Arizona Immigration Law Could Increase Foreclosures

| Tue Jun. 15, 2010 9:55 AM EDT

The boycotts were just the beginning. Arizona’s harsh immigration law—set to go into effect on July 29—could have a far-reaching impact on the state’s economy. Economists and real estate analysts in the state are now predicting that the law could end up hurting the already battered housing market in areas like Phoenix, where foreclosures hit a record high in March. From The Arizona Republic:

An exodus of people—both legal and illegal residents—could be one more drag on a housing-market recovery. Departures from a state where growth is the economic foundation could add to the number of foreclosures and vacant houses and apartments, all of which will hurt the housing industry just as signs of recovery are starting to appear.

Driving illegal immigrants out of Arizona is one stated purpose of the new immigration law. But the law, experts say, could also drive out legal residents and deter potential new residents - people who are afraid of what might happen to them or who simply object to the law.

There's a misconception among some Arizona residents that illegal immigrants don't own homes in the state. Housing advocates say thousands if not tens of thousands of people who are not legal residents have purchased houses here…

"The immigration law just piles onto our problems," said Brett Barry, a Phoenix real-estate agent with HomeSmart. "We are already struggling to find the jobs and keep the schools open to entice new residents."


And there are reports that the exodus has begun: Arizona school officials say that illegal immigrant families with school-age children are already fleeing the state. Given the climate of fear and uncertainty surrounding the new law, it’s not surprising that both legal and illegal residents are leaving for fear of being persecuted and treated like second-class citizens. And it's the state's recession-hammered economy that could bear the brunt of their departure.

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