Solution to housing problem

"...the quickest way to add enough home buyers with money to absorb the inventory."

Except the real housing problem is not that there are too much inventory or that there are not enough potential buyers. The problem is that the prices are too high relative to income.

Or you just let prices gradually drop until renters start buying. Called "capitalism".

"brings capital to this country"

In case you missed it, the country is awash in capital. So much capital around that people are happy to put their money in 0% savings accounts even though they know inflation is higher.

Other countries do that. (So do we already, for all I know.)

E.g., if you want to emigrate to Australia, you can either get on the queue or else bring in $x in capital.

RS, it's hard enough for current citizens with capital to keep a business alive during that "incubation period" that you are referring to. The idea that "foreigners with capital to come here and start a business" would be a solution of any kind is unrealistic.

The US was already doing that 8 years ago, and it's still on-going, so I don't know it's going to save us from anything.

Sure, we've got such a program as well. It's new to Jonathan Miller and RS apparently, but it is now 20 years old:

http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextchannel=facb83453d4a3210VgnVCM100000b92ca60aRCRD&vgnextoid=facb83453d4a3210VgnVCM100000b92ca60aRCRD

It's fascinating how far people will stretch when they cannot accept the obvious solution to a problem.

RSer: that prog. has been up and running for a while. And yes, there are um, quasi-legit shell cos. that exist for this very purpose to get furriners their GCs.

The Canucks and Aussies pioneered this in the 80s to capture rich HKers who needed a passport in their back pockets. They now live back in HK or China, with foreign passports. Canada recently tightened up citizenship eligibility for 2nd gen. kids born outside Canada to Canadian parents.

One thing that often gets missed is that rich foreigners often do not want a greencard. If you're a rich French guy, what exactly does the US buy you? And if you're a rich Arab, why the hell do you want the US to tax all your worldwide holdings at 40-50%? Live in the US on a visa, sure, but why buy the cow when you can get the milk for free (for a while, at least)?

One look at the prosperity of Vancouver all built with foreign money shows the potential for expanding the use of bringing in more educated foreigners with capital and entrepreneurial talent. There are far more people who would like to live here than we permit or encourage.

I'll let you in on a little clue since you probably don't know many foreigners, RS. Canada is the ugly girl for educated foreigners. Broadly speaking, they go there when the pretty girl (the US) doesn't want to date them. No offense to the Canadians on this board, but you all know what I'm talking about since obviously since you're living here now ;).

i'm sure plenty of foreigners are eager as hell to move to and start a business in vegas, detroit, california's inland empire, all the places that have a huge overhang of inventory.

True, Inonada. I know a few Europeans who live here in NYC at least part-time, and would never get the US citizenship for taxation reasons. They establish their residence in London, and share their time between their home country, London and NYC.
RS, Vancouver is a very special situation, a gorgeous border city that targeted a specific US industry. That said, I agree that we have tightened legal immigration until it hurt (us.) Now we have a terrible system, so expensive and cumbersome we lose out on graduate students (who are the prize) and so idiotically enforced we have valedictorians with no way to college and permanent illegal workers.

"Except the real housing problem is not that there are too much inventory or that there are not enough potential buyers. The problem is that the prices are too high relative to income. "

Why exactly is it a problem? Why is AFFORDABILITY an issue?

Cheaper housing costs and more options for people is NOT a bad thing for those who didn't think of houses as machines.

Why prop up the competition for what makes up the largest expense category for most people?

Inonada: very true. I don't think that wealthy Arabs and Frenchmen are the ones who take advantage of the business-investment (think it's 500k?) GCs. Canadians are happy to be the farm team, generally.

AR: Funnily enough, some of the businesses that have been setup to help furriners take advantage of this offer are in inland CA.

Inonada: Canada also does not tax its non-resident citizens. Nor does it have estate or gift tax. This makes it attractive to foreigners who have no intention of residing there permanently (3 year track to citizenship) but need a backup passport. It is less attractive to educated professionals who seek to make a living in their new home.

somewhereelse, I do not understand your reply to my comment unless you interpreted what I wrote as a call for higher income instead of lower housing price. I agree 100 pct that 'cheaper housing costs and more options for people is NOT a bad thing for those who didn't think of houses as [atm] machines.'

We already have such a program called the EB-5 Visa.

http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=cf54a6c515083210VgnVCM100000082ca60aRCRD&vgnextchannel=cf54a6c515083210VgnVCM100000082ca60aRCRD

Next time Jon Miller and Riversider should do their homeowork before advocating for a program that already exists.

