California’s unique population and economy have always been heavily influenced by immigration, and so have its laws. This article analyzes California’s regulatory history regarding immigrants, discrimination and real estate.

California immigrants and real estate services

The Golden State opened the gates to real estate licensing for undocumented immigrants in January 2016. Noncitizens are now able to apply for and obtain a real estate license, a leap forward into economic stability for their households — and headlong into significant opposition from many California residents.

Any celebration of the new license eligibility for immigrants has been lost in the cacophonic uproar of dissenters with grievances. However, these cries of outrage are old news. Despite its multicultural history, California has borne several blatant attacks on immigrant wellbeing in the past.

Prop 187 and the birth of modern xenophobia

Xenophobia is an irrational, baseless fear of the foreign — and it is no stranger to California.

Disregarding the state’s early history of clashes between its settlers from different nations, xenophobia in California is not so archaic as it may seem to supporters of progressive immigration law.

Proposition 187, introduced by Governor Pete Wilson in 1994, was designed to cut off public benefits to immigrants. The proposition prohibited immigrants from public health care, social services and basic education and required certain citizens working in the public sphere (teachers, police, real estate licensees) to report undocumented individuals’ discovered immigration status to the state.

Prop 187 was essentially the cumulative effect of a deep recession and fear that immigrants were stealing scarce employment opportunities, and thus wealth, from California citizens — a fear stoked by the California Legislative Analyst Office’s prediction that the proposition was to save the state $200 million in public benefits costs.

On the November 8 ballot in 1994, Prop 187 was approved by approximately 59% of voters. However, it was never enacted. Mere days after its approval, multiple federal lawsuits were filed by various activist groups, including the:

  • Mexican American Legal Defense and Education Fund (MALDEF);
  • League of United Latin American Citizens (LULAC); and
  • American Civil Liberties Union (ACLU).

In response to the lawsuits, a permanent injunction on enforcement of the proposition was issued by Federal  Judge Mariana Pfaelzer in 1995. After failed attempts by the state to have the case and injunction dismissed, Prop 187 was declared officially dead in 1999.

Immigrants’ public benefits were protected; however, the damage intended was already done. Despite the injunction and the proposition’s defeat, many citizens retained their now imbedded wary regard for immigrants, believing constitutional consideration to be the usurpation of rights and benefits that ought to be reserved for United States citizens.

California’s progressive immigration reform development

Since Prop 187 was killed, California has made significant strides in immigration reform allowing undocumented immigrants to maintain a better quality of life than in other states. California law allows immigrants with an Individual Tax Identification Number (ITIN) – for paying income taxes – to obtain driver licenses and work permits, attend California colleges with in-state tuition and purchase homes. Immigrants are even able to apply for ITIN mortgages, although lending standards are higher for financing without a social security number (SSN).

Additionally, immigrant entrepreneurs may apply for the EB-5 visa program. The EB-5 visa program grants foreign national entrepreneurs a green card in exchange for an investment in a commercial enterprise:

  • of either $500,000 or $1 million; and
  • which adds jobs to the U.S. economy. [8 United States Code §1153(b)(5)]

Add to these benefits the recent real estate licensing approval and elimination of the California Bureau of Real Estate (CalBRE)’s prior regulations requiring license applicants to report their immigration status, a product of the Pete Wilson era. Until January 1, 2016, real estate license applicants had been required to fill out and submit a Proof of Citizenship form to obtain their license — a form recently dashed from the licensing process by a progressive bill. Now, instead of proving their citizenship or documented immigration status, today’s immigrants need only an ITIN number to apply for a license. [Calif. Business and Professions Code §§30, 135.5]

Thus, immigrants in California comparatively have it pretty good. In turn, so do active California real estate brokers and their agents.

Immigrants who are able to work in real estate — made possible by access to education, a driver license and a real estate license — are, in turn, able to earn a living. Their earnings becoming savings, which in turn become a down payment on a home of their own. Immigrants will be able to infuse the housing market with more buyers, contributing to California’s overall homeownership rate, home sales volume and economic benefit.

2.6 million undocumented immigrants reside in California as of 2015. Thus, by expanding rights to immigrants which allow them to contribute to the state’s economic advantage, we are creating a win-win scenario that xenophobic states are not able to obtain with their harsh anti-immigration laws.

Further, forbidding such benefits from immigrants will not stop them from pursuing jobs and income, so the state might as well benefit from immigrants’ active contributions without forcing the wool over its own eyes. Immigrants have long performed real estate-related services for each other without proper licensing since a license was not available to them — whether the state knew it or not.

Worse, because they reinforce enclaves (ghettos), xenophobic attitudes toward immigrants have often caused noncitizens to limit their trust to people in their immediate circle. In turn, many undocumented immigrants took it upon themselves to find suitable lodging for others and earn an under-the-counter living performing the same services as the California licensees their constituents did not trust.

By providing legitimate real estate licensing and other employment opportunities, California is able to keep track of undocumented noncitizens within the state. Licensed immigrants are now held to the same rules of conduct as licensees who are California citizens, and are subject to the same repercussions for bad behavior if a complaint is filed against them. This equal standing provides the state with a way of disciplining bad actors — both citizens and noncitizens — in real estate transactions, another step toward synchronized, standard industry practices.

Banishing xenophobia in California real estate

Agents can use the new license eligibility law to expand their brokerages and teams, make new industry connections and reach into new California markets. Licensed immigrants bridge the stigmatic gap between California citizens and noncitizens by having direct contact with members of the public, helping immigrants attain better accommodations and assimilate without facing the pompous attitudes of xenophobic “patriots.”

Professional connections are good for business, and the more diverse the better. Expansion into niche markets and social groups create business alliances through civic engagement and community relationships. Real estate agents and brokers who embrace California’s immigrant population open their livelihood to considerably more homebuyers, sellers and colleagues who can help give them a leg up on particular neighbors and client preferences. The late entry of immigrants to homeownership will be made sooner, and help them develop personal wealth. Shunning immigrants from the client base is a poor choice for agents and brokers in California, particularly considering how complex and diverse California’s population really is.

Difficulty with high demand and low inventory may limit urban housing for immigrants, but suburbs and other less impacted areas can benefit from an influx of existing ready, willing and able homebuyers. More homeowners and renters also mean more opportunity for housing turnover, stimulating a healthy market. Thus, the economic benefits – which have no concern for national borders – outweigh the backward patriotism of xenophobic citizens unwilling to welcome economic growth through competent, productive immigrants ready to establish themselves in California and continue to add new and interesting delights to the state’s economic palate.