How the Path to Home Ownership Runs Through Mexico | Hacker News Reader

How the Path to Home Ownership Runs Through Mexico

nytimes.com

41 pointsthomasjudge70 comments

And what's the path to home ownership for Mexicans being priced out by Americans?

I'm not Mexican nor American, but I'm against this economic neocolonialism where rich countries get to export their self inflicted housing issues by pricing out the locals in cheaper countries who, through no fault of their own, get the short end of the stick by means of capital leverage, or lack thereof.

Laws should be passed in each county to protect the locals from this, but I rarely see this happening as the home owners in each county enjoy watching their assets boom.

Africa?

Historically it has been to move to the US for higher wages. This happened for instance when US ag subsidies combined with opening Mexico's ag market priced out small farmers.

I've been told that's NIMBYism, so any Mexicans forced to move are actually the oppressors.

Housing isn't finite, if Americans are willing to spend money to increase the value of Mexican housing, Mexican builders/government can build more housing to take advantage of the increased demand. I don't see much reason why any country would need to ban foreign investment, especially when supply is artificially constrained by unjustifiable regulation (true of western US and Canada, no idea if true of Mexico)

How come that such building boom did not happened in America in the first place? It is not like America would lack land.

America lacks the legal system to allow newer and denser construction

Because building houses is illegal. Whenever any politician says they want to build more affordable housing, what they mean is that the government is currently working hard to ensure new housing doesn’t get built, but maybe we should work less hard at that.

You could look at it like “a rising tide lifts all boats”.

Nobody complains when SmallTown USA gets new people moving in and expanding the local economy with jobs that would otherwise not exist causing a drain of locals to the big city to look for work.

Umm…Ok, some people do complain about that I will admit because they “price the locals out of the market” assuming they somehow have the right to dictate who is allowed to live there because they happened to be there first.

People complain about everything…

Our laws don't dictate who is allowed to live somewhere, but pricing people out, now matter where, actually causes homelessness because they can no longer afford homes in the area they live.

> Laws should be passed in each county to protect the locals from this

This situation isn't even specific to country borders, it's no different than what has happened throughout the American Midwest and Southwest post-pandemic as swathes of Californians sold their falling down shack in Palo Alto for $2M and bought houses in cash overbidding by $100-$200k in cities where a house averages $250k to buy (meaning often the winning bid was double the asking price). It's MASSIVELY driven up the cost of housing in many of these cities.

Gentrification and NIMBYISM are in constant battle throughout the world, and this is true both in inter-state, intra-state, and international economic relationships.

I would want to analyze the inverse in order to see the issue from at least two different sides:

How does it benefit local Mexicans?

For example, having additional money in their economy: in the hands of tourist businesses, services businesses, industrial product (vehicle?) sales, grocery sales, etc.

Additionally, how does it affect the culture? For example, I'm a 100% remote software engineer. I love talking about Business & IT, and encouraging people to learn accounting & web app development, for example. And I speak Spanish, so I chat about it with locals. Most aren't interested, but occasionally I encounter some.

Where ever I go, I enjoy talking to people about how they can be self taught engineers (or self-taught in many domains, really). I encourage people to research the skills in high demand in their country, region, state, and city.

Why? Because it worked for me: Someone encouraged me to grow my skills-- So did research and saw I could become a software engineer without a degree, and lo and behold: I taught myself (mostly) via online video series, ebooks, chatrooms, forums, and 3-4 in-person classes (statistics, databases).

So, for me personally, I proactively intend to benefit the local economy where ever I go-- not just by buying what people are selling and thereby supporting their businesses, but also supporting them by encouraging their career & skill growth.

If the additional money in economy was so great shouldn't Silicone Valley be absolute paradise for everyone? Clean, safe and everyone housed. There is lot of money in property there. So it must be perfect for everyone?

>How does it benefit local Mexicans?

Let me flip the script on you. How did rich Arabs, Asians and Russians buying US, London, Vancouver, etc. realestate benefit the average American/local? How much of their investment money ended up in the Average Joe's pocket? How much was his life improved from that added money? If you answer me this, I will eat my own hair.

I'm tired of this trope that real estate economic colonialism somehow benefits the locals so much, they should be damn grateful they're being priced out of their own countries/cities by richer foreigners because "they're spending their money here instead of back home".

