A government proposal to establish greater control over non-immigrant aliens who visit the United States for pleasure has drawn fire from real estate interests.

The Immigration and Naturalization Service's plan to limit the stay of foreign visitors could prove "devastating" to real estate markets, especially those with high concentrations of foreign ownership, according to the National Association of Realtors.

The nation's realty professionals are all for efforts to protect the national security, said NAR President Martin Edwards. But ownership of vacation and retirement homes would be "far less attractive" to foreign buyers under the proposed changes.

Under rules which were designed to eliminate paperwork and have been in effect for years, aliens with B-2 visitors visas can remain in the country for up to six months, and can ask to extend their stays another six months before they must leave.

But in light of the Sept. 11 terrorist attacks, INS Commissioner James Zigler now says it is necessary to better manage the alien population in America by cutting the maximum admission period to 180 days.

Under the proposed change, instead of an automatic six-month admission, B-2 visitors would be granted a period of admission that reflects the stated purpose of the trip.

Because most non-immigrants do not have a stated need to remain longer than 30 days, the INS says in its proposed rule, it is reasonable to expect that most will depart within that time. If there is any ambiguity whether a longer or shorter stay is fair and reasonable, a visitor could be allowed an extension for up to a total of 180 days. But the original determination or the decision to grant an extension won't be made until the visitor is about to enter the country.

The plan "will lessen the possibility that an alien visitor will establish permanent ties in the United States and remain in the country illegally," the agency says in its proposed rule.

The INS has yet to make a final decision on the rule changes, but in its proposal, it says the changes are "reasonable" and will help maintain control of the alien population within the country.

"As the attacks of Sept. 11 demonstrated," the agency said, the generous visitation rights now allowed non-immigrants are "susceptible to abuse by aliens who seek to plan and execute acts of terrorism."

The INS also points out that anyone who can demonstrate a legitimate need to remain in the country for longer than initially allowed can apply for an extension.

But the 800,000-member NAR, the nation's largest trade association, believes the proposal could introduce so much uncertainty that it could have a negative impact on real estate markets where foreigners own a large share of houses and apartments.

"We are very concerned" that the proposed rule "could be devastating to our economy," Edwards said.

No one tracks foreign ownership of U.S. real estate. But it is believed the heaviest concentrations are in Florida, California, Texas, Colorado, and New York, and in such international cities as Chicago, Washington, San Francisco and New York.

Foreigners purchase vacation, retirement and investment homes in America knowing they can visit for at least six months to a year under today's rules, Edwards said in a comment letter to the INS. But the proposal "removes this certainty and replaces it with a moving target."

The new process is "not only unworkable," the Memphis, Tenn., broker wrote, "but it places these foreign owners and visitors in jeopardy of not knowing for certain how long they will be permitted to visit their properties."

"This proposal will remove any incentive for a foreigner to purchase or to rent property in the United States," he said.

Nancy Klock Corey said agents in the Miami Coldwell Banker office she manages have already lost two deals because of concerns regarding visas. She also reported that other potential purchasers "are not showing any interest in buying right now" because of the uncertainty.

Christopher Zoller of Essinger Wooten Maxwell in Coral Gables, Fla., said he's already feeling the impact, too. In a letter to Sen. Bob Graham, D-Fla., protesting the INS proposal, he said he has "clients from Europe and South America (who} are no longer interested in purchasing a vacation home in Miami" because they are worried about their visitors' status.

Noting that many would-be buyers "are beginning to feel less welcome" in the U.S., Zoller said he anticipates losing perhaps as much as $3 million in sales this year alone because of the proposed rule.

"We have to strike a balance between protecting ourselves and hurting ourselves economically," said Corey, who estimates that foreigners account for 20-25 percent of all real estate activity in South Florida.

The concern, though, is not just that aliens will no longer purchase or rent houses in their favorites places. It's also that they will dump what they already own rather than put up with immigration hassles.

"Many foreign property owners have already expressed concern to their real estate professionals about the future use of their property," Martin said. "Many have threatened to sell and go elsewhere."

At Coronado Shores, a 1,465-unit condominium property in San Diego which has "a little bit of everything" in the way of foreign owners, including about 200 from Mexico, Vice President of Sales Ara Koubeserian said he hasn't seen any fall off yet in resales because of the INS proposal. But it "could have a big impact," he warned.

To bolster their concerns, the Florida Association of Realtors is trying to determine how many vacation and retirement properties are owned by foreigners.

So far, they've discovered a study commissioned by the Lee County Port Authority based on tax records for the year 2000 that found 8,300 home owners in Collier, Lee and Charlotte Counties in Southwest Florida have their property tax assessments mailed to their permanent residences in Germany.

The German Economic Impact Study also found that German owners visited the area 2.5 times a year and rented their properties to other German tourists several times a year.

In addition, the Florida Association of Property Appraisers, at FAR's request, found that assessments on 19,400 of Lee County's 449,000 properties went to foreign addresses. In Broward County, 11,950 of the 662,000 tax bills were mailed overseas. And in Palm Beach County, 7,350 of the 537,500 notices were sent to foreign addresses.

But Howard Adams, FAR's chief lobbyist, said that these ownership figures are minimums at best. Many more foreign owners receive their tax bills via a U.S. mailing address or a post office "drop box," or use a foreign agent registered in this country for correspondence or tax purposes, he pointed out.

In Dade County, for example, just 2,000 of the 704,000 tax bills mailed last year went to foreign addresses. "That has to be extremely low," said Adams. "You know good and well that there are many more foreign owners in Miami than that."

Published: October 23, 2002

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.