Foreigners filling neighborhoods in Santa Ana, southwest of San José; outsiders buying huge amounts of coastal property in the northwestern province of Guanacaste; North Americans offering questionable real estate deals – these could be headlines and accounts from today’s newspapers. Instead, they are from a six-part series of articles written in 1974 by Costa Rican author Miguel Salguero.
The reports, written for the daily La Nación and translated in The Tico Times (TT, May 24-June 28, 1974), questioned Costa Rica’s future if foreign land speculation continued and asked if the “Gringo invasion” was going too far.
“Within a few years our country could become completely foreign to Costa Ricans,” Salguero wrote.
The writer made a call for government officials and private citizens to analyze this reality and take preventive measures to stop what threatened to be uncontrolled speculation by foreign interests.
Has that call been answered in the more than 30 years since his series was written? No, according to Salguero, who revisited the issue with The Tico Times last month.
“The government has done nothing,” he said. “There is still no control, nothing.”
Despite his forecast in 1974, Salguero, now 72, doesn’t think the country has been lost, but he still worries about its future.
“I still wonder what will be left for our grandchildren to inherit,” he said, echoing a question he asked in his series.
Almost no limits prevent foreigners from owning large quantities of land, real estate agents are still not required to have licenses, and property continues to be increasingly unaffordable for many Costa Ricans, Salguero said.
A glance through the classifieds reveals homes in the suburb of Escazú selling for $175,000-425,000. While these may seem affordable to the foreign eye, the average annual household income in Costa Rica in 2004 was ¢4.2 million ($9,600), according to the National Statistics and Census Institute (INEC).
In 1968, one manzana of land (1.75 acres, 7,000 square meters) cost ¢10,000 ($1,506 at the exchange rate of the time). By 1974, that price had jumped to ¢100,000 ($12,360 at the exchange rate of the time), Salguero wrote. Today, large lots in Santa Ana go for $15-$110 a square meter, or $105,000 to $770,000 for a manzana, according to realtor Les Nunez.
The land speculation by foreigners in the 1970s and since is partly to blame for these high prices, said Salguero, who, despite not having more than a fourth-grade education, has also worked as a television producer and film director.
When Salguero entered journalism in 1962, he did so with the goal of introducing Costa Ricans to their country – revealing the untouched beaches and seldom-visited volcanoes. Ironically, this and other publicity has 40 years later contributed to a situation in which many Costa Ricans cannot afford to visit the tourist destinations in their own country.
Salguero learned early on the role of publicity in real estate. As he published articles regarding “undiscovered beaches,” people would read the stories and seize the opportunity to capitalize on the area’s potential by buying property and starting businesses.
Similarly, publicity in North American and European publications during the 1970s offered beachside property in Costa Rica for affordable prices.
Salguero’s 1974 report details cases in which large swaths of land in Guanacaste were purchased by foreigners at cattle-ranch prices. The property was divided into lots, a few amenities such as access roads and electricity poles were installed and the lots were then advertised in North American publications. Although the asking prices were considered cheap to many foreigners, they were highly inflated compared to the “laughable” prices for which Costa Ricans sold their land, Salguero said.
The report cites similar incidents in Santa Ana and communities throughout the country, although not on such a large scale. More than blaming foreigners for taking advantage of the situation, Salguero blames Costa Ricans for their lack of foresight.
“Costa Ricans don’t think in the long term. Look at how a Tico views a tree. He doesn’t think of how the tree stabilizes the land, he doesn’t think of how it gives us oxygen, he doesn’t think in future tourism, he doesn’t think in a million things; he just thinks in how many pieces of lumber he can get out of it,” Salguero said on his recent visit to The Tico Times.
“This is one of the biggest problems Costa Ricans, and all Latin Americans, have. We do not think ahead; we don’t think of savings,” he continued.