No! You can try to spin it as some benevolent trickle down economics, but it only benefits the asset owning/rent seeking class and the middle men who make a living by taking a cut on real estate deals (banks, building developers, realtors, lawyers, notaries, etc.), basically those wo are already in the top 10%, if not even higher. The rest, mostly get shafted, as that's where the trickle down ends and the only effect they will experience is housing becoming even more unaffordable for them.

As much as you want to think you're helping, it doesn't improve the country at large, it just increases inequality. The rich get richer, while the poor will be poorer.

Otherwise Thailand, Vietnam and other expat enclaves for Westerners would be out of poverty by now. But that's not how this works. You don't get a poor country out of poverty by housing rich foreigners.

The economic benefit is only realized when the international buyers of the property actually live in the country they buy into. Their presence in the country allows more businesses to prop up, creating jobs and a higher standard of living.

The reason why Russian and Asian wealth hasn't been great for America is because America allows investment but not residence but other countries are allowing both.

Does it though? A few years ago, google opened an office in a relatively boring area of my small city, which is on the border of an area with a lot of low-income residents. Now, that place is full of nice restaurants and super expensive high rise apartment buildings. It's a nice place now.

But you know who I never ever see there anymore? The people that were living there before google came!

If they owned their homes that’s because they cashed out. If not then sorry, a chance of displacement is a part of renting, so you gotta live with it.

Also: Build more housing - zoning delenda est.

> If not then sorry, a chance of displacement is a part of renting, so you gotta live with it.

But you understand that these people are renting because they have no other choice, right? And I don't think "they cashed out" is the only explanation - there's also the possibility that they could no longer pay their property taxes.

Your comment comes across as extremely tone deaf to the reality that a lot of people will always have to rent because they cannot afford to buy, because the only new things that get built are extremely expensive "luxury" apartment buildings.

This will continue as long as rising property values is seen as a good thing. That’s why local governments promote price growth through land-use regulations.

> But you understand that these people are renting because they have no other choice, right?

That doesn't change the fact that renting is, by definition, non-permanent while ownership is permanent.

What do you suggest as an alternative? That all ownership be done away with? That a special exception for ownership of things be made if the thing in question is land or houses? That ownership of things that is either land or houses be limited? Taxed higher?

Government protecting the right to own things is the basis of civilisation.

Residential renters have their own protections too, in many places, allowing for renters to sometimes live for extended periods rent-free. There are limits on the rental adjustments, limits on evictions, etc.

A solution could be to encourage more housing to be built. Another one is to encourage economic development in other areas, so renters can move to other areas where they can afford to buy.

Insisting that people should not have to move and should be able to purchase their own home where they are, AND if they want to rent, then they never have to move again is simply unreasonable and ridiculous.

> But you know who I never ever see there anymore? The people that were living there before google came!

Who exactly is working in said restaurants?

Also, what do you think low income people do once they get a higher income? Could they move out somewhere for a better life for themselves?

If you are unhappy about not being able to see poor people but the poor people are happy about exiting their previous way of life, that's not an economic problem. It's just a you problem.

Of course it's a good thing if people are able to move up and do better economically. But it seems like a huge stretch to assume that's what happens to existing residents when gentrification happens.

That's because gentrification in America displaces lower income but gentrification in developing countries is more mixed and brings growth. Make some restaurants near a poor area in Mexico, the poor are happy to earn and not have travel 30 miles for work. 5 years in, they will leave to a cheap suburb or rural area.

I suppose the difference is if the person actually lives in and contributes to the community or not.

Many properties bought by Asians and Russians in tier 1 western cities (London and Toronto are the obvious examples) are not even lived in; they are simply places to store wealth since the home regime isn't trusted.

And what exactly would be the added benefit to the locals if those millionaires would actually live there?

That now there are consumers in the area willing to spend $10 on a latte instead of the usual $2?

Congrats. Now local consumer prices will increase even more.

How is this any different when some rich tech bro from CA cashes out and buys acreage and a McMansion an hour out of Dallas or some stock broker does the same in Florida?

Because it's Americans doing stuff in America, where everyone has, in theory, the same economic opportunities so they can do what they want with their money independent from their state. It's the same country.

It's where they live, make their money and pay their taxes so they're free to spend it there as they please, so the housing and societal issues high earners cause stays internal instead of exporting it to others countries with lower purchasing power where the locals have fewer economic opportunities than Americans.

People from Florida can also easily go and work top paying jobs in CA, while foreigners outside of the US can't just walz in and get high paying CA jobs whenever they want due to visa issues and other barriers put in place. That's the difference.

