Foreigners - buy a home in US and you will get the Green Card
Started by HT1
over 16 years ago
Posts: 396
Member since: Mar 2009
Discussion about
This last Tuesday the Wall Street Journal published an op-ed by Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis: give foreigners who will come to the US and buy a home resident status (green cards). Housing values would stabilize and in many cases rise. The massive losses because of bad loans that are being subsidized by US taxpayers would be stemmed, saving... [more]
This last Tuesday the Wall Street Journal published an op-ed by Gary Shilling and Richard LeFrak. They offer a simple solution for the housing crisis:
give foreigners who will come to the US and buy a home resident status (green cards).
Housing values would stabilize and in many cases rise. The massive losses because of bad loans that are being subsidized by US taxpayers would be stemmed, saving many hundreds of billions, if not a trillion or more dollars. The excess inventory of homes would quickly disappear and the millions of jobs that were lost as home construction fell into a deep depression would come back. If housing values rise, many families would be able to refinance their homes at lower rates and have more income left over after paying their mortgages. $12 billion in commissions would end up in real estate agents' pockets, helping a very battered and bruised group. Hundreds of billions will flow into local businesses, as these new immigrants will need to furnish their homes. This could mean as much as a half trillion dollars in sorely needed stimulus in the next few years, without one penny of taxpayer money and actually adding taxes back to governments from local to national. And we are not bringing in 1 million foreigners, we are attracting 1 million mostly middle-class new Americans, which, if we are smart in how we do this, will result in more jobs for all Americans.
Shilling shows that we built 6.7 million more homes in this country between 1996-2005 than the normal trend would have projected, partially because we underbuilt the decade before that. New housing starts average about 1.5 million in normal times but have fallen to 500,000 recently, and could fall further as unemployment rises and demand declines. Even so, Shilling estimates that we still have about 2.4 million excess homes.
It will take at least until 2012 to work through this excess inventory, and that assumes that foreclosures do not increase as housing prices drop.
Excess supply of anything means lower and continuously falling prices, and that has certainly been the case in housing. Here is what Shilling writes:
"We believe that if nothing is done to eliminate surplus housing, prices will fall another 20% between now and the end of 2010 for a total peak-to-trough decline of 37% The resulting further negative effects on the economy will be devastating. At that point, almost 25 million homeowners, or almost half the 51 million total with mortgages, will be underwater… That's also a third of the 75 million total homeowners, with the remaining 24 million owning their houses free and clear. It would take a little over $1 trillion to reduce their mortgages to the value of their houses, compared to $449 billion for the almost 14 million currently underwater."
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Response by HT1
over 16 years ago
Posts: 396
Member since: Mar 2009
Let's assume one million new immigrants would buy homes. At an average price of almost $200,000, that would be $200 billion injected into the economy. And each of those homes has to be furnished, food has to be bought, clothing will be needed, local taxes will be paid. Airplane tickets to research potential areas, hotels needed during the interim period, and other related expenditures would add up. Over two years, this could easily be another $100 billion.
Couple 1 million new buyers with current US demand, and the excess inventory would be worked through within a year, and possibly faster. This puts a floor under the housing market, and home values could once again to begin to rise in line with a growing economy.
Such a program would have a salutary effect on the value of the dollar, as not only the initial purchases of homes and materials would need to be converted to dollars, but it is likely that immigrants would bring even more capital into the country.
By stemming the fall of home values, it would decrease the likelihood of foreclosures and help homeowners get refinancing at lower rates. Refinancing now is difficult because most lenders want a substantial slice of equity to go along with any new mortgage. If your home value has dropped 20% and is likely to fall another 20%, it is hard to have enough equity to qualify for a new mortgage. Stopping the fall in prices is critically important; and maybe if prices rise in some areas, homeowners will be able to refinance at better rates, giving them more cash each month to save or spend.
God HT1...Migration is something serious. You don't want people to be eligible for residency just because they have some money to buy an apt, big or small. Wrong approach, I think.
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Response by sirwinston
over 16 years ago
Posts: 103
Member since: Mar 2009
have seen this proposal before and it seems incredibly smart to me...sadly, its politically impossible, since our fellow citizens want to keep people out because of fear for their jobs and resource drain (govt, medical, schools etc.)...misplaced concerns to be sure, but thats the reality...xenophobia and protectionism on the rise
requiring people to buy houses is one way to limit the #'s, but perhaps if programs still not politically feasible they could try adding addtl requirements like requiring PhD or MD or professional degree...or they could simply put a limit on the #'s admitted with these criteria
i think its smart to try to increase immigration as much as possible, even if numbers smaller than ultimately desired...
imagine the brain power/human capital the US could attract if such policies were adopted! amazing!
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Response by mimi
over 16 years ago
Posts: 1134
Member since: Sep 2008
Oh, god, accepting olny PHD's.. Why not only people with a genius IQ? What about a testing IQ results contingency?
