U.S. Visa for Foreigners who Buy Homes

The following story caught our attention this morning from the Wall Street Journal.

Rich foreigners who buy high-end homes would get status in the United States if the recent legislation introduced in Congress passes. It is part of an effort to spur the depressed real estate market. Of particular note is that the visa would cover spouse and children of the principal home buyer, and their stay is good as long as the house is not sold. An interesting solution to a very complex issue.

We reproduce the complete story below.

By NICK TIMIRAOS

The reeling housing market has come to this: To shore it up, two Senators are preparing to introduce a bipartisan bill Thursday that would give residence visas to foreigners who spend at least $500,000 to buy houses in the U.S.

The provision is part of a larger package of immigration measures, co-authored by Sens. Charles Schumer (D., N.Y.) and Mike Lee (R., Utah), designed to spur more foreign investment in the U.S.
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Supporters of the bill, co-authored by Sen. Charles Schumer, say it would help make up for American buyers who are holding back.

Foreigners have accounted for a growing share of home purchases in South Florida, Southern California, Arizona and other hard-hit markets. Chinese and Canadian buyers, among others, are taking advantage not only of big declines in U.S. home prices and reduced competition from Americans but also of favorable foreign exchange rates.

To fuel this demand, the proposed measure would offer visas to any foreigner making a cash investment of at least $500,000 on residential real-estate—a single-family house, condo or townhouse. Applicants can spend the entire amount on one house or spend as little as $250,000 on a residence and invest the rest in other residential real estate, which can be rented out.
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The measure would complement existing visa programs that allow foreigners to enter the U.S. if they invest in new businesses that create jobs. Backers believe the initiative would help soak up an excess supply of inventory when many would-be American home buyers are holding back because they're concerned about their jobs or because they would have to take a big loss to sell their current house.

"This is a way to create more demand without costing the federal government a nickel," Sen. Schumer said in an interview.

International buyers accounted for around $82 billion in U.S. residential real-estate sales for the year ending in March, up from $66 billion during the previous year period, according to data from the National Association of Realtors. Foreign buyers accounted for at least 5.5% of all home sales in Miami and 4.3% of Phoenix home sales during the month of July, according to MDA DataQuick.

Foreigners immigrating to the U.S. with the new visa wouldn't be able to work here unless they obtained a regular work visa through the normal process. They'd be allowed to bring a spouse and any children under the age of 18 but they wouldn't be able to stay in the country legally on the new visa once they sold their properties.

The provision would create visas that are separate from current programs so as to not displace anyone waiting for other visas. There would be no cap on the home-buyer visa program.

Over the past year, Canadians accounted for one quarter of foreign home buyers, and buyers from China, Mexico, Great Britain, and India accounted for another quarter, according to the National Association of Realtors. For buyers from some countries, restrictive immigration rules are "a deterrent to purchase here, for sure," says Sally Daley, a real-estate agent in Vero Beach, Fla. She estimates that around one-third of her sales this year have gone to foreigners, an all-time high.

"Without them, we would be stagnant," says Ms. Daley. "They're hiring contractors, buying furniture, and they're also helping the market correct by getting inventory whittled down."

In March, Harry Morrison, a Canadian from Lakefield, Ontario, bought a four-bedroom vacation home in a gated community in Vero Beach. "House prices were going down, and the exchange rate was quite favorable," said Mr. Morrison, who first bought a home there from Ms. Daley four years ago.

While a special visa would allow Canadian buyers like Mr. Morrison to spend more time in the U.S., he said he isn't sure "what other benefit a visa would give me."

The idea has some high-profile supporters, including Warren Buffett, who this summer floated the idea of encouraging more "rich immigrants" to buy homes. "If you wanted to change your immigration policy so that you let 500,000 families in but they have to have a significant net worth and everything, you'd solve things very quickly," Mr. Buffett said in an August interview with PBS's Charlie Rose.

The measure could also help turn around buyer psychology, said mortgage-bond pioneer Lewis Ranieri. He said the program represented "triage" for a housing market that needs more fixes, even modest ones.