Also applies to the small mountain towns of the American West. Having all that billionaire money buying ranches does inject a small bump into the local construction/food/services economy at the cost of affordability for the workers themselves. Locals eventually get priced out.

I think there is an equalization effect there. Billionaire buys property on rural ranch instead of in the city, that leaves more room for people (possibly even people fleeing ranch life) to better afford the city billionaire could have bought property in.

As houses sell for more, rent also increases. This caused services and labor costs to go up.

This causes inflation but most wages don’t go up by the same amount, making people poorer. Just look at Silicon Valley.

It's getting easier. Portugal's D7 visa and NHR program make it very attractive for FIRE, and the Dutch American Friendship Treaty seems popular with US software developers who can contract themselves out.

The best law you could pass to protect the locals would be to allow people to build homes, I'd think.

I doubt anybody writing about this is seeing (or presenting) the entire picture. My wife owns a business in the US. Many of her employees are hispanic. The work is seasonal so the number of employees varies thru the year. Several of them return to their home countries in Mexico or Central America during the slow season. Most of them either send money "home" during the busy season, or carry it when then go. We've seen photos of their homes, often paid off, and sometimes with 2nd homes. Of those, some are quite nice, often with pools and courtyards. Of course it isn't like this for all, but some people making US wages here while living in communal spaces, are sending their higher wage assets back. And living well at home.

>economic neocolonialism

And this is where I stopped taking you seriously. This is the same sort of argument I see around 'gentrification' when really, it's carefully packaged prejudice that people can feel righteous about.

I believe that housing is a basic human necessarily, and that accordingly all governments should bar foreign ownership of housing inventory as an investment vehicle (I do draw a distinction between housing that you personally live in, versus AirBnB or rental property owned as an investment). I believe that one of the leading factors driving the U.S. housing crisis is foreign and institutional accumulation of housing stock, as an alternate investment vehicle since bond yields have shrunk so low.

However, it's easy to lose people with the "neocolonialism" histrionics. Obviously, human migration has been flowing in the opposite direction over the U.S.-Mexican border for many decades. There are real impacts of this on the U.S. working class, and rising anger over this is the fuel driving the wave of populism that we see today.

If people can ignore those impacts of Mexico-to-U.S. migration (even regarding the affected class with distain)... while expressing outrage over the comparatively minor impacts (i.e. only in border town) of reverse migration... then I can understand why such a large swath of rural Americans have grown angry and disaffected and feel like they're in a war.

It goes both ways. Americans complain about Mexicans moving into the US, Mexicans complain about Americans moving to Mexico.

IMO, the problems with restrictive boarders are so much worse.

> Laws should be passed in each county to protect the locals from this

You mean, like a law requiring individual permission from the Foreign Ministry to purchase property and also imposing extra, recurring costs on non-citizens “buying property” in select areas, like within 100km of a border or 50km of a coast (with “buying property” in quotes be because they actually don't hold title but are the beneficiaries of a renewable trust held by a local bank that actually holds title?

That's a good idea. Mexico should look into doing that.

> but I rarely see this happening as the home owners in each county enjoy watching their assets boom

Restrictions on foreigners holding real property are...actually not that uncommon of a thing for countries to have.

> And what's the path to home ownership for Mexicans being priced out by Americans?

(I’m mexican from Tijuana)

They’ll either stay in the non-gentrified areas or move to other parts of Mexico

Mexico is a big country, and Tijuana is already one of the most expensive cities in Mexico

There’s expensive condo buildings going up all over the city:

2br, 1 ba, 1,400 sqft - $418,000 USD

https://www.point2homes.com/MX/Condo-For-Sale/Baja-Californi...

I’d rather buy in San Diego than Tijuana

> Laws should be passed in each county to protect the locals from this

Mexico already has laws limiting direct foreign ownership of land.

One thing that I think isn't treated seriously enough is the sheer amount of violence in mexico. The article downplays it; says it's only an issue with those involved in the drug trade, or in certain neighborhoods.

Go watch 'cartel land'. Mexico is basically a failed narco-state in many provinces. You'll forgive me if I'd rather not live there. Hell, I have concerns that prevented me from traveling there for the 2024 eclipse because the region in question is under the control of the Sinaloa cartel.

Not even just violence - corruption seems pretty bad as well. I personally know two different people who were extorted by the police there, and when I asked by friend who is from there, she said stuff like that happens all the time.