The result is that Costa Ricans are “practically marginalized” from many Pacific beach towns, such as Tamarindo in Guanacaste. Not only are many financially unable to buy coastal property, they cannot afford to vacation in the more popular beach towns.
“The Costa Rican has lost access. The middle class, the lower middle class, can’t go to these beaches,” Salguero said.
“They can go to the actual beaches,” he corrected himself. “We have been saved by one thing, the (Maritime Zone) law protecting the first 50 meters of beach from development, keeping it open to the public.”
The Maritime Zone law also prohibits the 150 meters of coast beyond the 50-meter line from being privately owned. This property can be developed only by companies or individuals who are granted a 5-20-year concession (a type of lease) from the government.
The law prohibits foreigners not residing in the country for at least five years from holding the valuable concessions. Companies founded in the country by foreigners or whose shares or capital correspond in more than 50% to foreigners also cannot be awarded concessions.
However, an investigation last year by the business and finance newspaper El Financiero revealed that 81% of concessions include the participation – through capital or administration – of foreigners, predominantly U.S. citizens (TT,March 18, 2005).
Furthermore, though so far unsuccessful, the Libertarian Movement Party has called for a bill to get rid of the Maritime Zone law and open the coast to private ownership.
Beyond land speculation and inflated prices, Salguero’s 1974 report describes neighborhoods in which foreigners – from all over the world – outnumber Ticos.
“In many cases foreigners completely surround Costa Ricans who have not wanted to sell their land,” he wrote.
Throughout his series, Salguero is careful not to cast criticism on most of the country’s new residents. He writes that foreigners’ reasons for moving here are understandable – nice climate, beautiful scenery, and a peaceful and kind population.
Furthermore, most Costa Ricans opened their arms to the new residents, calling them quiet, clean and nice.
But Salguero does criticize foreign real estate firms and land speculators who thrived on the country’s lack of laws regulating the industry. Countless shady deals left foreigners holding property titles to land that didn’t exist or land that was also purchased by multiple other people.
“The majority of foreigners abide by the laws, work shoulder to shoulder with Costa Ricans, and believe in the beauty of our country and its moral values. This majority is welcome; because there is no feeling against foreigners. Nevertheless, this feeling could develop – God willing, it won’t – if the 10% are allowed to make a joke of our land and our prestige…” Salguero wrote near the conclusion of his series.
Has this feeling developed? A look at the anti-United States graffiti that marks city walls or the defaced John F. Kennedy statue that stood last year in a city park suggest maybe it has.
However, Salguero believes this is less related to an increase in foreign residents and more related to the U.S.-led war in Iraq and opposition to the highly controversial Central American Free-Trade Agreement with the United States (CAFTA).
Few people are whole-heartedly anti-North American, he said.
“Those who are opposed to everything that smells of Gringo are the unions,” he said.
Furthermore, the foreign population has had an important positive impact on the country by promoting a culture of environmental conservation, Salguero added.
A Foreign Future?
With thousands of foreign-produced products lining grocery store shelves, non-Costa Rican songs dominating karaoke bars and more and more teens sporting U.S.-brand T-shirts, Costa Rica has reached a newlevel of foreign invasion, Salguero said. The writer doesn’t blame the foreign resident population for this influx of outside culture, rather he says it is an inevitable product of globalization.
However, he calls for a greater effort on the part of the Ministry of Culture to instill in Costa Ricans the country’s own culture.
“Here they say there is no folklore, no culture, but there is, and it is worth preserving,” he said. “For the country to withstand the strong push of foreign culture, it must have strong roots in its own identity.”
As far as government initiatives to create an appropriate balance of foreign investment in property – 30 years of life experience since he wrote his series have made Salguero a little less optimistic. He now says it is up to Costa Rican citizens to guarantee the country isn’t sold to the highest bidder.
“Not selling your property is the best business you can have,” he advised his fellow Costa Ricans. “Every day it is worth more… and sometimes it is a richness beyond price.”