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Apartment Owners Caught Sleeping?

Written by Clifford A. Hockley on Monday, 31 March 2008 7:00 pm
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In February of 2008, the Oregon Legislature overwhelmingly passed SB1080, a bill that prevents illegal immigrants from obtaining an Oregon driver's license. The Governor signed the bill into law on the 19th of February. This bill was passed to prevent driver's license fraud, as well as to comply with the first steps necessary for homeland security regulations.

Summary of SB 1080

This bill is a follow up to Governor Kulongoski's Executive Order #07-22 regarding the denial of driver's licenses for illegal immigrants. CAUSA, an Oregon immigrant's rights coalition, estimates that there are upwards of 120,000 undocumented workers in Oregon (we have seen estimates of up to 170,000).

Basically this bill requires that prior to issuing, renewing or replacing a driver's license, driving permit or identification card, that Oregon's Driver and Motor Vehicles Services Division must ask license seekers for proof of U.S. citizenship or permanent legal status. Specifically this bill requires a verifiable Social Security number and proof of identity and an Oregon address to get a license, something the DMV has been doing since Feb. 4, 2008.

This new law also calls for verification of an applicant's immigration status.

But that provision will not take effect until January 2009, giving the DMV time to put in place a system that connects to the U.S. Citizenship and Immigration Services' Systematic Alien Verification for Entitlement (SAVE) program.

Until then, those who are not permanent legal residents, but who hold an Oregon driver's license, will be able to drive until their license expires. Those who obtained licenses issued before 2004 received a license with a life span of four years, effective January 2004 driver's licenses are issued for a period of eight years. We estimate that most of the existing licenses will expire in 2011 and 2014.

In addition, this bill calls for an increase in fees to fund this program as well as the creation of an office of Ombudsman who can help legal Oregonians sort through this process.

How Does this Impact Landlords?

Bear in mind that the vast majority of the illegal immigrants in this country are renters. It is impossible for illegal immigrants to get records to prove citizenship. The driver's licenses that they had gave them the ability to work or drive and rent.

For sake of discussion, let's assume that the average immigrant family has four members; that means using the conservative CAUSA number of 120,000 immigrants, we might have 30,000 rentals in jeopardy as a result of this legislation. Statistically speaking there were about 3,745,455 inhabitants in Oregon in July of 2007 (prepared by the population Research Center, Portland State University Dec, 15, 2007. PSU website) About 1,348,363 Oregonians live in rentals. This is 36 percent of the people that live in the state so we conclude that about 9% of these plus or minus are undocumented workers. This is a very rough approximation.

There are towns in Oregon where a large proportion of the town might be immigrants, of which a proportion are undocumented (this could be Hispanic, Russian, Rumanian, Chinese, or even Korean immigrants for example). We manage properties where over 50 percent of the tenants are undocumented.

This creates a situation where undocumented aliens cannot buy a car to get to work, and as a result they may not be able to find work in the gray economy. The rental of apartments now gets more difficult.

As a result of these changes there is no prior address to look up and confirm against other records. Undocumented immigrants will "bunk" with legal immigrants and make it very difficult to get previous landlord references. This makes credit checking even more difficult and the risks to landlords increase. Criminal checks will go from being difficult to being nearly to impossible.

Where Will Undocumented Workers Go?

This legislation might encourage some of these undocumented workers to go home or to other states rather than fight this issue. For example, as Arizona and Oklahoma enacted tougher laws regarding illegal immigrants, many moved to Texas.

Illegal immigrants are coming into Texas, but not from where one might think. The rush is coming from Arizona, Oklahoma and other states -- places that have recently passed tough new anti-illegal immigrant laws.

The two toughest measures are in Arizona and Oklahoma.

The Oklahoma statute, which took effect in November, makes it a crime to transport, harbor or hire illegal immigrants. Effective Jan. 1, the Arizona law suspends the business license of employers who knowingly hire undocumented workers. On a second offense, the license is revoked.

Anecdotal information seems to indicate that illegal immigrants are leaving these states in growing numbers.

"They're really tightening the screws," said Mario Ortiz, an undocumented Mexican worker who came to Houston after leaving Phoenix last year. "There have been a lot coming -- it could be 100 a day." (Feb 2008 )

Depending on where you own property in Oregon you might have vacancy rates increase from 2 to 10 percent (strictly an educated guess) over a period of the next four years. In some locations these vacancies may take a while to fill back up.

Department of Motor Vehicle Implementation

Department of Motor Vehicle (DMV) implementation time lines are as follows:

Rules currently in effect:

  1. Electronic verification of social security numbers

  2. Provide ombudsman for people needing help meeting new identification requirements

As of July 1, 2008

  1. Proof of Social Security number in document form

  2. Proof of US citizenship or legal presence in the U.S.

  3. Collection of full legal name for driver records

  4. Allow use of photo on file for out of state renewals

  5. Allow a 90 day temporary card (with one 60 day extension available) to give customers time to find documents
As of January 1, 2009

  1. Electronic verification of alien identification numbers

As of January 1, 2010

  1. Limited term cards for people with limited stays in the US

(from Oregon Department of Transportation, DMV websites)

Summary

Landlords will have a couple of years to adjust, before the full impact of this legislation affects rental units, as Oregon gets in line with federal standards. Clearly though, properties that have a significant percentage of illegal (undocumented) aliens will see increased vacancy rates as the nervous tenants leave town first. There is no good way for Landlords to prepare for this upcoming shortage of tenants. On the other hand, the timing for landlords might work out because with the current low vacancy rates (especially in the Portland Metro market place) landlords may be able to backfill with tenants that have documents.

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