We all know the depressing statistics – housing prices have fallen 33 percent since the housing bubble burst in 2008. This is higher than the drop in market value even during the height of the Great Depression. And while house prices continue their slide, four out of five new mortgages require at least a 20 percent down payment, putting home ownership out of the reach of most Americans. Almost five million households are either in foreclosure proceedings or are perilously close to falling into that morass. Fortunately, there is an answer that will help solve the housing crisis – immigrant investors.
Here’s how and why such a program will work, if only we have the vision to make this happen: Despite all of its many problems, America is still viewed throughout the world as the beacon of hope and opportunity. Class, ethnic and religious distinctions matter little to most Americans. And we still have economic and educational opportunities galore making us the most attractive option for immigrants around the world. Many of those immigrants are affluent and would be willing to invest in a foreclosed property in exchange for getting U.S. permanent residence status.
Congress should pass legislation creating a three-year pilot program to grant permanent residence status annually to 100,000 special immigrant investors (plus their spouses and minor children) who make a $500,000 cash purchase of a distressed residential property. Upon the closing of the property, the special immigrant investor would file a petition with U.S. Citizenship and Immigration Services (USCIS) to establish that the cash investment was made resulting in the purchase of a qualifying distressed residential property. Each immigrant would then be eligible to apply for permanent residence either through USCIS if they are physically in the United States in a valid status, or by immigrant visa processing at a U.S. Consulate abroad. Strict time limits for government adjudications could be written into the law to make sure that each investor and his immediate family are able to come and live in their properties and earn a living in the United States within several months of the closing.
This proposal would produce 1.5 trillion dollars in revenue to banks and other lending institutions now holding the mortgages on these distressed properties. I’m no economist, but it seems like a fantastic deal to help make our financial institutions more solvent and to create more tax revenue from the extra profits being generated. An economist might even wish to add a requirement that each lending institution that makes a sale to an immigrant investor loan a certain percentage of the proceeds to American citizens and permanent residents now finding credit so hard to obtain. Meanwhile, neighborhoods being decimated by abandoned deteriorating houses would be reinvigorated by having owners with a financial stake in maintaining them and in most cases, wanting to live in them. This in turn will spur further job growth by the range of services needed to spruce up and maintain these houses.
At the end of the day we will have 300,000 new immigrant investors willing to pay for the privilege of becoming permanent residents by becoming our home-owning neighbors across America. Since we have a commodity people want and a distressed housing stock that continues to depress the economy, this is a perfect match. It won’t solve our economic crisis, but it can be a major tool in the recovery efforts.
Now is the time for Congress to act. This isn’t a Republican or a Democratic issue. It’s just smart, forward-thinking policy.