The International Real Estate Institute in Brussels recently estimated that foreigners invested $1 billion in U.S. property last year. The European Investment Research Center in the same city put the figure at $800 million.
The Commerce Department counted $173 million worth of completed real estate deals in the first half of 1977 but admits this figure is far too low. Still listed as pending, for example, is the $350 million purchase last spring of nine Manhattan skyscrapers by a Canadian firm.
The fact is no one really knows.This was emphasized repeatedly at a Senate Commerce subcommittee hearing last week on a bill to fund state programs to monitor foreign direct investment in real estate and to establish a federal clearinghouse for the information.
At present the U.S. government depends primarily on the media for its data. The states make little attempt at collecting property records and virtually none at identifying the true buyers behind dummy corporations, witnesses said.
The estimates quoted above include all types of property. However, farm land was particular focus of the hearing held by the Commerce subcommittee on science, technology and space. Urban buildings can be replaced, but the earth of America is a finite resource, Sen. Daniel K. Inouye (D-Hawaii) noted.
Nearly two years ago Congress ordered a study of the feasibility of a land sales monitoring system, but it has not yet been carried out. The General Accounting Office is scheduled to issue a report in May on alien ownership of a agricultural lands.
Only one state, Iowa, currently monitors purchases by foreigners. The Iowa legislature has recently proposed to limit such sales 1/10th of 1 percent of the total agricultural land, according to Neil E. Harl, the Iowa State University economics professor who has devised the system in that state.
Mounting concern over the possibility of losing acreage to aliens has led Missouri, Georgia, Oregon, Washington, Pennsylvania, Indiana and Illinois to consider similar legislation during the past year. Reuben L. Johnson of the National Farmers Union testified that 20 states now have restrictions on alien ownership of land. (Maryland and Virginia's restrictions are listed as minor.)
"We think it is intolerable to continue a situation in which neither government agencies nor the general public have access to the truth about alien and corporate ownership and operation of farms," Johnson said. Last month the National Farmers Union resolved at its annual convention that "foreign interests (except families or individuals seeking U.S. citizenship) be prohibited from acquiring agricultural lands."
Johnson argued that the 9 percent average increase in farm land between Februayr 1977 and Febraury 1978 was due in considerable measure to foreigners bidding prices up. He was challenged by Harl, USDA officials and by the real estate industry.
Brig. Gen. William A. Stiles, USMC (Ret.) of Oppenheimer Industries, Inc., one of the principal U.S. firms selling farmsland to foreigners, downplayed the extent of foreign ownership, saying it based more on rumor than fact.
His estimate was "substantially less than one percent." He testified that his company has sold only $60 million worth of land during the past three years. He added that the firm now has "orders" for 50 separate real estate packages, worth some $100 million. These range from irrigated land to ranches to farms to vineyards with wineries.
Those nationalities most interested in farms and ranches are French, German, Argentine, and Italian, he said. To a lesser degree, Belgian, Dutch, Swiss, Hong Kong Chinese, Iranian, South African and Rhodesian buyers have also come into the market.
Japanese and Arab purchases of farm land are very limited, he said. Emphasizing that foreign ownership in this country was preferable to exporting goods abroad, Stiles warned that any legisltion aimed at revealing the true identity of foreign investors would seriously damage that influx of capital.