Immigrants can save the US housing market. That was the underlying message of an op-ed piece by Gary Shilling and Richard Lefrak that ran in The Wall Street Journal on March 17, 2009. The solution they propose is simple. If an immigrant family can come up with a minimum amount of money to buy a house in the US, its members should be granted visas. In this way, the severely lacking demand for houses will increase, stimulating real estate and construction businesses and giving the economy a general boost.>
The argument that immigrants could boost the housing market has its roots in 2007, when an article by Paul Restinas, director of Harvard Universityâ€™s Joint Center for Housing Studies, appeared in The Boston Globe. Restinas pointed out that much of the current home-buying pool is made up of the foreign-born population who need somewhere to stay with their families, and that we should embrace this trend and take advantage of the market. The piece received a ripple of internet response from those for and against the concept. But without a concrete plan to implement, it seemed to drift out of the public consciousness. Now, with the new US government administration in place and a promise from President Obama to begin reforming immigration policy in the near future, the idea of immigration as a way out of the housing crisis has garnered renewed attention.
Predictably, the proposal to grant visas for immigrant homebuyers has sparked a strong opposition. Some argue that the US needs to solve its own economic problems without depending on a foreign born population or that the measure is too drastic and will encourage a large influx of people who will suck up jobs in an already failing job market.
Proponents of the plan to bring in immigrant homebuyers are formulating detailed proposals that mirror the process of getting an EB-5 visa, or a visa for immigrants who invest a set sum of money in an enterprise that creates at least ten new jobs. Each year, 10,000 EB-5 visas are set aside for immigrants who have an idea for an original business or plan to purchase or significantly expand and existing business. Debate continues about exactly how much money immigrants should have to pay for a house in order to get a visa, but the minimum amount seems to be $100,000. The hope is that immigrants would come in with enough money to provide for their families and contribute to the struggling consumer markets. If the plan works, it has the potential to save many American industries, but this proposal has a long road ahead before it could come to fruition.