Strict Immigration Laws And Their Impact On Local Real Estate Values

While an increasing number of American citizens have been pushing for stricter immigration laws — one county has found that cutting back on immigration can have unintended consequences. …

While an increasing number of American citizens have been pushing for stricter immigration laws — one county has found that cutting back on immigration can have unintended consequences. Prince William County, Virginia has seen real estate prices collapse recently, and a large part of the falling values has been the result of new stricter immigration laws and a loss of immigrant residents. For more information, read the following article from JD Supra by immigration attorney Jerry Erickson.

Have you noticed that Prince William’s immigrants, both illegal and legal, are leaving the county? In 2007, Prince William’s foreign-born population dropped 6 percent while neighboring Fairfax County increased its immigrant population by 7 percent, according to the U.S. Census Bureau’s American Community Survey 2007. Although a trip down Smoketown Road during rush hour might lead you to believe that the county is as overpopulated as ever, the drop in the noncitizen population is real and will likely continue.

What is the difference between the counties? Anti-illegal immigration legislation. Prince William has it, Fairfax doesn’t, and as of December 1, 2008, Manassas decided to follow in the steps of Prince William by requiring the police department to check the immigration status of all persons arrested for a violation of state or local law. 

There are costs and benefits of having one of the fastest growing immigrant populations in the country — and plenty of folks on both sides of the debate. The people of Manassas have watched the progression of the Prince William anti-illegal measures as concerned next-door neighbors. Its citizens have decided that they are willing to take the good with the bad. 

Proponents of the legislation tout the reduction in the number of overcrowded area homes. They are happy to see the demise of many “boarding house” style living arrangements. Proponents also cite the availability to citizens and legal immigrants of now-vacated jobs that had once been filled with illegal immigrants. Job creation, through whatever means, appeals to a wide audience in the current recessive market.

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Those opposed to the current attempts by Prince William and Manassas to curtail illegal immigration maintain that such measures negatively impact the local economy and cultural diversity.  In particular, opponents complain that anti-illegal immigrant measures have accelerated the collapse of the real estate market in the community. Opposition groups, like a Prince William stay-at-home moms group, which was recently chronicled in the Jan. 2 edition of the Washington Post, also condemn the anti-illegal immigrant measures because they believe that the measures create a climate of fear and racism that drive legal immigrants from the area.

Partisans on both sides must agree that the effect of the crackdown has been visible. As you drive through the area, it is not unusual to see vacant houses. Businesses have fewer immigrant customers and schools have lost students. Since Hispanics make up the largest percentage of the county’s immigrant population, their community has been the most affected.

To be sure, home foreclosures and a declining economy are felt by citizens and non-citizens alike. It’s difficult to distinguish the more general effects of the recessional economy from the effects of the county and City of Manassas measures on the immigrant population. Certainly you cannot determine one’s immigration status by a surname, but it is still impossible not to notice that the classified section of area newspapers lists property foreclosures in which a large proportion of the owners have ethnic names. On the anti-BVBL blog, operated by the Prince William stay-at-home moms group, a commenter who identified himself as a title examiner for one of Northern Virginia’s busiest title companies quoted that 90 percent of the county home foreclosures in 2007 and 65 percent of the county home foreclosures in 2008 were of houses owned by people with Hispanic names. Even national news sources are taking notice of the Hispanic home foreclosure phenomenon in Prince William County. The Wall Street Journal just published an article on the county’s Hispanic home foreclosures on Jan. 5.

Who is benefitting from this recent reversal of fortune? Citizens, legal immigrants and especially investors looking for good deals are able to snap up the newly bank-repossessed homes at staggering bargains. After an initial slowdown in home sales in 2007, buyers began to reappear. Total homes sales in Prince William County are up 200 percent. That should be great news for everyone, but here is the kicker, the median sale price has plunged 41 percent in the past year, from $405,000 to $239,000.

This local housing fire sale affects all of us. According to real estate agents who specialize in foreclosed properties, investors have led much of the buying spree. This means more rentals in your neighborhood. You may expect that your taxes should go down with the decrease in your home’s assessed value. However, don’t get that giant flat- screen television just yet. The reality is that Prince William is looking for a way to increase taxes in 2009 to make up for the budget shortfall caused by the falling home prices.

Like Prince William, Manassas citizens will soon feel the impact of a tougher anti-illegal immigration stance on their wallets and on their housing market. It remains to be seen whether these growing pains will ultimately be healthy for the county and our community in the long run. If it turns out that they’re not, we can only blame ourselves.

This article was oiginally posted on JD Supra.


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