In the 1970s, Canadian singer Anne Murray popularized a song about "Snowbirds" flying from the north to a land of "gentle breezes." Since then, the term "snowbird" has described retirees from northern climes who spend a large portion of the year in the U.S. Sun Belt. A good number of "snowbirds" hail from Canada.
This week, Sens. Mike Lee, R-Utah, and Charles Schumer, D-N.Y., introduced a bill that would provide much needed refurbishing of our immigration laws. Although there is nothing comprehensive about this bill's short menu of technical fixes to our visa system (most of which are focused on facilitating tourism and high-end business travel) we support this legislation.
But it is clear that the big winners in this legislation, if passed, will be well-heeled Canadian retirees who are looking for real estate bargains in the badly busted real estate markets of the Sun Belt. Hence, our name for the legislation: the snowbird visa bill.
Indeed, an entire section of the bill creates a dedicated Canadian Retiree Visa for Canadians over 50 year of age who own or rent property in the U.S.
And the most creative part of the bill offers residence visas to any foreigner, otherwise qualified through the standard criminal and national security background checks, if they use cash to purchase at least $500,000 of residential real estate. At least $250,000 has to go to the residence (the remainder could be invested in other residential real estate).
This home purchaser visa requires that the foreign national spend at least half the year in the U.S. and pay taxes, but would not allow any work privileges or access to U.S. government benefits. It does not provide a path to citizenship or any privilege in obtaining a work visa. The home purchaser visa would allow spouses and minor children to enter the U.S. on the same conditions as the home purchaser.
So who could realistically take advantage of an arrangement to purchase a home and spend half the year here without working? If past is prologue, then it is Canadians, who, with a pretty decent economy and a strong exchange rate, already account for one quarter of foreign homebuyers in the U.S.
Wealthy Chinese might also take advantage of this opportunity. And the bill seems to contemplate this as well by making it easier for Chinese nationals to qualify for five-year, multiple-entry visitor visa (currently Chinese nationals must apply for a new visa every year).
Of course, the other potential winners are current investors in sagging real estate markets. Although the home purchaser visa is no panacea for clearing our entire housing glut or lifting all underwater mortgages above the surface, it is a spur to demand that is a clear part of the solution.
Foreigners pumped $82 billion into residential real estate markets in the U.S. last year (up from $66 billion in the previous year). Last year foreign buyers accounted for about one in 20 purchasers in markets like Miami and Phoenix. Any boost for this kind of significant foreign investment not only helps prop up these markets, but does so entirely with foreign funds.
Offering smart and abundant pathways to foreign investment in our domestic markets and legal immigration have always been important to America's long-term economic growth. We wish there were political will to provide even bolder solutions. But it is gratifying to see Lee and Schumer reach across the aisle to identify these politically palatable and modest ways to provide for increased tourism, foreign investment and residential immigration.