I'm pretty sure the OP got this wrong (shocking, I know), but someone will have to listen to the podcast to know for sure. You are all assuming this is the EB5 program. However, Barry has written about this in 2009:

The proposal is to allow people to immigrate if they buy a HOUSE. "Buy a House, Get a Green Card." This is not the investment thing.
http://www.ritholtz.com/blog/2009/03/solving-the-housing-crisis/

How many people are going to buy a house specifically because they get citizenship if they do so? You think all of the immigrants coming in through Mexico are going to by houses?

And what is to stop them from selling their house immediately after getting citizenship?

Also, 90% of new businesses fail. What will happen when all those new immigratns become unemployed? Are they going to flood the job market and push up unemployment?

Are you anti-immigration?

I don't believe in open borders. Someone has to draw a line between immigration and cheap labor.

Ok I agree, and also at some point we need immigration to support obligations to the older population.

Won't we then owe obligations to the immigrants when they become older?

Of course, but at least we can postpone the problem and lower the benefits on them, right?, because right now the obligations owed to current and soon-to-be retirees has ballooned, right?

nobodys benefits should eb lowered. Instead, rise the cap on icome that is subject to the payroll tax.

Alright, then problem solved, immigration will work just so long as we can raise the payroll tax cap.

"I heard this on a Jonathon Miller podcast. Seems like it's one of the best ideas out there. The idea is to allow foreigners with capital to come here and start a business."

The housing problem is caused by too many people and not enough houses. Allowing more people to move here, and not building any more housing units, will make the housing problem WORSE, not better.

Wait, we were talking about the housing problem in Manhattan, right?

No, Vegas and San Berdoo.

The housing problem is caused by too many people and not enough houses. Allowing more people to move here, and not building any more housing units, will make the housing problem WORSE, not better.

----------------
Depends what problem we're trying to solve. Creating more affordable rental stock, or reducing shadow inventory.

"Home Prices Aren't Going Anywhere Until Hiring Improves"

"Washington has thrown billions at the housing slump over the past two years in an effort to support demand, keep people in their homes, and limit foreclosures.

However, the simple truth is that any meaningful recovery in housing must come through the labor markets. Stronger job growth will boost home demand, reducing inventories."

http://www.businessinsider.com/home-prices-arent-going-anywhere-until-hiring-improves-2011-1

Housing prices aren't going anywhere except down, down, down. Miller's Millionaire's aren't going to solve the structural problem of the housing market and overall economy.

Riversider:

1. the United States had an investment/citizenship law over 20 years ago
2. it's not a very good idea today because terrorist groups could use it

At the risk of being off-topic to this discussion, how about permitting homeowners to take a cap loss on their primary RE purchases/sales (just as they do now for any gains)? This would help ease the pain of selling at a loss and accelerate getting to equilibrium. Housing is after all an investment, right? ;-)

Instead of getting a green card for setting up a business, why not for buying a house, say >200k. that'll get rid of the inventory and screen off the yahoos.Plus only in "bad areas": midwest, vegas,brooklyn...(joking,joking).
US citizenship is unfortunately a serious disease these days. Banks all over the world refuse american clients because of reporting and liability issues.and world taxation.and US spying on its people...and the labels (warmongers..) US citizenship abandonment is a florishing business in the carraibans. WHAT happened?

Bringing in educated and successful foreigners is one of the best short term fixes for improving our international competitiveness and for improving the economy. People with the above mentioned attributes provide valuable skills and services, make our businesses more competitive, create new jobs and services, and add both consumption and savings to our economy. Some of our most entrpeneurial success stories come from immigrant populations.

"Bringing in educated and successful foreigners is one of the best short term fixes for improving our international competitiveness and for improving the economy."

We're not "competitive" because people in China will work for less than 10 dollars a day. How can we compete against that?

However, I suppose I can support allowing anyone with more than $200K of assets to move here. I also strongly support not letting anyone else move here. Unemployment is 10%. The forests are being chopped down to build more suburbs. WE DON'T NEED MORE PEOPLE IN THIS COUNTRY.

We're not "competitive" because people in China will work for less than 10 dollars a day. How can we compete against that?

I'm talking Engineers & Doctors and people who have millions in the bank
and you're talking Foxconn

"Bringing in educated and successful foreigners is one of the best short term fixes for improving our international competitiveness and for improving the economy. People with the above mentioned attributes provide valuable skills and services, make our businesses more competitive, create new jobs and services, and add both consumption and savings to our economy."

