Foreclosures in Phoenix may jump because of Arizona’s harsh new anti-immigration law.


Arizona’s harsh new anti-immigration law, SB-1070, has already prompted an “exodus of people — both legal and illegal residents” — from the state. Of more concern, however, is the controversial immigration law’s impact on Arizona’s housing market recovery. Real estate advocates explain that before the housing market crashed, “thousands if not tens of thousands of people who are not legal residents…purchased houses” in Arizona. In Phoenix, AZ, eager lenders “didn’t check documentation” when issuing loans and many people involved in real estate operated on a “don’t ask, don’t tell” policy. Although the law has yet to go into effect, there are worries that the increasing departures will have a negative impact on Arizona’s housing market:

“Estimates are that there are several hundred thousand undocumented aliens residing in Arizona,” said Phoenix housing analyst Mike Orr, publisher of the Cromford Report, a daily housing-research report. “If the law has the intended effect and these people do leave, then both population and demand for housing will probably decline.

Since the state’s employer-sanctions law passed in 2007, [Margie] O’Campo said she’s seen many undocumented homeowners lose homes to foreclosure, either because their lenders won’t work with them or because they can’t sell and want to leave the state. The 2007 law makes it illegal to knowingly hire undocumented workers in the state.

A recent report from the Department of Homeland Security found that “more than 100,000 illegal immigrants left Arizona in 2008, more than any other state. Metro Phoenix foreclosures and apartment vacancies both jumped that year.”

Nina Bhattacharya