Bloomberg reports Peter R. Orszag, vice chairman of global banking at Citigroup and an adjunct senior fellow at the Council on Foreign Relations, says the weak housing market holds down the weak economy, and vice versa. He says the quickest path to economic recovery would be for the government to change immigration laws allowing foreigners to move here and buy homes; and for the government to buy the empty houses and destroy them, neither of which could happen, he concedes. Therefore, he proposes the government offer a tax credit to investors who buy empty real estate and rent them out, and allow them to take the tax credit at the time of purchase providing they retain ownership and rent out the homes. More rental units would mean lower rates and more tenants, and over two years would get rid of at least half of the excess inventory of houses, and cost the government $20 billion. He says the tax break would be related to the number of vacant houses—once a balance resumes, the credit ends. Although noting this policy is not a cure all, Orszag says giving investors immediate depreciation could help stimulate a stagnant economy, and could realistically appeal to Republicans and Democrats.