I really dislike this attitude. I think it's over-hyped in the US media. Yes, there's violence in Mexico. But, as I always say: As long as you're not looking for cocaine or prostitutes, you'll be fine. I've been going to Mexico, including Tijuana, for 30 years, probably between 500 and 1000 times. I've seen crime, but never any sort of narco violence or mass shootings or whatever. My biggest concern in Mexico is getting shaken down by the police, and well, breathing - the air quality is shit as soon as you cross the border.

My dude, they kill people and hang them from bridges in northern mexico. They kidnapped a school bus of kids and slaughtered them.

I realize the US has violence as well, but at least it's usually one deranged guy, or two gangbangers that have a beef. In mexico it's organized violence. This isn't the work of one crazy guy, it's the work of an organization which does it to terrorize the local population.

Seriously. Go look at the US state department guidelines for travel to various Mexican provinces. This is not just something that's overhyped in the media. If the state department is telling you that you should not visit large swaths of mexico, that's a stone sober assessment based on real evidence.

https://travel.state.gov/content/travel/en/traveladvisories/...

I mean the US has organized violence too. A couple instances that come to mind are the MOVE bombing where Philadelphia PD bombed 5 children, and Waco where the ATF/FBI employment of dangerous CS canisters appears to have caused 26 children to burn alive. Photos of the aftermath show agents proudly standing over the rubble of the dead children.

https://www.pbs.org/wgbh/frontline/article/the-staggering-de...

I would describe a large portion of that as linked to the organized criminals in the US legislative and executive branch creating wildly profitable incentives for drug cartels.

I'm American and I've lived here four years now. Knock on wood, but I've yet to even see a crime. That's not to say it doesn't exist, I've heard of petty theft, muggings, and burglary, as well as narco gunfights etc. However, I can assure you that's located to particular regions.

Natural causes- natural to the line of work they're in

https://archive.ph/EOHxq

Since the pandemic I have claimed that a lot of Americans will discover the power of the dollar soon, when they realize that a better QoL is just a passport and a flight away.

The current inflation, rate hikes and the tug of war between buyers and sellers will only expedite this knowledge. The common person in America just cannot win in this casino.

Unfortunately American passports are not guaranteed immigration vehicles. Even countries with very close economic ties[0] and no language barrier are still a challenge to get labor market access into; and I can totally see that blossoming into full-on NIMBYism-but-for-people if this were to become mainstream.

[0] EU excluded, mostly because the EU was very adamant on tying trade liberalization to immigration liberalization.

> the EU was very adamant on tying trade liberalization to immigration liberalization.

Why was this the case? Do you have more background information on it? I've heard little about this, except the end result of free movement within the EU.

> A better QoL is just a passport and a flight away.

Ummmmmm

And an immigration visa.

Not that I endorse spreading America's housing problems to the world, but many countries in southeast asia and africa will effectively allow you to get away with renewing your visa every 6 months in perpetuity.

I knew one guy whose only legal requirement was to leave the country twice a year, for a day, in order to come back for another 6 months. But he didn't even do this - he went one step lazier and hired someone else to run his papers to the border and back every 6 months.

It's a country-by-country thing, and maybe they've closed some loopholes, but I'd be shocked if a wealthy American can't still get away with this in dozens of poorer nations.

You can get a residence permit in Uruguay just with your birth certificate and your passport. Then you need to prove that you have the means to sustain yourself and that's it, no more requirements for moving here. Also, no taxes on software exports ;)

Whats the land buying situation like and pricing? A lot of countries have weird rules around foreigners buying property.

As far as I know, anyone can buy land/properties here. I think the only restriction is that foreigners are not allowed to buy land up to 30km from the border or something like that. Prices are way cheaper than in the US but probably more expensive than other south american countries.

Uruguay always interest me but I heard it is basically impossible to naturalize as the judge holds evidence of ties to Uruguay to an impossibly high standard. I guess that makes sense since Uruguay is a very open nation with easy permanent residence, closely guarding citizenship allows you to hold priveleges of your citizens dear while grasping the benefits of open borders to goods and labor.

You can never live a full life like this. Without a residency permit you won't open a bank account, won't buy any property, won't by a car for example, renting outside Airbnb is difficult, won't be using any governmental services.

The trick is to go into a country, stay there for the max allowed duration.

Then you fly back to US or visit another country for a month and go back to your base country. You can do this with Visa-on-arrival at most countries with a US passport.

