Can the new immigration law affect the rental market?
August 31st, 2007 by AptBldgTraderNew immigration rules will force illegal workers to be fired.
Carolyn Lochhead, Chronicle Washington Bureau
Saturday, August 11, 2007
(08-11) 04:00 PDT Washington - — People clamoring for a crackdown on illegal immigration got their wish with the Bush administration’s announcement Friday of sweeping new enforcement measures that will force employers to fire the millions of illegal workers they now employ.
“We strike at that magnet” of jobs, said Homeland Security chief Michael Chertoff, announcing a new rule holding employers liable for workers whose Social Security numbers do not match government records. The new rule takes effect in 30 days.
No state stands to feel the effects more than California, which has more illegal immigrants - an estimated 2.5 million - than any other state. California farmers are expected to be among the hardest hit with their heavy reliance on Mexican field hands, the vast majority of whom are undocumented. But service businesses will be heavily affected too, from hotels and restaurants to cleaning services and nursing homes.
California Sen. Dianne Feinstein predicted a “catastrophe” in the state’s $32 billion agriculture industry as the new rules become effective with the fall harvest. But the proposal met no opposition from House Speaker Nancy Pelosi, D-San Francisco, who issued a statement saying, “Securing our border remains a top priority for the New Direction Congress.”
The rule that will require employers to fire employees unable to clear up problems with their Social Security numbers 90 days after they’ve been notified or face sanctions and a fine of at least $2,200 for a first offense. Up until now, employers have routinely ignored what are called no-match letters.
“In certain industries and in certain states, there will be a very significant impact on the functioning of businesses or entire sectors,” said Deborah Meyers, a senior policy analyst at the Migration Policy Institute, a nonpartisan think tank. “Some employers are going to find themselves having to fire significant portions of their workforces, and I think there will be employees - some who are authorized and some who are not - who will find themselves out of a job.”
The new rules of enforcement
What happened: New rules proposed Friday by the Bush administration will require employers to fire employees unable to clear up problems with their Social Security numbers 90 days after they’ve been notified of such discrepancies in what are called no-match letters.
What it means: Hiring undocumented workers has been illegal for two decades, but until now, employers were not held liable for fraudulent documents. Employers who fail to comply will face fines and sanctions.
What’s next: The new rules take effect in 30 days.
October 3rd, 2007 at 10:12 am
If government agencies truly target employers of undocumented workers as aggressively as they claim, i strongly see this affecting the multi-family market. With an estimated 2.5 million illegal immigrants living in California, how can these numbers not affect us.
These 2.5 million people require housing and each month these individuals contribute “X” amount of dollars toward rent. If suddenly these individuals find themselves out of work and unable to pay rent, a multi-family owner somewhere in California is going to be affected! If you are a landlord of a building in an area where there is a large community of illegal immigrants than the odds are you are REALLY going to be affected.
Our Senator Dianne Feinstein claims that it will be a “catastrophe” to the $32-Billion agriculture industry, yet that is not the only sector in jeopardy! The service sectors will be severly affected too. The list of jobs that will feel the crunch is long: hotels, restaurants, cleaning services, construction, laborers and nursing homes (i’ll stop there).
Addressing Senator Feinstein’s comment about this being a catastrophe to the $32-Billion agriculture industry i would like to paint a picture:
1) Thousands of undocumented workers are fired from their jobs. California farmers find it difficult to replace these workers with DOCUMENTED workers. Suddenly there is a shortage of help to work the fields and pick the crop.
2)Produce becomes rotten from the inability of Farms to process the large quantity, due to a shortage of workers. The law of scarcity takes effect and therefore prices on produce rise.
3) Americans are now forced to allocate a larger amount of funds to food rather than shelter. Thus, lowering the amount of money they are able to allocate for rent and affecting the amount of rent landlords can obtain for their rental unit.
Now we are in a situation where every landowner is affected. The entire rental market is affected! This is a dooms day scenario, yet a serious possiblity if illegal immigrants are suddenly forced out of the workplace and unable to generate an income. 2.5 Million illegal immigrants in the state of California alone, add that number to the number of illegal immigrants living in the other 50 states. I agree with our Senator Dianne Feinstein, this could possibly be a catastrophe.
Only time will tell if the government is truly ready to approach this situation with the determination and manpower that will be required to pursue this new law. If it is ready, it’s said that we could possibly feel the affects within six months.
What are your views on this? Please share your thoughts and comments. We are eager to hear what you have to say!