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Comment by ChuckNorris89 | Hacker News Reader

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.

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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.

>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.

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.

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!

> 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.

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.

> 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.

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.

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.

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?

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.

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.

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.

America lacks the legal system to allow newer and denser construction

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.

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.

> 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.

> 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.

> 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.

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.

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.

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.

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.

>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.

Africa?

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

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