For Chinese Home Buyers, Seattle Is the New Vancouver

In theory, foreign power with deep pockets can buy up large swaths of important land and establish local governments and population that eventually can tilt national politics and policies in desired way. This becomes more and more easier as elections in lot of developed countries often decided by thin margins from very predictable geographical locations. I am not saying this is happening but at least in theory it's possible to design full on economic attack on any country with such laws. Imagine what kind of havoke a foreign government can create if they buy up all aggreculture land and control food prices in peace times and famines in war times. Or buy up key commercial estates critical to producing energy or real estate for even just simple daily needs like gas stations or grocery stores.

Why would you want to do that? People want to invest in the United States and give us money, we are instead suppossed to spend money and create a blackmarket to prevent them from doing so at a loss?

> People are living on the streets yet there are empty homes available that aren't for sale and artificially propping up home values in the area

Housing prices are high because government spending on public services that increase the attractiveness of a location subsidizes land ownership whenever these services are paid for using taxes other than taxes on land. The solution is not to ban ownership of land but to tax it.

When government spending is not funded by land taxes, it allows landowners to charge higher rent in response to increased government spending on public services, even if they did not inveset in improving the private property located on the site. With a land value tax, landowners are directly charged for the public services which increase their land value. This means that they have to invest in improving their property if they want to increase their profit, such as by increasing the number of available housing units on the site.

Foreign investors may still buy homes and try to lease them, but they will end up funding the government and public services which only benefit the residents which actually live in the US, and they will be unable to pass on this tax burden to renters.

Take this at face value because I'm too busy to look up citations, but it seems the general trend around the world is to make citizenship harder to acquire, not easier, compounding this issue.

* Full disclosure - I am very biased because I am a resident of a country in which I am not a citizen, and I've been really frustrated by not being able to get a mortgage.

http://www.theglobeandmail.com/real-estate/the-market/chines...

Seattle will probably be too slow to react and end up in the same situation, but maybe it will get the attention of other cities/states before it becomes a problem.

No such rules exist for housing that is purchased outright and not financed.

These people don't want an investment, per se. They need to store the money, but also to hide it. If the beneficial ownership of the assets purchased with the money is obscured, they can't be clawed back if they are arrested in China and charged with stealing that money in the first place.

2) There are many native Chinese property managers in these markets (coastal US, Vancouver, Sydney) specializing in supplying info and property management services to mainland Chinese looking to invest/speculate.

3) Expensive is relative. Seattle property is about half the price of property in Beijing or Shanghai (while the average income is about 3 to 4 times as high)

4) As others have noted, stocks are a lot more regulated. And in China they're perceived as much more speculative than property.

People can wait for an investor visa for 5 or more years easily

There is support growing in Vancouver for a surtax based on property value that would be offset by income taxes, and wouldn't apply to those who are retired or on disability [1]. This would be collected from both foreigners who are underreporting their income as well as the idle rich, while also putting additional pressure on those leaving homes vacant to rent.

The idea is to renew the social contract, so that those who are working and contributing to the economy can enjoy the benefits of reasonably affordable housing.

[1] http://www.housingaffordability.org/faqs.html

Why not just apply to it to non-resident aliens (a federal income tax status) rather than to people who aren't US citizens or permanent residents (which is related to nationality/immigration status).

All US citizens are tax resident. All permanent residents are resident aliens. However, by defining things this way, you are excluding people who are living in the US on a temporary work visa (e.g. H-1B, TN, L-1, etc.) and other temporary residents who are, nonetheless, very much resident in the US, in that they spend over 183 days in a year (or more than 4 months per year averaged over 3 years; the rules are kind of complicated) in the US.

To pass a court challenge, the laws as written and the discussions around them have to apply to everyone otherwise it would be too discriminatory (5th amendment equal liberty clause, & 14th amendment equal protection clause). Maybe you could write it as all homebuyers in that jurisdiction being subject to the tax, and then its tiered for certain variables.