Housing Market Fiasco And American Retirements Not Helped By Republican Administration's Immigration Raids Terrorizing Illegal Immigrant Potential Homebuyers
by Alan Lee
Do you know why I'm not voting for the Republicans this year? It's because of their failure to connect the dots. There are many reasons for the financial meltdown and the subprime mortgage mess that we find ourselves in, but the Republicans have not helped when they could have by doing nothing against the illegal workers. Besides the President's inability to focus on the problem during his watch until it was too late, I specifically refer to the Administration's setting U.S.I.C.E. loose on the undocumented immigrants in highly publicized raids netting hundreds of illegal workers and terrorizing millions with threats of deportation and criminal prosecution. Scenes of shackled people being herded like cattle and reports of predawn raids on illegal immigrants in their homes (even in million dollar houses) struck deep fear. There are an estimated 11-12 million undocumented immigrants in the country. Up to 45% of them had valid visas and have overstayed according to the Pew Hispanic Center. Many have been here for years, own homes, or are potential homebuyers. Those who were interested are no longer thinking of buying. They are fearful that they will be picked up at any time and deported. They are not making long-range plans, especially not involving a house. As an immigration lawyer, I see many situations in which our illegal clients own their own homes and in many cases their own businesses. Common questions that I used to hear were whether they could buy homes and if so, whether they would be able to obtain mortgages. I don't hear those questions anymore. Now the more common questions are whether they will forfeit their houses if they are caught by Immigration or should they transfer their homes or businesses to others now or how they can transfer ownership if they are in jail.The Republican Administration hatched a plan in early 2007 to sell the large immigration legalization package by emphasizing a tough enforcement policy to go along with the immigration benefits. The tough enforcement side of the plan may also have been a devious way to convince illegal immigrants that the consequences of refusing to participate in the plan which was eventually titled "The Grand Bargain" would be harsh. The Grand Bargain failed mainly because of conservative Republican opposition, but the Administration's green light to enhanced U.S.I.C.E. actions against undocumented immigrants continued and even stepped up in scope after June 2007. In cracking down on this class, the Administration eliminated a potential market to buy homes. Illegal immigrants are by and large a good market for home buying. In many cultures, wealth is defined by land and home, not by the stock-market. This class of individuals is usually unable to obtain mortgages without large down payments and significant collateralization of loans. Many of the situations that we have seen are illegal immigrants obtaining loans and/or pooling money together from other family members or close friends to finance home purchases. Their ability to buy houses under these traditional methods would have helped clear up at least some of the mess involving housing with troubled loans. A recent study from the Joint Center for Housing Studies of Harvard University, "The State of the Nation's Housing 2008," based its optimistic forecast of a housing demand increase over the next decade despite the current weak housing market on among other chief factors projected annual immigration of 1.2 million. Yet this opportunity to help stabilize the situation was lost for the short-term goal of showing the American public and the Republicans' conservative base that the Administration was getting tough on illegal immigration. Alan Greenspan, the former Chairman of the Federal Reserve, said in an interview to The Wall Street Journal in August that the problem was approximately 800,000 units of excess supply housing for sale in the U.S., and that the housing market would not recover until the houses were sold. His solution was a major expansion in quotas for skilled immigrants to accelerate the absorption of unsold housing inventory for sale and hence help stabilize prices. In looking at Mr. Greenspan's figures, it should be apparent that the loss of a large market of potential purchasers with already built-in mortgage restrictions has exacerbated the overall housing problems of America. Another consequence of the shortsightedness of the Administration's policy are reports from the Pew Hispanic Center and the Center for Immigration Studies that immigration is slowing and that undocumented immigrants are leaving the country. For many anti-immigrationists, this is a blessing. Unfortunately this is also a shortsighted view as most of the undocumented workers that come from other countries are among their countries' most ambitious young people with the will to leave familiar surroundings and carve out livings for themselves in a foreign country. They are the population that is needed now and in the future to stand at the base of the pyramid to support the retirement of the huge class of baby boomers born after World War II that is now starting to retire. The baby boomer generation is loosely defined as persons who were born during the sudden large increase in the birth rate in the U.S. from 1946 through the early 1960's. The oldest are 62 and now able to draw limited Social Security benefits until their full retirement ages of 66-67. With a meltdown in the real estate and stock markets because of the subprime loans, many have had their retirement nest eggs shattered or significantly damaged. Many may have to eventually rely solely upon Social Security and other entitlement programs of the federal government. That is why persons in this generation should be shutting the country's door not to prevent the illegal workers from entering, but from leaving. The U.S. birth rate alone will not provide enough replacement workers to support the estimated 83.7 million U.S. residents who will reach the age of 55 by 2014, and the 101.4 million by 2024. The financial noose that was already apparent to many experts looking at the ticking time bomb of the baby boomers before this crisis but which many hoped could be partly staved off by retirement savings has now become tighter. Even those whose savings were not in the stock market and 401(k) accounts have seen their savings eroded by higher gas and food prices and healthcare costs, and face the twin prospects of soaring heating oil prices and property taxes by local municipalities having limited sources of income. To illustrate the dire straits in which the Social Security system finds itself today, one has to look no further than President Bush's February 10, 2005, discussion in Raleigh, North Carolina, in which he stated that, "In 1950, there were 16 workers per one putting money into the system-which means that when somebody retired, there's 16 workers contributing to that person's retirement. Today there's 3.3 workers contributing for each beneficiary. And when youngsters retire, it's going to be 2.1-two workers per beneficiary. In other words, the burden of paying for retirees is increasing on workers." According to the Pew Research Center, the number of persons of nonworking age (below 18 and over 64) will increase to 72 per 100 by 2050 from 59 per 100 in 2005, but that the ratio will be even higher if immigration levels subside. Unless we wish to see many of our baby boomer generation eating out of garbage cans in later years, the next President is left with the options of either taxing the next generation more heavily to pay for the entitlement programs (FICA alone currently 15.3% including employer contribution of the first $102,000 of earnings), reducing benefits, increasing the retirement age for benefits, or expanding the base support of the triangle through an immigration package. Needless to say, one of the first actions of the new President should be the reining-in of U.S.I.C.E. raids. Inability to connect the dots and see the ramifications of certain actions is not the mark of good leadership, and is the reason for me not to trust the Republicans with another four years. © Alan Lee, Esq.
Alan Lee the author is a 25+ year practitioner of immigration law based in New York City. He was awarded the Sidney A. Levine prize for best legal writing at the Cleveland-Marshall College of Law in 1977 and has written extensively on immigration over the past years for the ethnic newspapers, World Journal, Sing Tao, Pakistan Calling, Muhasha and OCS. He has testified as an expert on immigration in civil court proceedings and was recognized by the Taiwan government in 1985 for his work protecting human rights. His article, "The Bush Temporary Worker Proposal and Comparative Pending Legislation: an Analysis" was Interpreter Releases' cover display article at the American Immigration Lawyers Association annual conference in 2004, and his victory in the Second Circuit Court of Appeals in a case of first impression nationwide, Firstland International v. INS, successfully challenged INS' policy of over 40 years of revoking approved immigrant visa petitions under a nebulous standard of proof. Its value as precedent, however, was short-lived as it was specifically targeted by the Administration in the Intelligence Reform Act of 2004.
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