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As a foreigner who has purchased a house for my Tica wife and daughter, I realize that I was able to come up with the money to buy a home at a bargain compared to what I would have to pay in California. But the average Tico could never afford to buy the same house. I feel a little guilt (only a little) that because foreigners are driving up the values of property in Costa Rica, the Ticos are effectively being excluded from the housing market in their own country. So what is the solution?
what kind of question is that… what is the solution.. thier is no solution except.. gringo go home
but that wont happen anytime soon
costa rica is and will be going through some major changes over the next few years.. and with any change there will be people that will benefit and people that will suffer..
if you look at the countrys largest paper la nacion… and look at the large display ads.. just about 1/2 are all in english.. so if your a tico looking for a good job with a future.. you will need to learn englsih or you will not have a future.
harlon
One of the tools that is being used is the use of imigration laws. By cracking down on purpetural tourism this will send a message to would be buyers to become legal and slow down the market to a manageble level.
I am also married to a Tica and none of her family live in the U.S they are pure Ticos. This subject is a talk amongst the family and it is a concern.
In recent months, there has been coverage in the newspapers of a proposal to put an added tax on large, valuable residences to subsidize low-income housing. Part of the solution to the problem of housing for Costa Rican commonfolk might lie in such an approach which taxes more heavily those of us more able to pay and passes the benefits through to the less affluent.
The concern for the future welfare of the Costa Rican people is absolutely valid. I see a great risk in this country being overrun by North Americans and Europeans who simply buy it up and, by so doing, dispossess the people who built it.
What none of us, Costa Ricans or emigrants, needs is a backlash that makes life more problematic for us all.
I would suggest that at least 90% of the homes being being bought by gringos are NOT homes that the average Tico would buy on his far less than $1,000 per month family income.
The “affordability” of real estate for people earning the average wage is a problem in the US, the UK (where the ‘average’ home is now $393,000) and many other countries, Costa Rica is no different.
I proposed years ago that Costa Rica property taxes should be doubled on all real estate that is worth more than US$250K and that would bring in a huge amount of money that hopefully could be put to good use.
And again, please remember, it’s not just gringos, in the next two weeks, one of my recommended real estate agents is booked solid every single day including weekends with Mexicans, Venezuelans, Bolivians and some gringos but over that period she’s seeing more non-gringos than gringos.
Scott Oliver – Founder
WeLoveCostaRica.comYes, but just taxing the foeigners is not enough! Just because you create revenue for schools and roads this will not curb the influx of people buying up the land and selling it at higher costs that the average tico can afford.
You can double the taxes but it still is much cheaper than in the States and is diffently cheaper than in the U.k! This will not deture people from moving down and taking advantage of the market.
I belive you have to put more efforts on curbing the emigration of wealthy foreigners. Preventing people from coming to CR and making a fast buck just because that is where the crowds are going and the people are friendly! This is what you call taking advantage of the Ticos. Like my wife says gringos like to come to CR and have cheap labor but they would never think about paying a house maid the same as what they would pay back in California! The smiles can only go so far and then the welcome mat might be pulled from under your feet.
Investment and corperation laws need to be changed as well, look at all of the dummy corperations that in this forum has created! People that want to live in CR but not have to pay taxes or are just getting around the laws for residency!
How ever I have to remind some people that all ticos are not poor. In Tres Rios there is a development of homes that are selling in the low millions that is all Ticos, also there are many developments where the homes are in the 200,000 and are considerd north american style and are all ticos as well.
If you think the population in such a development in Tres Rios is representive, you are wrong. 15% of the people in CR is very poor, 10% is doing very well and the rest is middle-class. Ticos who can buy a house of $ 200,000.– belong to the “upper-class”.
Don’t compare Costa Rica with the US or UK, Costa Rica is escaping from its label “third-world-country”. Changes will need more then one decade.
And as long we are happy to have a maid in the house for one buck an hour, we will not contribute to improve this country, neither does a double tax on real estate.
And the “perpetual tourists” who are working here (incl. real estate agents): profiteers and pocket-fillers.
Let’s hope mr. Arias will soon come with sharp regulations about this.genn789 – I’ll compare Costa Rica to the UK and the USA if I wish because we have many buyers coming here from those countries and the “affordability” comparisons are incredibly relevant and what this Discussion thread is all about – thank you.
And are you suggesting that from now everyone ignores the Costa Rican laws on minimum salaries and pays much more than they are legally obliged to pay their maids?
And why stop there? Maybe we should we do that with every employee that we have? Where would that take us do you think? And who decides what would be a ‘fair wage’ for a maid?
What’s ‘fair’ for you would not be fair for someone else… Or maybe that’s what the ‘minimum wage’ laws are all about?
