AZ illegals

Arizona Daily


For a couple of months, Miguel León has watched the parking lot at his Midvale Park apartment complex empty out.
"The parking lot used to be full all the time. Now there's a lot of empty spaces," he said, watching a group of boys play a rowdy football game in the lot.
A lot of apartments are empty, too — a likely indicator of the growing impact of Arizona's new employer-sanctions law. The departure of foreign workers to other states and to Mexico has combined with the declining housing market to increase vacancies, apartment management executives said.
León, who said he has worked legally in the construction industry for 12 years, is doing well at his current job, but if his relatives move to another state because of the new law, he's willing to go with them.
"A lot of friends who are here illegally and have problems at work are just leaving," he said.
On top of that, the housing slump has increased the supply of rental homes, making them more competitive with higher-end apartments. The slump also has meant fewer jobs for construction workers who might rent apartments.
The vacancy rate on Tucson's South Side jumped to 11.9 percent in the fourth quarter of 2007, up from 7.1 percent a year earlier, according to Phoenix-based RealData Inc., a real estate research and consulting firm.
That area of the city has more than twice the rate of foreign-born residents than the city as a whole, according to the U.S. Census Bureau.
On the Southeast Side, 10.7 percent of apartments were empty, up from 5.9 percent a year before. That part of the city has a lower percentage of foreign-born residents.
As a whole, the metro area vacancy rate grew 1 percentage point to 8.3 percent, according to RealData.
Workers returning to Mexico
The Legal Arizona Workers Act, which took effect Jan. 1, makes it illegal under state law for businesses to hire unauthorized workers and includes punishments up to revocation of business licenses.
That has illegal workers scared for their jobs.
Construction worker Julio César Castaños, 28, said he has seen a lot of people leaving Tucson to go back to their hometowns in Mexico. Castaños, from Magdalena de Kino, Sonora, said people leaving have no plans to come back.
"Because of the new law, companies are asking for Social Security numbers, so people have started noticing they can't get jobs easily, and they prefer to leave," he said. He also has noticed workers leaving their apartments without giving notice, he said.
"In some apartment complexes, they ask you for (immigration) papers to rent you an apartment. Besides, people don't have money to pay the rent because there are no jobs," he said.
Castaños has lived in the U.S. for eight years, but he is also planning to return to Mexico if the construction industry doesn't pick up.
Number of "skips" rising
January is typically the biggest month for people skipping out on their lease agreements.
"We're seeing three to four times what we usually see," said Nancy Nicolosi, co-owner of Nicolosi & Fitch Inc., which manages 3,000 apartments in Tucson.
"People are either just leaving, or they'll come in and say they're losing their job and they have to go back to Mexico," she said. Other times, they are moving to New Mexico or moving in with relatives.
At a 160-unit apartment complex on the South Side, five "skips" would be a normal January. Three is common in other months. But this month there have been 17, Nicolosi said.
Melanie Morrison, co-owner and designated broker at Morrison, Ekre & Bart Management Services Inc., said she's seeing the same trend.
This is the most difficult market in her company's 10-year history, she said. The company manages 6,200 apartments here.
Omar Mireles, executive vice president of HSL Properties, urged caution about concluding why vacancies are increasing.
After hearing talk about the possible impacts of the sanctions law, "we were indeed holding our breath," he said. HSL manages 27 apartment complexes in the Tucson area.
While there is anecdotal evidence of workers vacating apartments and a noticeable increase in vacancy rates, it's hard to point to a definitive reason, he said.


It's not just the employer sanctions law that is affecting Tucson's apartment market. With a large inventory of houses for sale, many people who can't sell their homes are trying to rent them out, sometimes at discount rates.
The result: Some people who would normally rent apartments are able to rent houses at the same price. To compete, many apartment complexes are offering discounts for new tenants.
Overall, the apartment market in Arizona "is going through a correction and is going to struggle for the next couple years," said Greg Willett, vice president of research at M/PF YieldStar, an apartment market analysis firm near Dallas.
Occupancy rates remain healthy in Tucson — down by just 0.3 percentage points year-over-year to a 95.2 percent rate in December — and rents are increasing, he said.
Phoenix is hurting more because of an overbuilt housing market, coupled with an increase in apartment construction — which hasn't happened in Tucson yet, Willett said.
Phoenix occupancy is down 2 percentage points from a year ago to 92.6 percent, he said, and rent is decreasing or stagnant.