The Wall Street Journal reports that foreigners have contributed to a growing number of home purchases in South Florida, Southern California, Arizona and other areas like Las Vegas.
The details of the proposal, as outlined by The Wall Street Journal, are that “any foreigner making a cash investment of at least $500,000 for a single-family house, condo or townhouse would be entitled to a visa.
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.” The new visa would not allow the foreign homebuyer to work in the U.S. unless they hold a regular work visa, according to The Wall Street Journal. Buyers would be allowed to bring along their spouse and any children under the age of 18. If the property were ever sold then the visa would be deemed invalid.
Even without this type of legislation, foreign investors bought $82 Billion of US real estate from March 2010 through March 2011. Foreign investors bought $66 billion of US real estate in the same timeframe from March 2009 through March 2010 according to the National Association of Realtors.
The proposed bill may change the outlook on the housing market across the country which would indeed help Las Vegas. The missing cog in the wheel is the homeowners who want to move to Las Vegas but are having problems selling their homes. The investors could buy the homes underwater via a short sale which could decrease the foreclosures that are driving down prices.
Critics do not think foreigners need more encouragement to buy U.S. homes. Critics think that the real resolution to the real-estate woes is to “fix the problems with our economy”, not to provide visas to more foreigners.
Our concern so far is that this could create false appreciation – like we had in 04, 05 and 06 – and cause future problems for us. Realtors are writing Congress and asking them to require market value appraisals with guidelines to dictate the amount required to purchase a home. Also,there are Realtors who are pushing for the repeal of the Dodd legislation that is stopping the small banks from lending to potential homeowners.
MOST WILL ASPIRE TO OWNING HOME
Here is some history about a similar 1990 program.
The visa for Immigrant Investors is called the EB-5 visa. The program was created by the Immigration Act of 1990.
This visa provides a method of obtaining a green card for foreign nationals.
The investment had to be $1,000,000 or at least $500,000 in a targeted employment area where the investment would create or preserve at least 10 jobs. Prior law required the investment in the Regional Center to generate an increase in export sales, however statutory amendments in 2000 and 2002 removed this requirement.
The individual receiving the visa is not required to actively manage the business invested in.
The original Immigrant Investor Pilot Program was created by Section 610 of Public Law 102-395 on October 6, 1992. This was in accordance to a Congressional mandate aimed at stimulating economic activity and job growth, while allowing eligible aliens the opportunity to become lawful permanent residents. This “Pilot Program” required only $500,000 of investment in exchange for permanent resident status. The investment could only be received by an economic unit defined as a Regional Center.[3] See Nevada below.
A Regional Center is defined by any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.
The individual receiving the visa is not required to actively manage the business invested in. For investors who wish to invest in a new or existing business, have an active role in the management of the operation (although simply being a Limited partner in the organization that owns the business qualifies as “AN ACTIVE ROLE.”), and have at least one million US dollars to invest ($500,000 if the business is located in certain areas deemed as Rural or with very high unemployment), then the traditional EB-5 visa is the best option.
The Startup Visa Act (projected EB-6 visa), introduced in Congress in 2010 and subsequently in 2011, is planning to use unallocated numbers from the EB-5 visa.
Nevada
Funds To Build Las Vegas
Clark County Regional Center / Landmark Development Partners, LLC
Geographic Area Covered: Clark County
Allowed Activities: Light Industrial/Warehouse Space, multi-story office building, retail mall shopping center anchored by two larger stores, and skilled nursing facility
Nevada Regional Economic Development Center (NREDC)
Geographic Area Covered: Nevada
Allowed Activities: Service Industry, Infrastructure, Waste Mgmt & Transportation.
American Dream Fund – Las Vegas
Geographic Area Covered: Clark County
Allowed Activities: Casino, Food and Beverage, Hotel, Senior Care