This sounds a lot like the H1-B Visa program, which is a TOTAL sham and should be abolished tomorrow. Once again Riversider is advocating for a program that ALREADY EXISTS.

Doctors have millions in the bank? On what planet do you live on?

"somewhereelse, I do not understand your reply to my comment unless you interpreted what I wrote as a call for higher income instead of lower housing price. I agree 100 pct that 'cheaper housing costs and more options for people is NOT a bad thing for those who didn't think of houses as [atm] machines.' "

Sorry, I was unclear. I actually agreed with you. My surprise was in reaction to the original post.

I find it wacky that folks think a return to appropriate prices after a bubble for an important consumer good (the most important, perhaps, after food) is a bad thing.

what type of business? how do you define "up and running"?

I saw a RealtyTrac executive on Fox Noise last week predicting that home prices are going to stabalize later this year. KInd of suprised to hear it from them because they have been making nothing but gloomy predictions for the past few years.

socialist: he didn't say that. read carefully. but he wouldn't be wrong. there's plenty plenty of millionaire drs especially in "non show off" areas (midwest and particularly south).their income there is much higher than NYC (no overhead) and the cost of living is ridiculously low.
love the name: "socialist"

Millionaire doctors are very smalll in number.... a very tiny percentage. Many doctors are seeing their incomes decline due to rising malpractice insurance and Medicare cuts.

Another problem with Riversider's proposal (which, again, ALREADY exists) is that it drives down wages, making science and technology jobs unattractive to American students. "Making businesses competitive" is code word for CHEAP LABOR.

Believe me it's not a small number. they tend to live like "the millionaire next door" (you couldn't tell).

I have 6 doctors in my family. Only one makes good money. Another one is likely going to shut down his practice because he is barely making enough to cover his expenses.

they live in china? that would explain the name.sorry to hear that.but you're right medicare is beyond bankrupt

"I'm talking Engineers"

The country is already full of unemployed engineers--why hire a high-paid American engineer when you can hire cheap H1-B engineer? That's what's happening. It's not making our nation more competitive, it's just making American-born engineers poor and underemployed.

Exactly. bob hit the nail right on the head. Why become an engineer and face dim job prospects when you can go get a top MBA and get paid 6 digits to lay off engineers?

Guys (bob, socialist): have u figured out why the republican party always talk about "securing the border" and never implement immigration laws? isn't that contradictory?

They want cheap labor... DUH

yes sure but what else

huntersburg on a plate.

Socialist, I'd rather have higher employment across the board.

In your mind, is it worthwhile for U.S. citizen engineers to consider lower wages and/or benefits?

less huntersburg will work wonders.

some people just despise the middle class.

Who does?

republicans, democrats, george bush, barack obama, wall street, the federal reserve, the treasury......etc...etc...

Are they all also responsible for the bad weather?

absolutely

you forgot riversider, nicercatch. the affluent foreigners will do far more for his real estate valuations. who needs americans to do the work when free trade and permissive immigration standards for even more high earnerss (yea, don't question the details, just be a follower!!), will provide cheap labor and an increasingly divisive standard of living between the haves and the have nots? just remember, more wealth among the wealthy leads to greater happiness for all.

We should keep out high earners from coming to the U.S.? What an absurd suggestion.

a quick study of the Korean immigration wave of the 80's and 90's should yeild results.
They represent an immigrant group that showed up with education money and drive and the results can be measured today. Did they absorb a giant componet of our housing over time? Did they create industries that employed the masses? I don't know. They did work hard an achieved the 'american dream' in record time. As for such a group to save the economy and the housing market...I think Jonathans' been sniffing the toner.

>a quick study ... should yeild results.
>Did they ...? I don't know

Not helpful.

the point i was trying to make asking the question is that the answer has already been given by those in power. there is no limit to immigration and it is planned that way to implement the northamerican market place (so called "security and prosperity agreement").to the detriment of american workers. who signed it? GW. for whom? not those who voted for him. for those who control the system.the top 0.1%.
it's done. immigration law is porous at best and designed that way.
the rest is posturing

"Guys (bob, socialist): have u figured out why the republican party always talk about "securing the border" and never implement immigration laws?"

Both parties are run by rich people for the benefit of rich people.

Helooo Riversider!

bob_d - the golden rule = those with the gold make the rules.