SB 81: Illegal Immigrant Exodus Blesses Ogden

Utah's anti-illegal immigration legislation known as SB81 goes into law today. Its a belated victory for the voting public who strongly endorses legal immigration despite the squeamish behavior of their elected officials.

I won't digress into a political rant here however. Lets talk about the real estate implications of this bill.

The first factor to consider is that this law will be unequally enforced across the state. Just as water seeks the path of least resistance, so will illegal immigrants seek this same path. If law enforcement is tougher (or just has the reputation for being tougher) in one community over another, illegal immigrants will tend to leave that community and move to the other. Why risk deportation when you can move a few municipalities down the road?

I am proud to say that Ogden Police Chief Jon Greiner has declared his men will fully enforce this law. As we all have seen in the news, Salt Lake City PD has advertised to the world that it will NOT be enforceing this law. Salt Lake City is now the path of least resistance. The net result of this will be a net flow of illegal immigrants from Ogden to Salt Lake City.

So what does all this mean to us? How will life change now that this bill is law?

The law basically does the following things:
1. Makes it tougher for landlords to rent to illegal immigrants.
2. Makes it tougher for employers to employ illegal immigrants.
3. Allows law enforcement to deport illegal immigrants that are arrested for crimes.

The bill will have a couple immediate negative effects on the Ogden Community due to a decrease in population. A portion (undetermined at this point) of the illegal immigrant population will move out of the area. This will put downward pressure on rents as there will be less demand for housing. It will also affect commerce as there will be fewer people to purchase goods and services in the community.

However, there will be several long term benefits to this bill. In the long run, property values and rents will increase. This is due to the substitution that occurs when illegal immigrants are replaced with higher income individuals. Property values and rents are correlated to the income of the people that inhabit them. Ever wonder why a Victorian in the Avenues of Salt Lake City can sell for $600,000 while a similar one in Ogden sells for $300,000? The answer is income. If the people that lived in the Avenues all moved to Ogden, pretty soon the prices in Ogden would be the same as were in the Avenues.

I am not suggesting that prices in Ogden are going to explode, rather, they will see an initial bump as the ultra-low income illegal immigrants are replaced by legitimate immigrant low income folks. Also, with fewer laborers available, wages will rise for the remaining folks that are here. Higher wages translates into higher property values as people have more to spend on housing.

Property values will also increase as the externalities associated with illegal immigrants are expunged from the neighborhoods. Issues like sanitation, over-crowding, parking, crime, and other factors will decrease, making neighborhoods more attractive, and thus increasing value.

What will be interesting to watch is how Salt Lake City absorbs Ogden's (and everyone else's) illegal immigrant population. The good things I presented here as happening to Ogden will be the exact opposite for Salt Lake City. Look for significant changes in our capitol city due to their non-enforcement policy and "save haven" reputation.

So, the demographic shifts that are about to begin will have a lasting and positive impact on the quality of life in Ogden. Lets support our local police in doing their jobs. They deserve it.