Ease the Housing Crisis on a Nickel and Build a Lasting American Advantage: Increase H1-B Visas
Many politicians are making good-willed attempts to fix the housing crisis through restructuring mortgages. Unfortunately, all grand attempts to refinance homes into payments that are more reasonable have failed. Foreclosure rates are still extremely high and lending has not resumed, in part, because there are simply not enough qualified applicants to buy the millions of homes that are sitting on the market. 1 in 10 homes in America
are behind on payments or in foreclosure. This has resulted in a situation where over 2 million homes are vacant and millions of homeowners want to sell their homes but can’t. Because sub-prime mortgages are no longer available, the demand for housing has fundamentally contracted.
While possibly helpful in the short term, a simple government stimulus will not stop the bleeding in America’s housing market. Only a fundamental change in the structure and expectations in the housing market can do that. For that, we would need a new generation of US homebuyers to come into existence over the next 12 months. There is only one source of this much needed demand: college educated H-1B skilled worker applicants
I propose that we dramatically increase the number of H-1B skilled worker visas we issue and add a new requirement to these newly available H-1B visas: the recipient must buy either a foreclosed home or a home in a ‘distressed’ (having lost more than 15% of its peak value) housing market. Any purchase of this sort would have to involve a 20% cash down payment to avoid getting people into homes they can’t afford. There are literally millions of people that would jump at the chance to come and experience the American dream. The introduction of this demand into US markets would change the direction of the housing market and allow people who are close to foreclosure to sell their home with dignity rather than destroy their credit and go into foreclosure.
One final advantage to this program is that, unlike the $875,000,000,000 stimulus Congress is considering, this policy costs an extremely small amount. The processing of the visa is paid for by the price of the visa application. The only cost would be the transition costs associated with hiring some new workers for the immigration office before the increase in applicants happens. Beyond that, the addition of immigrants to struggling areas will boost tax revenue dramatically because skilled and legal immigrants will have to pay property, income, and sales taxes.
This is a significant proposal and there are reasonable objections to it. I will briefly deal with the major objections below:
This Will Take American Jobs Away
To protect the American worker in this time of economic hardship, any job given to the recipient of a H-1B visa would have had to have been advertised for at least 90 days prior to giving the job to the immigrant. Failure to post a meaningful public advertisement of these positions for 90 days would result in a $25,000 fine per position, per month that the advertising was insufficient. This would act as a clear incentive for companies to only hire immigrants for positions Americans truly can’t fill.
The Nature of America Will Change
Many people worry that this policy will change the face of America. That also won’t happen because the introduction of 2 million new households of immigrants from around the world would amount to less than 2% of the general US population.
There Aren’t Enough Skilled Immigrants To Bridge The Gap
The number of H-1B skilled worker visas that are currently issued is pitifully small. Last year, over 120,000 applications were received in the first two days
for a mere 65,000 spots
. A different cap for visas for people with Masters Degrees was also reached last year
. In short, the demand for US visas is extremely high.
Additionally, many other countries are suffering right now and there is an increased desire to go to the most stable countries in the world and that includes the US. Beyond that, we only need 1-2 million households to immigrate to fundamentally change the dynamic of decline and despair to hope and optimism in the hardest hit housing markets in America.
There Aren’t Enough Jobs to Allow Enough People To Come
Many tech companies have complained for years that they can’t get enough H-1B visa workers. This limited time opportunity will lead companies that want skilled workers to make every effort possible to make a position for these people. Due to the fact that they will have to advertise these jobs publicly for 90 days, many unemployed workers in the US will have a chance to apply for these new positions and get their lives back on track. Additionally, when skilled laborers join a community, they often create other jobs around them. This can be everything from a new managerial position all the way down to a new secretary.
The US Immigration Office Is Ill-Equipped To Deal With A Massive Increase Of Applicants
The federal government is already in the process of creating a variety of public works projects that would require the hiring of a number of temporary workers. There is no reason immigration processing offices could not be part of this process. Additionally, the 90 day public advertisement period for businesses will give US immigration offices the time that they need to ramp up their operations before a huge number of applicants flood their office.
This Does Nothing To Deal With Illegal Immigration
Ending illegal immigration is an economic and national security priority of the highest level. There are many good policies to reduce illegal immigration. This proposal has nothing to do with that topic. Refusing to make progress on the housing crisis because the problem of illegal immigration hasn’t been solved will only worsen our economic crisis and jeopardize the chance of a real recovery.
This Is Unfair To Those Seeking L1B Visas
If the increase in H-1B skilled worker visas is approved, there would be little reason not to apply the same restrictions to an increase in L1B skilled worker visas. This plan is already ambitious and making too many changes may jeopardize its viability. The number of people who desire H-1B visa applications is high enough to help solve our housing crisis and for that reason I advocate changing H-1B rules before any others are changes are made.
The New Skilled Immigrants Will Just Buy A House And Then Sell It Just To Get The Visa
This is a legitimate complaint that warrants an important addition to the policy. People who buy these homes must retain ownership of them for at least 3 years. Three years is the most pessimistic estimate of when the housing crisis will end. At that time, the housing crisis will probably have passed and the housing trade can resume as usual.
This Is A Classic Washington Short Term Fix With No Long Term Benefits
The expertise that H1-B visa skilled workers bring to America in math and science is critical for our long term success. The inability to bring these people over has stopped projects in America dead in their tracks and negatively impact business in America for years
. This problem is ridiculous and needs to stop.
Beyond that, this is a unique opportunity for America to gain access to the most skilled workers from around the world. We will probably never see a crisis this severe again in our lifetimes. Why not use the uncertainty in the world to draw the best minds from around the world into America to gain an important structural advantage in the economic competition that will resume after this crisis?