Congress to allow beach ownership

Foreigners may be allowed to buy coastal property
 
BY RICHARD FAUSSET
Tuesday, 08 October 2013 01:10
Los Angeles Times / MCT

ARROYO SECO, Jalisco – To nationalistic Mexicans, it may sound like blasphemy. But Artemio Rosas doesn’t care. He wants more gringos living in his tiny coastal pueblo.

As it stands, a few hundred foreign surfers visit each winter to ride a strong north swell that moves across the smaller of Arroyo Seco’s two pristine Pacific beaches. Rosas wants them to stay, buy land and build retirement and vacation homes on this obscure pocket of coast, two hours south of Puerto Vallarta. It would help his surf shop and would help him with his new gig as a real estate broker. Most important, he says, it would mean better jobs for the town’s low-paid agricultural workers.

Rosas, 40, is among those hoping that Mexican legislators will soon modify a long-standing constitutional provision that prohibits foreigners from directly owning property along the nation’s coasts and borders.

If the constitution is changed, “it’s going to be good for a lot of people here,” Rosas said on a recent afternoon as he maneuvered his old Jeep Cherokee over the pueblo’s dusty unpaved roads. “Especially the poor.”

Since the late 1970s, foreign investors have worked around the ban by entering into trusts called fideicomisos with Mexican banks, which then hold the title to the purchased property. But real estate agents have complained that the unorthodox arrangement can scare off buyers.

In April, the lower house of Mexico’s Congress overwhelmingly approved a proposal to lift the ban on ownership of residential property in the area known as the restricted zone, which extends 31 miles inland from the coast and 62 miles inland from the border. A ban on ownership of commercial property would remain intact.

The proposal now is subject to the approval of the upper chamber —where the chances appear good — and then of a majority of state legislatures.

Complications would still remain for foreigners who want to live on coastal land held by ejidos, the agrarian communes that are legacies of the Mexican Revolution. Such land cannot be sold to foreigners, although over the years, many non-Mexicans have entered into dicey arrangements that provide them access.

Proponents of the constitutional change are hoping it will spur new foreign investment, which has been limited of late by concerns about drug cartel violence and the 2008 financial crash in the United States.

Opponents — 88,000 of whom have signed an online petition — insist that Mexico’s beaches should remain solely in the hands of Mexicans.

Some of the feeling is rooted in a historical mistrust of outsiders: Lawmaker Roberto López González, who this spring voted against the bill to ease restrictions, said in an interview that foreigners might use their beachfront property to set up military installations.

Here along the Costalegre, the partially developed stretch of Pacific coast in López’s home state of Jalisco, the proposal tends to raise less dramatic, but still vexing, questions about what a future Mexico should look like: Will a new influx of outsiders transform and Americanize traditional coastal villages like Arroyo Seco? And if that happens, what would Mexicans gain or lose?