Yeah that and there's tons of countries where it's easy to get a long-term visa or immigration status that doesn't allow you to work. I can also name plenty of countries where as long as you don't work (and even possibly if you do) your chances of getting deported as an illegal immigrant are about zero unless you've done something to really piss off the community. One of the more amusing is Argentina -- you can literally show up on day one, file a case for citizenship, and your court docket serves as 'citizenship' for prevention of deportation.

In the USA, if you don't seek employment and stay out of the 100 mile 'constitution-free' zone and live in a state that doesn't link the criminal justice system to immigration (I think California is an example) I think the chance of getting caught as an illegal immigrant are about zero unless you catch a felony or something.

It's famously easy to uproot one's entire life and permanently move to another country.

It’s not for everyone, but it works for many. I am astounded by how many folks I run into in the states planning to move to Portugal, Spain, Mexico, etc. Definitely more than pre pandemic.

Extremely easy. You just have to navigate a maze of foreign visa requirements, have a large amount of money, no need to work, learn a foreign language, get your partner/dependents to agree, and be separated from all your existing friends/family. Why don't more people do it?

You are somewhat overblowing the situation. Mexican financial solvency requirements are fairly low to get temporary or permanent residency. I applied for and received permanent residency for our entire family with 12 months of statements of a reasonably sized 401k. Portugal’s D7 visa requires $9k/year in passive income for a single person, $18k for a family of four (these numbers are likely lower now with the EUR approaching parity with the USD). These are not crazy numbers to accomplish. They’ll also accept a remote job if your company attests that they supports you doing so. I learned this from casual reading of Facebook groups and a gaggle of Reddit subreddits, confirming ground truth with immigration attorneys.

It is not one click, for sure, but these hurdles are nothing tremendous to overcome for a functioning adult. It is a reasonable path for people who have been priced out of a good life in the US by way of its economic and policy configuration. If the situation isn’t going to improve, you shop for a better jurisdiction to exist in.

> I applied for and received permanent residency for our entire family with 12 months of statements of a reasonably sized 401k.

How common is it for folks to have almost half a million in the bank?!

The amount was far, far lower than that. Requirements below (tied to the MXN minimum wage), although they have gone up a bit since I applied (which, at the time, was on a lark just to learn the process by doing).

Admittedly, if you don’t have pension income, social security income, investment or rental income, or no earning potential, there will be challenges.

https://www.mexperience.com/financial-criteria-for-residency...

Eh, depends on where you decide to go.

Switzerland & New Zealand-- yes, to all that stuff.

But Mexico? You purchase a 6 month visa (which is just a paper receipt and a passport stamp) at the airport, border crossing, or immigration office, for about $40. Stay longer? No problem, just pay a small fine ($30? I forgot the exact price) when you leave.

Learn a foreign language-- Spanish is among the easiest to learn. And there are bountiful opportunities in the US to learn, between classes & native speakers.

partner/dependents-- of course, this depends

friends/family-- yes, but you can visit them, they can visit you. And if you're willing to be outgoing, you can build new friendships they sometimes even become like family (or actual family)

One can see it positively-- as a growth experience. Or one can see it any way they choose.

The level of ease depends on many factors, including how much a person invests in consumer objects-- such as expensive furniture or vehicles. Personally, I've always bought used furniture at goodwill, and cheap used vehicles. And so I'm not super attached to most of my stuff. There is storage available for some things as well.

How timely for me personally. I am about to live in the Puerto Vallarta area for a while. I work remotely, and saving for cash for property.

https://archive.ph/EOHxq

this shit is colonialism, and instead of Americans staying and fixing their country they'll just go ruin somewhere else

Is it colonialism when Mexicans come to America? Personally I'm happy our neighbors are here and I hope to see even more intermingling of Mexicans to America as we share a lot of cultural values and I see the Hispanic community as a source of enrichment to our nation. Mexico allows foreigners to buy property, and with a special bank trust even border property. Even going into ghetto areas of border towns I have been treated very well by the Mexican locals and they never treated me like they felt I was ruining their community by experiencing it with them.

Seriously, go to a border town and find a run down neighborhood, sit at the bar and have an abuela serve you up a cerveza. Then report back whether you are treated well or as a ruiner of the community. My experience in latin america is you'll be treated by how you act as an individual.

I'll be okay with this as long as the opposite stops as well, prevent the immigrants from coming to the US

Reply on news.ycombinator.com