Passage of Retirement Visa Program for International Buyers Could Create 300,000 New U.S. Jobs

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(MIAMI, FL) -- Jobs. Jobs. Jobs.

We all know the key issue to restoring U.S. housing markets, plus the U.S. economy overall, is job creation.  It's even the centerpiece of President Obama's current agenda with his proposed Jobs Act Bill.

But an interesting idea floating around the leadership, and membership of the Florida Association of Realtors (FAR) since 2009, could now potentially create over 300,000 new jobs across the U.S. in short order.

It is the Retirement Visa Program, now affectionately called the "Silver Card."

The Issue

The current visa system does not allow foreign citizens who own a retirement or vacation home in the United States to use that home on a full-time basis, and/or to enter and exit the U.S. without restriction.

The Florida Realtors Board of Directors supported in August 2009 a retirement visa program and initiated discussions with a coalition of interested groups outside the Realtor organization who will work to advance a federal retirement visa. This program was referred to the Public Policy Committee for further action. Florida Realtors Public Policy team continues to work with NAR's Public Policy team on this "Silver Card" debate.

In addition, Florida Realtors commissioned research on this issue from Florida Tax Watch. The findings of the report were that a retirement visa would revive Florida's economy.  By analyzing the impact of a retirement visa on Florida's economy, the report predicted a total number of jobs cumulatively created or supported by this additional investment in housing could range from 113,000 to 339,000 units.  Additionally the GSP (Gross State Product) will reach a cumulative total of $25 billion, and the contribution to total sales is estimated between $15 and $44.7 billion.

"A large percentage of Florida property sales each year are to international buyers," said 2011 Florida Realtors president Patricia Fitzgerald. "Realtors across the state work with clients from many different countries, who want to invest in Florida real estate or own a home in the Sunshine State. Florida Realtors supports a retirement visa, and continues to have discussions with other interested groups seeking to advance the program on the federal level."

Legislative Outlook

FAR tells the World Property Channel that the outlook for immigration reform is uncertain at this time. As it has long been a contentious topic, little immigration reform legislation has successfully advanced.  While there has been talk of Administrative support for addressing comprehensive immigration reform, the outlook for such an effort is extremely uncertain. The contentiousness of even limited reform proposals (explained more below), coupled with concerns over taking on yet another large contentious issue right on the heels of bruising debates over health reform and climate change, puts comprehensive  reform legislation in doubt.

Historically speaking, the opposition to limited or targeted immigration reform has come both from those who oppose changing the nation's current immigration laws, and those seeking comprehensive change. The concern has been that efforts to address any individual immigration-related issues, including those enjoying widespread support, will diminish momentum in Congress for broader immigration reform. Consequently, these pro-immigration groups have successfully targeted and blocked a number of popular immigration legislative proposals from consideration.

At the request of the NAR Leadership Team, research to evaluate the likely level of demand for a new retirement visa category was conducted by the Harris Interactive Omnibus Survey. Adults in five countries (Canada, Mexico, Great Britain, France and Germany), whose citizens have demonstrated an interest in the U.S. as a second home destination, were surveyed. The responses indicated that while a visa's length of stay limitations did play a role in a small number of cases, concerns with new potential tax burdens played the largest role in foreign citizens' decisions to purchase U.S. properties.  Since existing NAR policy precludes support for more favorable tax treatment for foreign citizens than is accorded to U.S. citizens, this result proved problematic for efforts to overcome this critical barrier for foreign retiree purchases.

The survey results were forwarded to the leadership of the NAR policy committees with jurisdiction over the issues involved, including the Global Business Committee and Alliances, Business Issues Committee, Federal Taxation Committee and the Resorts/Second Home Committee.  Based on the survey results and a review of the Congressional timeline for any possible immigration reform legislation, the committees recommended against pursuing this issue further at this time. The committees did recommend, however, that NAR continue to monitor the broader immigration debate and immediately revisit the issue should actions by the federal government warrant such a reexamination. The committee leadership also recommended that NAR focus on educating NAR members on the already existing business development opportunities vis-à-vis foreign buyers.

The Leadership Team accepted the recommendation of the committees. Consequently, NAR staff continuously monitors Congressional activities in the immigration arena for opportunities to reopen this effort and educate members on the opportunities that exist under current law.

NAR has no formal policy on the retirement visa issue. Past consideration of the issue by NAR's policy committees resulted in competing and divergent policy recommendations.  NAR does have policy supporting the right of foreign nationals to purchase property in the United States and opposing needless barriers to those purchases.

Orlando-based real estate consultant Michael Butler comments on this issue, saying "the very upscale foreigner who chooses to retire in Florida brings huge amounts of good-money with a very high multiplier effect on the local housing economy, probably employing at least 2 people on a full time basis, and many others on an indirect basis."

Butler also perceives the amount of discretionary spending as "a very high multiplier for restaurants, cultural events, recreational activities and retailers," and therefore claims there is no burden on local services such as schools, welfare, Medicaid and unemployment supplements.

According to Butler, "we need more good-money in Florida, not more Federal bad-money spent on rule-making bureaucrats, who have a negative multiplier effect by obstructing and hindering job creation and growth."

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