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Response by sirwinston
over 16 years ago
Posts: 103
Member since: Mar 2009
thats a good thought mimi, but perhaps impractical...your sarcasm is noted, but thats exactly what i think is best policy: get the smartest, most skilled people possible to live here...human capital is absolutely central to a nation's prosperity and success
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Response by HT1
over 16 years ago
Posts: 396
Member since: Mar 2009
In 2006, foreign nationals residing in the U.S. were named as inventors or co-inventors on 25.6% of the 42,019 international patent applications filed from this country, up from 7.6% in 1998. Studies of the authorship of academic papers show the same trend.
"U.S. educational institutions are considered the best in the world by many and are magnets for foreign students, especially at the graduate level. Many of them are inclined to settle and work in this country after completing their studies, if they can obtain permanent resident status.
"The Council of Graduate Schools survey revealed that in the fall of 2007, 241,095 non-U.S. citizens were enrolled in graduate programs. Technological progress and the productivity it generates depends on people educated in biological sciences, engineering and physical sciences, but only 16% of U.S. citizen graduate enrollment was in these three disciplines. In contrast, 55% of total non-U.S. citizen enrollment was in those fields. Conversely, 53% of graduate enrollment by Americans was in education, business and health sciences while those three fields accounted for only 24% of foreign graduate students."
That would be the target group
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Response by Seamus
over 16 years ago
Posts: 61
Member since: May 2007
This will be great for cities like New York, as immigrants tend to flock to major cities. I dont think they'll take up the homes built in the middle of nowhere. So buying in those areas should probably be a requirement too.
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Let's assume one million new immigrants would buy homes. At an average price of almost $200,000, that would be $200 billion injected into the economy. And each of those homes has to be furnished, food has to be bought, clothing will be needed, local taxes will be paid. Airplane tickets to research potential areas, hotels needed during the interim period, and other related expenditures would add up. Over two years, this could easily be another $100 billion.
Couple 1 million new buyers with current US demand, and the excess inventory would be worked through within a year, and possibly faster. This puts a floor under the housing market, and home values could once again to begin to rise in line with a growing economy.
Such a program would have a salutary effect on the value of the dollar, as not only the initial purchases of homes and materials would need to be converted to dollars, but it is likely that immigrants would bring even more capital into the country.
By stemming the fall of home values, it would decrease the likelihood of foreclosures and help homeowners get refinancing at lower rates. Refinancing now is difficult because most lenders want a substantial slice of equity to go along with any new mortgage. If your home value has dropped 20% and is likely to fall another 20%, it is hard to have enough equity to qualify for a new mortgage. Stopping the fall in prices is critically important; and maybe if prices rise in some areas, homeowners will be able to refinance at better rates, giving them more cash each month to save or spend.
source: John Mauldin's Weekly E-Letter
http://www.bu.edu/phpbin/news-cms/news/?dept=644&id=52604&template=230
God HT1...Migration is something serious. You don't want people to be eligible for residency just because they have some money to buy an apt, big or small. Wrong approach, I think.
have seen this proposal before and it seems incredibly smart to me...sadly, its politically impossible, since our fellow citizens want to keep people out because of fear for their jobs and resource drain (govt, medical, schools etc.)...misplaced concerns to be sure, but thats the reality...xenophobia and protectionism on the rise
requiring people to buy houses is one way to limit the #'s, but perhaps if programs still not politically feasible they could try adding addtl requirements like requiring PhD or MD or professional degree...or they could simply put a limit on the #'s admitted with these criteria
i think its smart to try to increase immigration as much as possible, even if numbers smaller than ultimately desired...
imagine the brain power/human capital the US could attract if such policies were adopted! amazing!
Oh, god, accepting olny PHD's.. Why not only people with a genius IQ? What about a testing IQ results contingency?
thats a good thought mimi, but perhaps impractical...your sarcasm is noted, but thats exactly what i think is best policy: get the smartest, most skilled people possible to live here...human capital is absolutely central to a nation's prosperity and success
In 2006, foreign nationals residing in the U.S. were named as inventors or co-inventors on 25.6% of the 42,019 international patent applications filed from this country, up from 7.6% in 1998. Studies of the authorship of academic papers show the same trend.
"U.S. educational institutions are considered the best in the world by many and are magnets for foreign students, especially at the graduate level. Many of them are inclined to settle and work in this country after completing their studies, if they can obtain permanent resident status.
"The Council of Graduate Schools survey revealed that in the fall of 2007, 241,095 non-U.S. citizens were enrolled in graduate programs. Technological progress and the productivity it generates depends on people educated in biological sciences, engineering and physical sciences, but only 16% of U.S. citizen graduate enrollment was in these three disciplines. In contrast, 55% of total non-U.S. citizen enrollment was in those fields. Conversely, 53% of graduate enrollment by Americans was in education, business and health sciences while those three fields accounted for only 24% of foreign graduate students."
That would be the target group
This will be great for cities like New York, as immigrants tend to flock to major cities. I dont think they'll take up the homes built in the middle of nowhere. So buying in those areas should probably be a requirement too.