Placeholder for discussing the impending EO on H1B.
Things we need to know:
Criteria for choosing H1Bs
Response by industry (more outsourcing? employed more Americans? more partnership?)
Reduced quota means reduced demand, not good for RE short and long term.
Higher pay for H1Bs mean higher affordability which mean short term price appreciation and rent but may induce industry to move operation to elsewhere such as Austin, and overseas (China, India and Mexico) which might mean long term story of SFBA is not as rosy… start of a secular decline?
So we need to be clear about the details of the EO and assess how the hi-tech industry might respond.
This is indirect way of removing H1B or discouraging H1B to USA ! All Tech companies will hire mid-east or middle americans !
This is what the purpose of H1B and knowing all these 97 tech companies are against Trump on immigration ban. Immigration ban is just a show of resistance while real issue for Tech companies is H1B changes and import VAT tax policy (They can not hire in India or China as this is considered like import)
You’re assuming this would be implementing in parallel… we need to anticipate this too… if don’t have this your view that companies would hire from Mid-East or Middle Americans don’t hold water. And with this import adjustment EO, depending how it is implemented… if ill conceived would end up with hyperinflation… so we need to dissect the EOs when they come up… but can discuss the possibility now so we know what to do when announced. Really hope these EOs won’t be as confusing as the 7-nations visas ban… the import adjustment EO can be very confusing if don’t word properly.
It is not exactly 7- country ban is an issue to Tech Companies. If Trump is banning like this, he and Republicans may sign the 130k pay+benefits H1B bill which will put entire Tech industry into heavy losses.
Tech companies won’t allow H1B bill to be passed. 7-country ban resistance is a preliminary resistance to connect all concerned companies to unite.
“Immigrants are leading entrepreneurs,” Sunday’s brief reads. “Some of these businesses are large. Immigrants or their children founded more than 200 of the companies on the Fortune 500 list … Collectively, these companies generate annual revenue of $4.2 trillion, and employ millions of Americans.”
I doubt it.
They will most likely outsource by moving R&D to India and China in spite of Tax.
I recently read one of thread at college board regarding Sumac (competitive math camp at Stanford). I was quite shocked to see most of admitted kids were from India (not from here either).
Even SV kids are behind Asian kids when it comes to STEM.
Tech companies either move R&D to India or China or lose the battle against Asian companies.
Yes, there are plenty of such people working above 130k after one year of experience !
Did you hire experienced US H1Bs or starter from China or India? If you are hiring locally, it means you hire well trained or well experienced H1Bs. This is H1B transfer, we are not talking about H1B transfer.
We used to get Green card less than 3 years, nowadays it is getting delayed 8 to 12 years range. There are lot of experienced H1Bs at USA.
What we are talking is direct hire from India or China. I have never seen any one paying more than 80k+benefits to hire from overseas.
80k salary can buy condos and townhouses, and lower end sfh. In a normal market there are typically lots of move up buyers. These buyers need to sell their existing entry level homes before they have the money to upgrade to bigger homes. Hurting the lowest level food chain will harm the entire ecosystem.
You have to count husband and wife, as a family income.
With 80k - 100k pay each,Husband and wife working, many purchased Condos and Town homes.
I know at least 3 of my people got it during the last two years.
If Trumps stalls H1B or reduces or policy change, no one from H1B (either 100k or 1M) will buy a home. It is hard and heavy loss for them.
One ripple effect of the Trump administration’s policies might be a downturn in the Bay Area’s housing market. Karen Yang, a real estate agent with Fling Yang & Associates, says that if H-1B visa holders (a type of visa that allows US companies to bring in foreign professionals with specialized skills) disappear from the marketplace, a sudden lack of competition could drive down the price of a single-family home in the city
In the hypothetical situation that an immigrant worker gets their H-1B visa revoked shortly after buying a house, they would have to pay between 6% and 7% of the home value in closing costs and transfer tax, a one-time fee imposed on the owner when a property changes hands.
This is what keeps me awake at night. Have always thought the only way to bring down hi-tech firms/ SV is blocking immigrants from coming in… which of course translate to secular decline of prices of SFHs… the premise of buy n hold and keep buying regardless of market conditions no longer hold true… Trump’s H1B EO is beginning to feel like bird flu hitting Singapore… lead to a decade long decline of RE prices.
I think we need to differentiate between the Muslim Ban EO, which we have seen and now tied up in court, versus the H1B EO which we haven’t seen yet. The Muslim Ban EO creates a lot of anxiety and uncertainty that’s already hurting our market. A lot of it is fear. So even though India and China are not in the ban people are delaying home purchases because of the uncertainty.
About H1B we don’t really know anything yet. Also I think drastically changing it requires Congress to pass bills. There are already a lot of doubts how Trumps’ earlier EO’s translate into policies. A lot of them are just shows to make him look good on TV. Policy-wise very little has come thru. President’s power is very limited without Congress’ cooperation. So assuming Congress has to pass bills we are looking at 2018 at the earliest. The top two agenda: repealing Obamacare and tax reform are much slower than expected. Governing turns out to be much harder than complaining. Who knew?
Now if my 2018 estimate is correct, people will be freaking out about midterm elections, and the fight over Obamacare and Tax Reform will likely spill over. It will be a year of non-action. So H1B reforms may not even come at all.
In the meantime the uncertainty will keep hurting our housing market. So 1-2 year prospect is pretty grim.
Not sure on the conclusion. There might be short term pauses, but I doubt it will be grim as long as the rest of the economy keeps chugging along. We will have to wait and see.
Anecdotally, big issue in Bay area seems to be affordability.
Wife tells me ,couple of her colleagues (one from Israel & another from Turkey, one with US citizen wife & in both cases both husband & wife working & have at a minimum Green Card) say that they can’t afford houses in Bay Area & for their first home purchase they also don’t want to buy anywhere further away than Sunnyvale.
Was not sure if I wanted to laugh or cry when I heard that
Given a choice, do White Americans prefer AUSTIN/Seattle over Bay Area? If yes, BA will down if H1b is reduced. But is there any talk to reduce H1b?
Asians are willing to tolerate the high housing cost in BA mainly due to cultural reasons, not weather. Many Asians would love to live in Austin, but the small Asian population in Austin is a major obstacle for them, especially new immigrant Asains
This kind of rhetorics will freak out people more. Nobody wants to be a legal scholar and goes into the weeds to see if any of this stuff affects them. All they hear is that immigration will be cut. In half! I don’t think Congress has the political capital to take on immigration reform any time soon. In the meantime this kind of fear mongering and uncertainty will hurt us bigly.