AID REFORM HAS DOMINO EFFECT; WELFARE CUTS FOR LEGAL IMMIGRANTS WILL HURT BUSINESS AND PROPERTY OWNERS IN THEIR COMMUNITIES.

Byline: Jennifer Wolch, Heidi Sommer and Cynthia Nelson

LAST summer's welfare reforms barred legal immigrants from receiving SSI or food stamps. Although Washington appears to be getting cold feet about pulling the rug out from under hundreds of thousands of elderly and disabled people, the final budget agreement is not yet in place and SSI provisions remain on the table. There are no proposals to restore food-stamp benefits to legal immigrants.

Most of the debate about these provisions has focused on their immediate human impact. But the well-being of entire communities may also be at stake. For example, what would it mean to Valley communities home to large numbers of legal immigrants?

To find out, we analyzed one Glendale community, home to many Eastern European and Middle Eastern immigrants. This area of Glendale is poor - almost a quarter of all persons live below poverty - and more than 80 percent of all households rent rather than own their own homes.

Approximately 5,951, or 15.5 percent, of this community's population could potentially be impacted by welfare reforms. More than 2,100 legal immigrants relying on SSI - 5 percent of the total community population - are at risk of losing their benefits at the end of the summer. Over 855 of these people are disabled and also will lose the In-Home Support Services that allow them to be maintained in their homes, as opposed to much costlier nursing home facilities. An additional 2,612 people, or more than 7 percent of the community population, will lose food-stamp benefits.

The total income in this Glendale community is $485 million per year, approximately $74 million of which is spent on food. If we include the value of food stamps that were being spent in the community each year ($9 million), this food allocation rises to $83 million, or 3 percent of all food spending in this community. To this we must add the loss of food-spending power on the part of those individuals losing their SSI benefits - another $3.2 million per year - pushing the share of total community food-spending power lost, as a result of benefit termination, to almost 7 percent.

In addition to loss of food-spending power, the loss of SSI benefits means loss of local purchasing power. This will hurt the local-serving business community, which supplies apparel, transportation services, entertainment and a variety of miscellaneous consumer items to local residents.

Out of a total spending on such expenditures of approximately $178 million a year in this community, $3.5 million would be lost.

Local merchants would share their economic pain with Glendale's landlords. We estimate that renter households at risk of losing SSI benefits spend about half of their incomes on rent.

When SSI benefits stop, reducing incomes in affected households by over 50 percent, rent burdens may soar to more than 100 percent, forcing such households - almost one-fifth of the entire renter household population in this Glendale community - to double up with other people or face the prospect of homelessness.

Quite aside from the human misery that this may entail, landlords will lose as people move out of their buildings.

Over time, they can be expected to lower rents, and the value of their buildings will decline. If only half of the total renter households expected to lose SSI are forced to move out of apartments renting for $500 per month, landlords would lose $6.3 million per year.

Property values would fall by over $41 million, were the lowered occupancy rates to become permanent. Clearly, landlords would move to attract new occupants, but this takes time and expenditures; lowering rents also may be necessary.

Depending on how apartment buildings are financed, landlords and the financial community will be more or less impacted by declining occupancy and rent reductions, but losses to Glendale's rental housing providers could be substantial.

Unless SSI and food-stamp benefits are restored for legal immigrants, this Glendale community can expect to lose $17.9 million in income plus food-stamp value per year, representing 3.6 percent of its income base. Such a large, sudden drop in spending is significant, particularly for smaller neighborhood food retailers who operate on razor-sharp profit margins.

In addition, local landlords could experience a loss of up to $12.6 million in rental income, and the value of their property could decline significantly.

While options may differ about whether or not legal immigrants should be entitled to public assistance benefits, let's not lose sight of the fact that welfare reform could also devastate neighborhood commercial districts, hurt landlords and lower property values.

Should Glendale - or any other Valley community - have to pay such a high price for welfare reform?