes and help ease the housing crisis. Famed investor Warren Buffett has also supported the concept of enticing foreign homebuyers previously.

Schumer said: "This concept has the potential to lift demand for the nation's excess homes. Our housing market will never begin a true recovery as long as our housing stock so greatly exceeds demand. This is not a cure-all, but it could be part of the solution to the housing crisis and won't cost the government a nickel."

---------------------------------------------------------------------
We don't have excess homes in this Nation. We have a lack of access to them.

That is the fault of our banking industry. That is the fault of Congress refusing to take action about this. Frank Dodd was a damn good start-- but it did not go far enough.

[handmade34]

38. +1

correct... this is not necessarily about the housing crisis

[meow2u3]

26. Right-wing immigration hypocrisy at its best!

They want to kick 99%er immigrants out and deport them, but are willing to fast-track 1%er immigration.

To paraphrase Mae West: it ain't just the Latinos we hate; it's the money, honey (that we love).

[JNinWB]

28. Most people can not afford 500K plus houses; no down payment or high annual income.

This may be a program that the Obama administration can institute without Congressional approval.

I think that it could be stimulative due to the expected regular, local expenses undertaken by these immigrants, noted above. It can cost 15K to 20K per month to maintain an expensive home---most of it going into the local economy.

These newcomers are also likely to bring professional level skills and, perhaps, start businesses. Looks like a win-win to me.

[flamingdem]

29. Doing this will end up inflating many othe costs in desirable areas nt

[JNinWB]

31. This is unlikely. A few rich immigrants purchasing homes cannot do much inflating.

I think that the local jobs to be gained will far outweigh any other considerations. Just paying the property taxes again will be a huge benefit. The property taxes/MR on a 1.8 million house could be @ 60,000 to the local govt. Or, the house could continue to sit empty and prone to vandalism.

[flamingdem]

32. I'm happy to let the prices drop, enough of housing bubbles and unreal prices nt

[JuniperLea]

34. Talk to the Japanese...

who bought up large buildings in Los Angeles... only to lose big.

anyone who can afford a 1.8 million dollar home doesn't pay much in taxes... that's the problem. we'll never see tax money from those houses.

we need to go back to a time when homes were affordable to most people.

[JuniperLea]

30. We'll need McHouses that can be afforded...

By Americans with McJobs.

This is all part of the plan that got us here. We will all end up owing our soul to the company store. We will work in the salt mines for $2 a day, give $1 to the company/landlord, and eat $1 worth of manufactured pseudo-sustainables akin to Soylent Green... of course that leaves no money for clothing, but dirty rags are easy to come by. It leaves no money for anything else... and that's just they way they want it. They want all of the money. All of it. Slurp!

[flamingdem]

33. Exactly, let's not get distracted with bandaids pushed by homeowners who stand to gain nt

[JuniperLea]

35. As you said upthread...

We've had enough bubbles. We need to settle into a real housing market... and a real stock market for that matter.

[flamingdem]

36. Imagine that!

When I saw the tiny run down houses selling for over a million on the Westside of L.A. I knew it was just a matter of time! I read this blog now and then to get a sense of the situation:

http://westside-bubble.blogspot.com/