Among the possible beneficiaries of the immigration reform bill now working its way through Congress is a town most Americans have never heard of: Ajo, Arizona, pop. 4,400.

The former copper-mining hub 40 miles north of the Mexican border has seen an influx in recent years of Border Patrol agents and other government workers tasked with monitoring an increasingly militarized line in the sand. These workers need places to live, and their employer—the United States government—has responded in part by building a development of 21 homes and renting them out at market rates. The total cost: $12.7 million.

Now, some residents are fuming—angry that the federal government spent millions on an expensive new development instead of housing its workers in existing homes that are now lying vacant. On Tuesday, Senator John McCain (R., Ariz.) sent a letter to U.S. Customs and Border Protection calling the spending “staggering” and asking for information that would justify the project.

Louie Walters, 71, is a former Ajo high school teacher who lives with his wife Paulette in a 1916 bungalow near the town’s half-empty palm-studded historic plaza. Walters points to vacant homes nearby and says the feds "could have bought up a whole lot of existing houses in Ajo and either flattened them or upgraded them for a lot less money."

"You don't throw things away," says Walters. The Border Patrol houses, a group of blocky pink, turquoise, yellow and brown one-and two-bedrooms, remind Walters of big-city condos. He finds them "too expensive" for Ajo.

Ajo is one of many towns up and down the 1,933-mile Mexican border that have undergone radical changes over the past decades, amid an increasingly militarized crackdown on illegal immigration. Time was, Ajo was best known as the last pit stop for tourists bound for the beaches of Sonora. Travelers stopped to stretch their legs and buy ice, beer, and Mexican auto insurance. The little unincorporated community sits in a lonely stretch of hot desert amidst black rocks and saguaro cactuses. There is the usual cast of small-town Arizona characters: stalwart locals, offbeat desert rats with mysterious pasts, and thrifty oldsters lured by free sunshine and cheap houses. The inexpensive housing was mostly built by companies that ran the New Cornelia open-pit copper mine, which closed in the early 1980s. Today, historic fixer-uppers range from early 20th century bungalows to mid-century ranch homes.

Linda Sharp, a 63-year-old Ajo real estate broker, says when she first got wind of the government housing development in 2010, she thought it sounded “extremely fishy,” considering there were already dozens of cheap homes going for fire-sale prices on the heels of the housing bust. In 2012, she wrote letters to each member of Congress because she was “indignant.”

Critics like Sharp says each of the Ajo homes cost about $600,000 to build, a huge markup from the $100,000 average cost of an existing home in the area.

But in a statement emailed to The Daily Beast, Bill Brooks, a spokesman for CBP, which oversees the Border Patrol, says the Ajo houses cost just $340,000 a piece. Brooks says the remaining $6.4 million paid for water, sewer, electrical lines, and roads for the first 21 homes and another 25 still in the planning phase. Those houses haven't been built yet, and at the moment there’s no funding to do so, Brooks says.

“CBP is committed to providing quality, cost-effective housing for frontline border security personnel—and their families— who work to secure our nation’s Southwest border. The homes near Ajo, Arizona were built in a location that meets the operational needs of CBP employees in an area where sufficient and adequate rental housing did not exist. These homes have been constructed in line with federally mandated requirements, designed for long-term use with minimal maintenance in a harsh climate," the e-mailed statement says.

The statement notes that the government "contracted Arizona-based companies to assess, design and build these Energy Star-rated homes which are 75 percent more energy efficient than average existing homes in Ajo, creating jobs and stimulating the local economy."

That's not the way Sharp sees it. "First Ajo was a mining town, then it was a leftover mining town, then it became a retirement community and then the Border Patrol came in," says Sharp, who in January, 2013 caused a stir in Ajo after she wrote a letter to the local newspaper describing what she sees as a federal housing boondoggle that unfairly cuts locals out of the market.

After Sharp complained to lawmakers, Sen. Claire McCaskill (D., Missouri), who chairs the senate committee on homeland security and governmental affairs, alerted DHS's office of the inspector general. In a February letter, the OIG told McCaskill further investigation is warranted and it will look into the matter late this year, "if resources are available," according to federal records.

Rep. Raúl Grijalva, a Democrat from Arizona's third congressional district, wrote a letter on August 16 to-then head of the DHS Janet Napolitano asking for justification of the expensive houses in Ajo. So far, his spokesman Adam Sarvana says, the congressman hasn’t heard back from DHS. A spokesman from DHS wouldn’t comment on Grijalva’s letter and said the agency responds directly to members of Congress.

The local paper, the Ajo Copper News, has dutifully covered the controversy for months, but after the Arizona Republic reported on the issue in August, Sen. John McCain (R., Ariz.) called the expense "disgraceful" and said people should be "fired."

If the Senate immigration bill, which now includes a $46 billion "border surge" amendment that would double the size of the Border Patrol to about 40,000 agents, is approved by the House, expect a lot more Ajo-like projects in the future, says Alex Nowrasteh, an immigration policy analyst with the libertarian Cato Institute. "They spent six times more per house than the local market tells them houses are worth for no apparent reason except that they don't face any monetary penalties if they spend other people's money irresponsibly," he says.

Of course, it could take some time, given that Syria has pushed a lot of things to the back of the queue.

But if the bill does pass, and the Border Patrol doubles in size, it could “put the problem that already exists on steroids," Edward Alden, a senior fellow and border-security expert at the Council of Foreign Relations, tells The Daily Beast. The Border Patrol has already doubled in size since 2006, and has faced "real recruiting challenges," Alden notes. Not everyone wants to be stationed in the remote borderlands, and Alden guesses the "underlying story" of the new government housing in Ajo may be linked in part to a plan to entice border agents to live in remote areas. If the surge comes into being, he says, "we will almost certainly see a lot more of this sort of thing."

Not everyone in Ajo is unhappy with the Border Patrol's new digs. Ruben's Barber Shop, down the street from the shuttered Dairy Queen, is one of the few businesses still standing in Ajo. Proprietor Ruben Nogales, 71, grew up in Ajo and watched its decline. Now he gives $14 haircuts and listens to customers gripe about hard times. Nogales owns four homes, which he bought "one fixer upper at a time" and rents to winter visitors. He's very reluctant to criticize a border surge, because he predicts in the long run it could be "great for Ajo's economy."

Still, he's not convinced a militarized border will keep unauthorized immigrants from crossing the line. "They'll keep coming," he predicts. "You aren't going to stop them."