This was a suggestion made in an op-ed in the WSJ by Richard Lefrak and Gary Shilling. According to the authors
The federal bailout forces taxpayers to subsidize overextended homeowners who bet on ever-rising house prices and used their abodes as ATMs, and it doesn't get to the basic problem -- the huge inventory of excess houses. We estimate that 2.4 million houses over and above normal working inventories are left over from the 1996-2005 housing bubble. That's a lot, considering the long-term average annual construction of 1.5 million single- and multi-family units.
Excess inventory is the mortal enemy of house prices, which have already fallen 27% since the peak in early 2006. We predict another 14% drop through the end of 2010 if nothing is done to eliminate the surplus.
Doing nothing to eliminate the excess inventory might well push the recession through 2010 and into a depression. Declining home values, for example, are eliminating the home equity that has funded oversized consumer spending for years
There are nearly half-a-million skilled individuals waiting for permanent residency applied through the H1-B route. These people are not going to go anywhere since they are stuck in a limbo that lasts for years. The priority date for a skilled individual who applied for his permanent residency (through EB-2 category -- with a degree above a baccalaureate degree or a baccalaureate degree and at least 5 years progressive experience in the professions) is stuck at February 2004. While there may be some truth to the fact that H1-B employees cause wage depression (I am not sure by how much) particularly in IT sector (I am not so sure about other Science and Engineering fields), the fact is that they still make more money than the median/average income in all most all the states. So instead of letting millions of houses decay into oblivion and pumping billions of dollars into buying toxic assets contaminated by the sub-prime virus (as if they are going to be worth anything in the future), why not give immediate permanent residency to all the individuals and families (men, women and children) who are stuck in the hellhole, provided that they buy a house within a specified time frame, investing a certain amount? This would mean that the the precipitous fall of housing prices will cease; money will flow into the local economies and communities giving jobs to millions of people who would work on renovating and restoring the houses; since such skilled employees have superior credit scores, banks would feel comfortable lending money for housing sector again and thus increase the credit flow all around.
Now, I understand that the current crisis that we are undergoing is much bigger than the housing sector and is pervading all aspects of our economy. But I believe that this is much better than just throwing money into a black hole which is what is currently being done. If you accuse this plan as a naked attempt to help give permanent residency to people who entered this country in a LEGAL manner but are stuck in a bureaucratic maze and at the same time jump start the housing economy, then I plead guilty as such!
DISCLAIMER: I entered this country on a student visa but am a permanent resident now.