Arizona’s stiff law on halting illegal immigration goes into effect this week, barring judicial action. We’re already seeing the ramifications of SB 1070 on the Tucson commercial real estate market.
The law, scheduled to go in effect on Thursday, July 29, says anyone in Arizona who is illegally in the United States is criminally trespassing in the state.
Law enforcement officers are required to determine the residency status of someone they legitimately stop or arrest and whom they suspect is in the country illegally. Illegals are handed over to federal officials.
SB 1070 also deals with hiring and smuggling illegal immigrants.
Tucson businesses, including some on Tucson’s south side, which is heavily populated by Hispanics, have already seen a drop in business, the result of residents moving to other states and an economic boycott by people outside of Arizona.
Commercial real estate in Tucson just started a slow, slight recovery from the Great Recession, but SB 1070 puts several businesses throughout the metropolitan area back on the slide. The retail market, tourism and rental housing appear to have been hardest hit since Gov. Jan Brewer signed the measure into law last spring.
If this new economic hit continues, it will mean continued low rental rates and more vacancies in the Tucson commercial real estate market.
It can also mean a shuffling of businesses to other Tucson locations as south-side merchants try to survive. One flower-shop owner told a television news reporter that he may relocate his business to the north side in order to stay afloat.
Supporters of SB 1070 add a counter effect by encouraging travel to and commerce with Arizona. It’s difficult to tell at this point whether that activity will cancel out the economic hit we’ve already seen from the law.
Our advice is to continue the good practices of investigating all of your options for locating new space or renewing your current lease. The current volatility in commercial real estate requires a firm understanding of your business needs and where those needs can be met.