But other industry executives greeted the proposal with skepticism. Foreign buyers "don't need an incentive" to buy homes, said Richard Smith, chief executive of Realogy Corp., which owns the Coldwell Banker and Century 21 real-estate brands. "We have a lot of Americans who are willing to buy. We just have to fix the economy."

The measure may have a more targeted effect in exclusive markets like San Marino, Calif., that have become popular with foreigners. Easier immigration rules could be "tremendous" because of the difficulty many Chinese buyers have in obtaining visas, says Maggie Navarro, a local real-estate agent.

Ms. Navarro recently sold a home for $1.67 million, around 8% above the asking price, to a Chinese national who works in the mining industry. She says nearly every listing she's put on the market in San Marino "has had at least one full price cash offer from a buyer from mainland China."

Corrections & Amplifications
Harry Morrison bought a four-bedroom vacation home in Vero Beach in March. He first bought a home there four years ago from Sally Daley, a local real-estate agent. An earlier version of this story incorrectly said Ms. Daley sold the four-bedroom home to Mr. Morrison in March.

Write to Nick Timiraos at nick.timiraos@wsj

NY Governor Suspends Participation in Secure Communities Program

Today, Governor Andrew Cuomo took a very courageous move to suspend the state's participation in the Secure Community Program. If other states can follow through on similar move, maybe Congress and the white house can focus enough attention to the dire immigration problems we face in this country, and not make immigrants scapegoat.

We reproduce the entire news release below.:

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For Immediate Release: June 1, 2011

GOVERNOR CUOMO SUSPENDS PARTICIPATION IN FEDERAL SECURE COMMUNITIES PROGRAM

Governor Andrew M. Cuomo today announced that New York State will suspend participation in the federal Secure Communities Program to review the mounting evidence that the program is not meeting its stated goal and has serious consequences for witnesses, victims of crime and law enforcement.

The goal as stated by the federal government was to deport serious felons, and, based on evidence to date, it appears the program in New York is failing in this regard and is actually undermining law enforcement. Because of similar concerns, the Inspector General of the U.S. Department of Homeland Security (DHS) is investigating the program.

"There are concerns about the implementation of the program as well as its impact on families, immigrant communities and law enforcement in New York," Governor Cuomo said. "As a result, New York is suspending its participation in the program."

In a letter to DHS, Governor Cuomo's administration stated that information produced thus far has called into question – at both the federal and state levels – the implementation and intended effect of the Secure Communities program.

Governor Cuomo's office has also received complaints stating that the goals of the program were not being met. The questions raised are further aggravated by inconsistent statements by DHS and a failure to disclose basic information about the program.

Congressman Jose E. Serrano said, "Governor Cuomo has taken a brave and necessary step in suspending New York State's participation in the flawed 'Secure Communities' program, and he deserves great praise. He is firmly in line with our state's pro-immigrant tradition and on behalf of the immigrants and their friends in our community, I would like to thank him. Having New York State pull back from this unfair and aggressive program should be a wake-up call to the Department of Homeland Security. It is time to end this program and I am glad my home state will no longer take part."

Congresswoman Nydia M. Velázquez said, "I thank Governor Cuomo for showing the leadership and foresight to suspend this misguided program, which does not reflect New York's long history as a welcoming home for newly arrived immigrants. The Secure Communities initiative does not make our nation safer, but inhibits cooperation with law enforcement and violates immigrants' due process rights."

Derek P. Champagne, Franklin County District Attorney and President of the District Attorneys Association of the State of New York (DAASNY), said, "By suspending the state's participation in this program until a comprehensive review is complete, the Governor is sending a strong message that the law enforcement tools we utilize must be clearly communicated, evenly applied and effective. We will continue to use the effective tools that have been in place for many years to ensure that we are identifying and preventing any risk to public safety."

Janet DiFiore, Westchester County District Attorney, said, "I support Governor Cuomo's decision to take New York State out of the Secure Communities Program in light of reports of the unintended consequences by its implementation. I remain confident that law enforcement throughout the state presently has sufficient tools at its disposal to continue to safeguard and protect all New Yorkers."

State Senator Adriano Espaillat, Chair of the Latino Caucus of the Senate, said, "Governor Cuomo's decision to end the so-called Secure Communities program in New York will restore rights and justice to countless immigrants across the state. We must enact policies and reforms that bolster our diverse population, not penalize it by instilling a sense of fear of wrongful deportation in our neighborhoods."

