Tuesday, May 15, 2007

Enticing homebuyers back to their home country

Yesterday's Washington Post contains an article about the aggressive efforts of Salvadoran home builders and the government to entice Salvadorans living in the US to purchase a home in El Salvador. This week, even Tony Saca got into the act:

Drawn by nostalgia and price tags of $12,000 to $200,000, Salvadoran immigrants are continuing a tradition of celebrating financial success in the United States by purchasing a vacation or retirement house in their home towns. Still, the steady stream of buyers might soon swell to a flood as El Salvador's government and developers mount increasingly aggressive efforts to attract even the lowest-income earners of the roughly 1 million Salvadoran-born immigrants in the United States -- including at least 130,000 in the Washington area, where they are the region's largest immigrant group.

In September, the government expanded the low-interest mortgages of up to $50,000 that it offers low-income home buyers to include for the first time Salvadorans living overseas who have citizenship or legal permanent residency in the United States. This month, the program was extended to those with temporary legal status here.

And now similar help is being offered to Salvadorans living in the United States illegally, qualifying them for financing if they can prove they have been sending money home for six months or more.

"We are inaugurating a whole new era in the housing market, a whole new outreach to our compatriots overseas," said Salvadoran President Elias Antonio Saca, who traveled to Washington on Friday to open the fair, sponsored by El Salvador's main association of home builders.

His administration has good reason to make the effort. Although Salvadoran immigrants worldwide send roughly $3 billion home each year, the government estimates that until recently only 1 percent of that has been spent on housing. The Salvadoran government estimates that more than a fourth of its citizens live in the United States but only about 2 percent of the mortgages in their homeland are held by those immigrants.

If substantially larger numbers can be persuaded and empowered to invest in housing, the cascade effect on El Salvador's impoverished economy could be profound, Saca said. "A boom in construction and real estate investment creates a whole series of new jobs. . . . The remittances from overseas would be made so much more productive."(more).

18 comments:

Anonymous said...

You know what, it would be great if that fever for urbanization that this country has always had (immitating USA as per usual) was always accompanied with urban planning to prevent deforestation, keep the population disperse around the country instead of centralized in very few areas, improving the road systems, establishing better public transport, but as things are... damn, its just an ARENA tactic to urbanize like crazy while taking the money out of those poor FOOLS up north.

Anonymous said...

Being a liberal sometimes means you find a cloud in every silver lining. Thanks for proving it.

Larry said...

I know this sounds crazy (to ARENA, that is), but the Salvadoran government could invest in affordable housing and job programs so that so many Salvadorans did not need to leave El Salvador in the first place.

Larry said...

Oh, I forgot to mention that the government could also carry out the land reform promised in the peace accords!

Anonymous said...

For the landowning class that has always made up a large part of ARENA's base, all this makes perfect sense and is making a lot of people richer. Maintain the status quo of little economic opportunity for the majority of the country while the rich live in their bubble economies in the urban centers, driving many of the poor to immigrate North, than buy the land from those same landowners for inflated prices. I know a real-estate developer in El Salvador right now who is making a KILLING off of these types of deals. Subdivide a piece of an old finca into an eighth of an acre lots and sell them starting at 4,000 dollars and you've got yourself a ton of capital all of a sudden. One downside of this is that property prices are inflating like crazy, putting the idea of owning their own piece of land even farther out of reach of poor Salvadorians, which leads to more impetus to immigrate North, and so the cycle continues, perpetuated by the government's policies. People in North America who are against illegal immigration need to understand the connection between government policies south of the border and that same exodus North. For how long can the U.S. serve as a safety-valve for economic and political refugees from south of the border?

Anonymous said...

Fact: El Salvador is 21,040 km², with a population density of 318.7 /km² making us one of the most densely populated countries in the region, if not of the world. With 2 million people living in San Salvador alone.

