Housing is becoming a key tactical weapon in dozens of communities seeking to reduce the number of undocumented resident aliens, according to a new study. During the past 24 months, immigration-control ordinances in 104 cities and counties in 28 states have either been proposed or adopted. Of the 104, 43 included rental restrictions that threatened to penalize landlords for knowingly -- or innocently -- leasing space to undocumented individuals.

The study, "Division and Dislocation: Regulating Immigration through Local Housing Ordinances," was conducted for the Washington D.C.-based Immigration Policy Center and authored by Jill Esbenshade, an associate professor at San Diego State University. The report, issued September 14, covered ordinances either proposed or adopted in communities as far-flung and diverse as Escondido, Calif., Hazelton, Pa., Nashville, Tenn., Culpeper, Va., Farmers Branch, Tex.,and Huntsville, Ala.

Most of the housing restrictions have language similar to a ballot initiative proposed in San Bernadino, Calif. Under a section titled, "Renting to Illegal Aliens," the initiative -- which was approved by a 6-1 vote of the city council but barred from the ballot by judicial order -- property owners who allow "an illegal alien to use, rent or lease their property shall be in violation of this section, irrespective of such person's intent, knowledge or negligence." Property owners under the initiative would be "required to submit a copy of the lease or rental agreement to the City Clerk's office within 45 days of execution." Any landlord in violation would be subject to a fine of not less than $1,000.

Though the study notes that none of the rental housing restrictions has yet been enforced, and many have been challenged by real estate or civil rights groups as unconstitutional, there have been local impacts nonetheless. In Riverside, N.J. and Hazleton, Pa, "there are 'for rent' signs … both for stores and apartments, because people have moved out, they've left, both legal (immigrants) and those presumably illegal as well," according to a local bar association official quoted in the study.

In Farmers Branch, Tex., merchants who had Hispanic clientele have seen business declines of 20 to 50 percent, said the study, ever since the initial debate on the city's controversial immigration-control ordinance. A group of 31 merchants subsequently sued the city, claiming economic injury. In San Diego County, Calif., the head of the local apartment owners association complained that the Escondido city ordinance would be impossible for landlords to comply with because "they are not only being asked to perform a duty for which they are not trained" -- identifying illegal aliens -- "but are likely to discriminate against (other) renters in an effort to comply," according to the study. Escondido landlords also complained that "such complaints could be used as a form of harassment to keep Latinos out" -- exposing them to potential federal fair lending prosecution.

The study suggest that most anti-immigrant real estate ordinances continue to be vulnerable to legal attack on fair housing, civil rights, equal protection and due process grounds. Moreover, "regulating immigration has long been within the purview of the federal government." The study acknowledges that Congressional and White House "inaction" on immigration issues, plus the costs to local and state governments of high numbers of undocumented aliens, have "led to heightened frustrations at the local level."

Bottom line: Owners of rental real estate -- ranging from apartment buildings to individual houses or duplexes -- could find themselves increasingly on the front line of the national immigration debate. But when they face restrictions and penalties simply because they rented a unit to a person who turns out to be undocumented, they need to pick up the phone, hire a lawyer, and challenge the ordinance in court.

So far, according to the study, none has survived judicial scrutiny.

Published: September 17, 2007

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.