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JANUARY 04, 2007 --

If the House of Representatives passes its version of the immigration bill--which calls for tighter restrictions along the Mexican border--it will directly affect the U.S. economy, and severely impact realtors in states with a high percentage of Hispanic-American home buyers. America's future generations will also feel the impact, since limiting the number of immigrants entering the U.S. will also limit the number of next-generation Hispanic Americans. In fact, a study by the Joint Center for Housing Studies of Harvard University predicts that the country's Hispanic population will make up 40 percent of first-time home buyers by 2026.

But that will change should Congress get its way, and toughen enforcement and border security, which will, essentially, treat illegal immigrants as felons. The truth is undocumented workers contribute immensely to their communities and the economy. They have established businesses, bought homes and immersed themselves seamlessly into American life.

They support the hotel and tourism industries, build roads, and landscape home and business properties. And they provide a reliable labor force to big-box retailers--stores that have become such an extraordinary part of American culture that it would be hard to imagine everyday existence without them.

There is a more reasonable solution to immigration reform. It's the Senate version of the immigration bill, which combines the House version's tougher rules and border security with a guest worker program, and a clear path to citizenship for some 11 million illegal immigrants.

Both bills, however, fundamentally seek to clamp down on Hispanic immigration. But before legislators put pen to paper, they and their constituencies should carefully consider the Hispanic-American demographic's real impact on U.S. economic health. Clamping down on Hispanic immigration would mean billions in lost tax revenue, and would reduce by millions the number of potential buyers for goods and services. Consider the story that the following figures tell:

Immigrant households and businesses pay over $162 billion in federal, state and local taxes annually, according to the American Immigration Law Foundation.

Undocumented immigrants contribute at least $300 billion annually to the U.S. GNP, according to a UCLA study.

The rate of homeownership among the nation's 42.7 million Hispanics hit a record 50 percent in the fourth quarter of 2005, according to a Harvard University study.

Foreign-born workers represent 13 percent of the U.S. labor force, of which 20 percent work in the service industry, according to the American Immigration Law Foundation.

Hispanics represent less than 11 percent of U.S. households, but account for 27 percent of net household growth from 1995 to 2005, according to the Harvard study.

The Harvard study also found U.S.-born children of immigrants made up 9 percent of 10- to 19-year-olds in 2005.

Fully 14.6 percent of all U.S. homebuyers were Hispanic in 2000, a 10.3 percent increase over 1995.

Clearly America's Hispanic population moved rapidly into the middle class, creating a viable demographic of home buyers. But of all the statistics, perhaps the last two are the most important. These newly minted first-generation Americans are poised to comprise the bulk of Hispanic home buyers, who already represent a solid 15 percent of homeowners.

If the U.S. enacts tougher immigration laws, the home-buying markets in New Mexico, Texas, California and Nevada would suffer first, and most. Those states benefited from the largest percentage of Hispanic home buyers in 2000: New Mexico, 35 percent; Texas, 20 percent; California, 18 percent; and Nevada 14.5 percent. Realty markets in Arizona (14 percent of homebuyers are of Hispanic descent), Florida (13 percent), Colorado (12 percent), New Jersey (12 percent), Illinois (11 percent) and New York (8 percent), would also be at risk for a big hit.

While there's no way to predict what effect immigration restrictions will have on states with low numbers of Hispanic-Americans, history tells us that as successive waves of immigrants cross our borders, they spread beyond initial cultural centers into states with greater job opportunities. As their presence grows, so does their impact on the national real estate market.

Ultimately, our representatives in Washington, D.C. will decide what message they think the electorate wants to send. America historically welcomed immigrants who, in many cases, risked their lives to find a better life--the American Dream--here.

Those immigrants changed the face of America, and for the better, most would agree. But many Americans today fear such change. Lawmakers must be careful to strike a balance between fear and the future, and enact immigration reform that recognizes the social and economic impact of Hispanic Americans.