Fact: El Salvador is one of the most deforested countries in the western hemisphere, only second to Haiti. Much of the remaining foreests that we have are/were coffee fincas, which as EL Espino show are victims of prejudist deforestation with the buildling of 3 commercial centers one next to the other, a hotel, housing projects and a road that has dissected the Espino in two.

Fact: 6 out of every 10 rivers in El Salvador are polluted, meaning that 60% of our water resources are contaminated. Let us not forget the large percentage of the population that doesn't even have "agua potable", concentration of the population in a specific area further stress the hydric resources.

And you come here to tell me that I see a cloud in every silver lining for merely pointing out that the lack of urban planning, the lack of family planning in this country has lead to overpopulation, concentration of population in major cities, unemployment, and caotic urbanization (housing projects abound in this country, driving to El Tunco you'll see malls and housing projects sprouting everywhere, in colinas, once forested areas, sometimes not even 10 meters away from each other).

Heck, if I'm bad for pointing out the problems I would rather stay like this. Because in my opinion,it would be about time that instead of building colonias ad nauseum in such a small country like this, the country's builders should finally start building UPWARDS. That would be a much better way to manage our population. Not only that, but organizing the public transport so more people would actually use it would reduce the huge amount of traffic we have in San Salvador, heck El Salvador is tiny we could easily have a metro stretch across all the country, but we lack it completely.


Here, if you don't want to take my word for it, here are some articles that touch on the subject of "urbanizacion caotica (another aspect of poor land management), and the impact its acceleration has on the populattion in the recent years labeling it as a "problem":

http://www.heatisonline.org/contentserver/objecthandlers/index.cfm?id=3994&method=full
http://www.pnuma.org/foroalc/esp/reuniones/rjmna06i-DisastersandUrbanVulnerability.pdf
http://www.envio.org.ni/articulo/1315
http://www.radixonline.org/sustainabledev.htm
http://www.who.int/entity/csr/resources/publications/surveillance/dengue.pdfº
http://www.unhabitat.org/content.asp?cid=4276&catid=14&typeid=8&subMenuId=0

SalvaAlchemist said...

Everything that has been deforested is now gone. I dont think there is anything that can be done at this point about that. We need to protect that last remians left and embrace that. The only patches of rainforest left is in Santa Ana, Monte Cristo and Cerro Verde. El Salvador has lost 60% of its forests since the 1960s and 80% of mamals that once habited are also gone. No more howler monkeys, tree mokneys, jaguars, pumas, or tapirs.

Intrestingly enough my dad is thinking about buying a home in San Miguel now. I think El Salvador is going to experience a new trend in the coming years like Puerto Rico. More and more Salvadorans that are American citizens, like my father, who have worked here for so many yeras are going to buy homes and retire in El Salvador. I think the investors and realtors are licking their chops waiting for this to happen.

Anonymous said...

That is something I don't understand at all. Life in El Salvador is so miserable that you have 700 folks trying to ESCAPE IT, because that is what it is when you pay thousands of bucks to a coyote to be smuggled into USA after a perilous trek through Middle America. So they reach north, some of them they obtain in there what to them was denied in their hometowns: a dignified life. And now, they even contemplate the thought of "purchasing a home and retiring" in the country they escaped from? A better project, imo, would be to bring to move one step further north (Canada) and retire. God forbids that you are a monelyless elderly in El Salvador. One thing is for certain, as you say realtors/construction workers are always making a killing: gettin cheap terrain (sometimes by intimidating poor farmers into selling) then construct and all of a sudden the price of the property skyrockets through the roof, and this isn't only happening on fincas, but in places that were considered as natural protected areas.

HODAD26 said...

yep, just met a gal working in Red Rood Inn in Cary, NC from Isla Mengeura, paid 7000 to get here took 1 1/2 months
look at Taiwan, lots of up high rise makes more sense than spreading out
and true., all the wildlife i used to see in the 80's is now gone
same as here in USA too many people
now those families with 7 kids that had high infant mortality rates, well they now survive
the Catholic way
keep em dumb,drugged,drunk and uninformed
water quality. soon all the fishermen will know what gold mining does for water quality
again LEAVE NOW gold miners
as I/we will be working on fish farming in ES, NOW 6 months shrimp veda
offshore and estuarial fish farming will be developed to feed the people protein, vs cattle pork farming which takes TOO much land and way too much water read the facts on one pound protein from various sources what it takes to get the final 'pound of meat'

SalvaAlchemist said...

