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

Published: July 21, 1999

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A veteran of the real estate and homebuilding industries since 1986, Dena Kouremetis first joined Realty Times as a new homes writer in 1998. Since then, she has authored four books, written consumer columns on new homes issues for websites and newspapers all across the country, contributed to builder trade magazines, appeared as a guest expert on several radio shows and even created a ten-chapter podcast for LendingTree.com’s homebuilder website, iNest.com, now available on iTunes, entitled Uncharted Waters; Navigating the Purchase of a New Production Home. Kouremetis recently joined her local Folsom, CA Coldwell Banker office as a broker associate while continuing to write for the real estate industry. For the past three years, she has been training real estate agents for both the resale and new homes industries, putting her experience, research expertise and gift of expression to work to help others entering the business.