So please tell us what is your proposed solution to the problem?
Scott Oliver – Founder
WeLoveCostaRica.comGenn,
One of the issues that you might have brought up and that my wife has pointed out to me in the past is the term “third world country”. My wife has pointed out to me that this is a politicaly incorrect name for a country like Costa Rica. The U.N and OSA consider Costa Rica and counties like CR as devloping counties, thus the word developing countrys needs to be used. I belive a country like Somalia is more third world than CR.
The issue of being happy to hire a maid at one dollar a hours shows how a gringo can and dose abuse the Tico or most likly the Nica. Since I don’t know very many Ticos that would work for a Gringo at a dollar a hour. How ever I do know many of Ticos that would point out the reasons why issues like this are going to drive a wedge between the foreigners and the Ticos.
I believe the ‘politically correct’ term is “less developed country.” (LDC) and “less developed” it may be but I prefer living here than any of the other so called ‘developed’ countries I have lived in so far ….
It’s like the word “civilized”. How civilized are we really? According to http://dictionary.reference.com/browse/civilized – cv·i·lized is an adjective:
1. having an advanced or humane culture, society, etc.
2. polite; well-bred; refined.
3. of or pertaining to civilized people: The civilized world must fight ignorance.Is the so called “developed” world meeting those criteria for being “civilized?” I would suggest that one glance at any of their major newspapers and a review of their foreign policy would give you conclusive proof that they are certainly NOT civilized.
And “developed”? According to Wikipedia – http://en.wikipedia.org/wiki/Developed_country “The term developed country is used to categorize countries with developed economies in which the tertiary and quaternary sectors of industry dominate. This level of economic development usually translates into a high income per capita and a high Human Development Index (HDI). Countries with high gross domestic product (GDP) per capita often fit the above description of a developed economy. However, anomalies exist when determining “developed” status by the factor GDP per capita alone.”
Anomalies like more than 45,000,000 people (ten times the total population of Costa Rica) living in the US without health insurance…
Scott Oliver – Founder
WeLoveCostaRica.comWhat is the best a man (or woman) can give ? Time of his life. Time is the most valuable a human has, you only live once. So nobody is able to pay this, because in fact there is nothing more valuable. Every salary would be to less.
This is the filosofic part.If we speak about a minimum (by law) this means a minimum to avoid further abuse. Some people think a minimum means that paying more is not allowed. That is not true so if you pay more you are not ignoring the law.
The minimum wage laws are to protect labourers for employers who try to abuse them.In “more developed countries” it is hardly impossible to hire a full-time maid because the salaries and taxes make it very expensive.
Scott: “The “affordability” of real estate for people earning the average wage is a problem in the US, the UK (where the ‘average’ home is now $393,000) and many other countries, Costo Rico is no different.”
Genn789: “Don’t compare Costo Rico with the US or UK, Costa Rica is escaping from its label “third-world-country”. Changes will need more then one decade.”
Actually, it is different, it is different in many ways.
For one, since you are talking about people “earning the average wage” so guess you are talking about “people who work” in order to buy a home versus people who have cold hard cash… the difference is financing, financing for “people who work” is readily available in countries such as the USA and UK so it is tough to compare since Costo Ricians more often than not have to pay cash, a lump sum for their home.
Compare Costo Rico with Mexico, Pamana, Brazil, Peru, but it just isn’t a fair comparison with the UK or USA.
Even “people who work” to pay for their homes in the USA and the UK, if it is financed, can’t buy in Costa Rica, because without financing, they are just like the Ticos, got to be able to produce the hard cash.
There are tons more reasons to stop comparing CR with the UK and the USA, to many to list really, it just isn’t an apples to apples comparison. Far too many differences.
Costo Rico… just messing with you!
I have to disagree with the mortgage issue, all of my brother in-laws or my wifes family members don’t have problems getting mortgages if they have jobs to prove they can repay.
Of course the average home is around 60,000 to 70,000 and the mortgage rates are much higher than 6 percent.
A: they probably have a very good job to Costarican standards and get well paid (far more then the minimum).
B: indeed we are not talking about the 200k+ houses…..
I am not sure just how to solve this problem for the Ticos but I do know that all people will sell for whatever they can get for whatever they are selling. The only solution that I can see is a surcharge of some percentage be placed on houses sold that are way over the price that the house originally was purchased or built for. That would include all homes be it a Tico who has made a large profit or any sale that is raising the prices for any property in Costa Rica. These large developers should be hit hard, not to put them out of business but to level the playing field for all. When you level the playing field then you have a market that helps all, not just the people that are in it for the large profit but for anyone who gets a price over what the local Tico can afford. The huge profit takers do not hurt themselves but those that can’t stop the over charges should be compensated.
Art
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