Last week witnessed the filing of an immigration bill that could simultaneously overhaul immigration and the housing sector. The bill, supported by several bi-partisan Senators, would successfully pave the way for approximately 11 million undocumented immigrants to gain legal residency within our country’s boarders. Announced in 2011, the bill offers a bipartisan proposal to boost demand for homes by luring foreign investors to purchase residences and live within the confines of the U.S. as a legal citizen.
Introduced by Senators Charles Schumer and Mike Lee, this bill, respectively known as the Schumer-Lee Bill, proposes to grant residency to a majority of the undocumented immigrants who arrived in the United States prior to December 31, 2011. Under the parameters of the Schumer-Lee Bill, immigrants in question would be required to wait a total of 13 years from the moment they were legally recognized to being able to live in the U.S. as a citizen.
Successful passage of the Schumer-Lee Bill will undoubtedly have overwhelming ramifications on the housing sector as a whole. According to Schumer, “this concept has the potential to lift demand for the nation’s excess in homes.” Statistics issued by the National Association of Realtors (NAR) in 2007 acknowledge that minorities and immigrants made up 35 percent and 19 percent, respectively, of the first-time buyer market. A continuation of current trends will result in an influx of foreign investors, particularly those from China and Canada, who may serve to stimulate the housing sector and our economy.
Approval of the recently proposed bill will serve to facilitate an increased demand for housing and subsequent mortgage applications. “Immigrants are an important and growing source of demand that has bolstered housing markets in recent decades,” said Professor Dowell Myers of the Population Dynamics Research Group at the University of Southern California (USC).
According to a study conducted by students at USC, titled Assimilation Tomorrow, immigrants of the 90’s demonstrated an increased propensity for assimilation. The percentage of immigrants who own, rather than rent, is projected to rise to 72 percent by 2030.
The Schumer-Lee Bill plans to take advantage of foreign-born investors with enticing citizenship incentives. If passed, it would grant a residency visa to anyone who spends $500,000 or more on a home in the United States. The parameters of the bill would require that at least $250,000 of the initial quota must be spent on the primary residence of the prospective visa holder. The buyer will also be required to live in the home for at least 180 days, all while paying taxes to the U.S. government.
“As a city, it could create a more fluid market in the sense that you now have people that are no longer off the grid, and that applies to credit, obtaining financing, paying taxes, things like that,” said Jonathan Miller, president and CEO of Miller Samuel Inc., a real estate appraisal and consulting firm.
“Bottom line, the shadow economy moves to the grid, and that comes in the form of credit and revenue for the city in terms of taxes. I think the way it’s going, we hope it has a positive impact.”
The recent filing of the Schumer-Lee Bill represents the most significant attempt at immigration reform for this generation. Passage of the bill, which may take several more years, has the potential to boost our financial standing through increased foreign investment and tourism.