Here’s an interesting idea by Richard LeFrak (of LeFrak Org, builder of LeFrak City in Queens) and Gary Shilling, an investment advisor, in a WSJ op-ed 3/17/09. The authors present the problem of the huge inventory of excess houses, estimating the total at 2.4 million, and offer a solution.
“Offer permanent resident status to the many foreigners who are clamoring to get into the U.S. – if they buy houses of minimal values (not shacks). They wouldn’t need to live in those houses, but in order to remove the unit from the total housing market, they couldn’t rent them. Their temporary resident status grant upon purchase would become permanent after, perhaps, five years, if they still owned the houses and maintained clean records.”
A good idea but I see several problems. What kind of background check will these foreigners be subject to? This situation would be ideal for drug dealers in foreign countries who want to set up shop in the U.S., where the demand for their goods is strong. Who will monitor whether the new owners will rent the house? It could cause a “land rush” as the demand for those 2.4 million surplus houses would be strong, possibly stronger than the supply, thus causing another housing bubble.
The authors continue: “The blueprint for a program to sell surplus housing to immigrants is already in place with the EB-5 visa program. Each year, 10,000 EB-5 visas are available for foreigners who each invest $1 million in a new enterprise ($500,000 in economically depressed area) that creates at least 10 full-time jobs. After two years, the entrepreneur and his family can become permanent residents.”
This is free market citizenship at its best.