There's a new visa bill before Congress, and some news organizations are already comparing it to the EB-5 program.
Senators Charles Schumer (D-NY) and Mike Lee (R-UT) have introduced legislation that would institute a new visa category targeting high net worth foreign nationals. No, it's not the startup visa everyone's been talking about. In fact, the individuals it would attract probably have more in common with current EB-5 investors than with potential immigrant entrepreneurs.
The new bill would provide a tourist visa to any foreign national willing to buy a house for $500,000 in cash. In an environment where homeowners trying to sell can't find buyers and scores of empty homes dot the landscape, lawmakers are hoping the bill will be a panacea for the depressed housing market.
And since buyers would be purchasing the homes without a mortgage, there would be no possibility of foreclosure.
If the bill becomes law, a foreign national who doesn't want a $500,000 home may also opt to purchase a $250,000 home to serve as a primary residence and then buy additional properties to meet the $500,000 requirement. Canadian senior citizens would also be granted longer visa stays.
Warren Buffet likes the idea. He sees it as a way to solve the excess housing inventory problem "very quickly." Of course, legislators would actually have to get around to passing the bill first.
Any effect on EB-5 visas?
The visa "program" this bill proposes is fundamentally different from the EB-5 visa program in a number of ways.
For one thing, it only grants tourist visas ? not permanent residency. Recipients would only get to stay in the U.S. for 180 days out of the year.
While they could apply for work visas after arriving, Senator Schumer says the country shouldn't pursue a solution that might give immigrants jobs that "otherwise would go to Americans." Nobody on the tourist visa would be eligible for government aid programs either.
But could potential EB-5 investors be attracted to this new visa program instead?
It's certainly possible. After all, it sounds like there would be fewer bureaucratic hurdles to clear. And they'd only be receiving tourist visas, which are fairly routine compared to the EB-5 investor visa.
On the other hand, EB-5 investors often want more than just an overseas vacation home. Most of them want residency so that their children can easily attend college in the U.S. or so they can stay here for as long as they please, coming and going at their leisure.
They may even want to become citizens one day.
A housing solution ? not a jobs solution
The proposed visa legislation is meant to help Americans sell houses. An influx of wealthy individuals would also provide an economic stimulus to areas where there is substantial excess housing.
It is not, however, a job-creation proposal. Foreign nationals who might benefit from the bill aren't exactly immigrants, per se, but rather long-term tourists. The legislation doesn't provide any incentive to invest in businesses that might create jobs for Americans.
In this sense, the pending bill is meant neither to help nor hinder the EB-5 program. It's just a possible pick-me-up for a depressed housing market.
If Congress actually passes the bill, its effect may come sooner rather than later. As Glenn Kelman, a spokesman for the online brokerage Redfin, told NPR last month, "When property values sag and this is a desirable place to live, one of the simplest solutions is just to let more people in so they can buy the homes."
A simple solution, indeed.
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