Colony Ridge settles with Texas and DOJ: Must pay $68 million and restrict sale of land to undocumented immigrants

Colony Ridge, the illegal immigrant 'slum' in Texas, agreed to pay $68 million in a settlement reached with the state and the Trump Administration. Another key point of the settlement is the construction of a new law enforcement center within the site.

The real estate development located north of Houston came to national attention in 2023 following an article published by The Daily Wire. Specifically, it had a business model targeting illegal immigrants, taking advantage of their immigration status to offer them very high interest rates.

Subsequently, the Biden Administration launched a federal investigation that ended with this agreement that punishes the development, eliminates its ability to lend to undocumented immigrants and increases law enforcement control in the area.

Among other things, the agreement includes requiring buyers to have a valid driver's license or identification document in the Lone Star State, including a valid visa issued after January 1, 2025. In turn, $20 million of the $68 million will be invested in the construction of a new law enforcement center within Colony Ridge.

In addition, another portion of the funds will be used to facilitate 287(g) agreements, a key mechanism for cooperation between the federal government and local law enforcement. The provision falls under the Immigration and Nationality Act of 1965 and authorizes the Department of Homeland Security (DHS) to delegate certain immigration functions to state and local authorities. For example, it allows these local agents to act as "immigration agents" in certain circumstances.

As for those who purchased these loans, the agreement contemplates measures to repair the credit damage suffered by buyers who defaulted, while obliging developers to ensure honest and accurate advertising, avoiding misleading claims about the properties and financing terms offered.

"Intentionally targeting vulnerable borrowers with the American dream of homeownership and then trapping them in a predatory scheme is not only wrong, it also violates our civil rights laws," Assistant Attorney General Harmeet Dhillon of the DOJ's Civil Rights Division said of the settlement.

"The changes required by this settlement will promote public safety, and affordable and sustainable homeownership in America, key priorities of this Administration," she added.

According to the office of Texas Attorney General Ken Paxton, the agreement "halts the development of a de facto illegal immigrant community."

"Colony Ridge endangered American citizens by allowing illegal aliens to run rampant on its streets, in its schools, and in its community. Now, it’s time for those responsible to pay a steep cost for their unlawful actions. (...) My office will continue to bring the full force of the law against anyone who threatens the safety of our state or creates a safe harbor for illegals," Paxton said in a statement.