Life in El Salvador isn't so miserable. How is El Salvador much different from Haiti or Colombia? As much turmoil and strife they have had the people still want to live there. Living in the large crime plagued cities in the slums is miserable, but thats every Latin American country. You think just b/c a huge number of people escape El Salvador they don't want to go back? Im talking about the middle class of Salvadorans. A lot of Americans like retiring in warm sunny places and Im sure they will follow that trend. You're already from a sunny tropical region, so why not go back and live in a decent and nice community. My father has told me from the beginning he didn't want to retire and die here in the US. Home is home. Whats so hard about understanding that? If you have enough to retire on and want to go back why not? Not everyone is doing it, but more and more will. And why would any of them want to go to Canada when they're living and can buy a decent home in New York, Houston, or San Francisco. Come on Canada?

Anonymous said...

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wally said...

Actually life in El Salvador isn´t all that miserable. At least if you measure it by personal happiness. For years now I´ve made it a point to ask Salvadorans who have lived both in the states and El Salvador in which country do they think people are happier. I´ve yet to find anyone who says the U.S. Admittedly this is an unscientific poll at best, but I am continually amazed by the answer I get. People are leaving here to make more money in the U.S. but they´re happier here. Money doesn´t make you happy. A recent study showed the majority of depressed teenagers living in developed nations, not in 3rd world, or developing nations. El Salvador can be a tough place to live at times, but because of it´s people, it also has it´s moments of being a very enjoyable place to live.

Anonymous said...

I can surely see the reasons why many Americans (and Salvadoran residents of the U.S.) would want to own a home in El Salvador. However, the roadblocks to business are difficult to hurdle.

In my recent attempts to purchase a home 1) getting a bank account or a loan is like raiding fort Knox, 2) opening a checking account requires an "act of congress", 3) transferring sufficient money by wire has proven to be exasperating (it has taken 3 weeks to get through the beauracracy and the money is still not here).

Tony Saca has good reasons, which are very good for the economy of El Salvador, to promote the return of U.S./Salvadoran citizens/residents. But, until they find a way to promote a "user friendly" banking system, it will be akin to hiking to Mt. Everest.

I trust the banking industry will figure out the problems and find that there is good reason to work a little harder to get my business... and that of other potential investors from the U.S.

GAM

Anonymous said...

I am not Salvadorean but my partner is and we own a house on the beach and just purchased a finca. It wasn't that difficult. We used a cashiers check from the US and a lawyer in ES to write the purchase agreement and notarize all parties signatures. We went for 3 days and accomplished it. You do need a NIT for taxes though.
Patrick

Anonymous said...

I think it is a beautiful country with some problems. the biggest being the gangster deported back to ES from Los Angeles.

globalhome said...

Very interesting Blog and the comments are very real. I'm planning on building a development here in El Salvador and sale to the El Salvadorians in the USA plus middle class in El Salvador and some working class houses all in a gated sustainable planned community that will also have a light industrial park, trade school, commercial center and green areas. A water reclamation system to reuse all the water, tree farm to plant more trees and no cutting down of mature trees within the development (build around the trees). El Salvador is a wonderful country to live in and why not have a great community to come back to when you want to retire from the USA. I could tell more about the development but I don't want this to be an advertising statement other than a new development is being planned with the Environment and confort of living coming first with open space and a wonder Country Club and Spa.

Mike Larry said...
This comment has been removed by the author.
Mike Larry said...

It will be a good option if government of Salvadoran could invest in affordable housing so that Salvadorans need not to leave El Salvador in the first place. One can also opt for the eco-friendly construction for making the environment pure and green. To know more about eco friendly real estate property, visit us......