State Senator Gustavo Rivera, Vice Chair of the Latino Caucus of the Senate, said, "I applaud Governor Cuomo for having the courage to put an end to this program's existence in New York. The Secure Communities program has frightened victims and witnesses of crime from coming forward. We need to make our neighborhoods safe places for our families and not take part in a problematic and contradictory program that hinders our safety."

Assemblyman Felix Ortiz, Chair of the Puerto Rican/Hispanic Task Force, said, "The Secure Communities program has done the opposite of what it was supposed to do, and Governor Cuomo is right in removing our state from the program. While we continue to work to find ways to make it safer for victims and witnesses of crime to come forward and be a part of the process to save our communities, we must not let our state be part of an experiment that puts innocent people at risk."

Thomas H. Mungeer, President of the New York State Police Benevolent Association, said, "We support Governor Cuomo's action today in suspending Secure Communities until the numerous questions, including a federal Inspector General's investigation, can be resolved. Police rely upon a partnership with the communities that they serve to ensure the public safety of us all. The questions that have surrounded the implementation of Secure Communities drives a wedge between law enforcement and the people they are sworn to protect. We are confident that the procedures we currently use and the strong relationships we currently have with federal, state and local authorities will ensure that we can keep our communities safe while also maintaining our relationship of trust."

John Poklemba, Counsel to the New York State Association of Chiefs of Police, said, "Governor Cuomo has made the right decision to take New York State out of the controversial Secure Communities program. This program unfortunately has had a negative impact on our crime-fighting efforts. Law enforcement must have tools and resources that are both effective and fair."

Jack Mahar, Sheriff of Rensselaer County and President of the New York State Sheriffs Association, said, "Every day, law enforcement officers put their lives on the line to rid our neighborhoods of crime, and we do it with the cooperation of the law-abiding public. This program was intended to make communities safer and stronger, but many people question whether this program has really accomplished its objectives. Governor Cuomo is right to remove our state from this program until all concerns are addressed."

Clinton County Sheriff David Favro said, "Governor Cuomo's decision to freeze the Secure Communities program until the questions that have been raised about its implementation can be settled, is a wise one. While we are sworn to keep our communities safe, that cannot come at the price of their trust. Our strong current partnerships with federal law enforcement and long-standing operations in this state will ensure that we continue to communicate effectively to identify undocumented immigrants in our county jails and take appropriate actions."

Chautauqua County Sheriff Joseph Gerace said, "We support Governor Cuomo's action today in suspending Secure Communities until the numerous questions, including a federal Inspector General's investigation, can be resolved. Sheriff departments rely upon a partnership with the communities that they serve to ensure public safety for us all. The questions that have surrounded the implementation of Secure Communities jeopardizes that relationship. We are confident that the procedures we currently use and the strong relationship we currently have with federal, state and local authorities will ensure that we can keep our communities safe while also maintaining our relationship of trust."

Steven Krokoff, Chief of the Albany Police Department said, "In light of the confusion surrounding this program and the pending Inspector General's review, the Governor's decision to freeze this program until the federal review is complete is appropriate. The procedures we currently use will ensure the safety of neighborhoods across the state while at the same time encouraging individuals in all communities to come forward to report crimes."

Donna Lieberman, Executive Director of the New York Civil Liberties Union, said, "We applaud Governor Cuomo for taking the bold step of removing New York State from the Secure Communities initiative, which, despite its name, has become a sore subject for those who work day and night to make our neighborhoods safer. We need to ensure that vulnerable populations are protected, and the decision to remove our state from this program is a positive move for all New Yorkers."

Chung-Wha Hong, Executive Director of the New York Immigration Coalition, said, "For centuries, families have gone to great lengths to come to this great nation, and we owe it to ourselves and our neighbors to make sure the law is on their side. Unfortunately, the Secure Communities program has failed to provide protections to many individuals. Governor Cuomo's decision to remove New York from the program is a right one, and we look forward to working with him to make our state safe for all residents."

A copy of the letter sent to DHS can be found at: www.governor.ny.gov/assets/Secure%20Communities.pdf.