ResalesCounting the American Blessing of Home Ownership
Oftentimes, Americans get so entrenched in the way we conduct business and
run things, we may take for granted how our processes for accomplishing major
acquisitions, like home ownership, are so streamlined. Compared to other
countries, some not so far away, it truly is a "dream" to own a home, have
title to the land, live in a durably built dwelling, and know that we may
leave our property as a legacy to our loved ones someday.
But what is it like to realize that dream just south of the border? It has
always seemed so ironic to me that we can possess such national wealth and
know-how, and yet, so close to our southern reaches is another country that
can seem worlds away when it comes to home ownership.
To research the state of Mexico"s housing, I surfed the mind-bending Internet
for sources of information, and admittedly, not much data is gathered for
public consumption and for statisticians to digest. Much of what happens in
Mexico"s real estate market appears to be unrecorded, or at least not
documented until well after the transactions have taken place, officially or
unofficially, leaving little fodder for data-gathering concerns.
There is a significant difference in the quality of housing units in urban
and rural areas. Rural areas receive significantly poorer built-in durability
in construction methods of homes than do urban areas, where infrastructure
and services are more readily available. While six out of seven rural homes
do not have water available inside the home or sewerage connections, in urban
areas only a fifth to a third of homes have these deficiencies. Rural homes
are also much less likely to use gas or electricity for cooking, with 61% of
rural homes using other fuels, compared to only 7% in urban areas, according
to a recent Harvard study. Electricity is, of course, the most widely
available service in rural areas, but nonetheless a third of the homes do not
have electricity, compared to only 5% in urban areas.
One of the most significant differences between rural and urban areas is the
durability of materials used to construct homes. In rural areas, walls and
roofs are much less likely to be built from concrete and much more likely to
rely on natural materials, less impervious to the elements. Slightly less
than half of homes in rural areas also have earthen floors.
Crowding is high in both rural and urban homes, according to the study, with
many households containing more than 2.5 persons per bedroom. A whopping 57%
of rural Mexican homes, however, still do not have bathrooms within the
structure. This figure drops to 12% in urban areas.
With sharply rising demands for housing, Mexico has a great need to expand
the volume of new housing constructed. In fact, housing construction has
risen significantly in recent years, enabling household growth to double in
the first half of the 1990"s. Housing construction in Mexico is divided into
two distinct, yet overlapping markets, the formal and the informal. In the
formal sector, housing is developed under government regulation, generally
following a sequence whereby a developer acquires titled land, installs
infrastructure and services, constructs a home and sells it to a buyer, who
often receives financing either through a commercial bank or one of the
public sector lending programs. Consequently, formal sector housing is built
on titled land, is registered with the local tax authority, and usually has
adequate service provision.
In contrast, housing construction in the informal, or irregular, sector does
not conform to a "legal" formal process, taking place without some or all
government approvals. Even with the phenomenal growth of new housing and a
sharp increase in the number of homes constructed using the formal process,
informal housing still dominates the market within Mexico. A common
characteristic of informal housing is that homeowners do not have clear,
legal title to their land. Land for the informal sector may be obtained in a
variety of ways. In some cases, land is subdivided and sold by legal owners,
although the sale is not legally registered, either so that the seller can
avoid taxes or other government fees, or because the property in not legally
eligible for sale. In some cases, organized groups can enter into
negotiations with the owner to purchase land after occupying it and it may be
given to them, but these forced sales take place outside legal channels. The
age-old practice of "squatting", occupying the land for a sufficiently long
period of time to gain ownership, is still practiced in parts of Mexico.
Since irregular developments are not undertaken by well capitalized
developers, and are not within legal parameters, there is generally no
provision for infrastructure such as water, sewerage, electricity or paved
roads, nor is land set aside for schools, parks or transportation corridors.
However, it is not uncommon for some utilities in surrounding areas to be
"tapped into". Most housing in the informal sector is "self-help" housing,
where households construct their own home, initially building a simple
structure to provide basic shelter, with the idea to expand and improve the
structure as time and finances permit.
It is easy to surmise why the American Dream may also be the dream of many
of our southern-bordered neighbors after learning what the state of home
construction and ownership is in countries like Mexico. No doubt, great
gains will be made to standardize and legitimize housing, and government
organizations are now in place to raise investment capital to improve overall
housing conditions there. However, it does give the average American pause to
think about the blessings of facilitated home ownership we have come to
accept without second thoughts as to how other parts of the world may view
our lifestyles and opportunities