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The Cost of Living in Mexico - Part 1
Living on the “Cheap” in Mexico - Things aren’t what they once were.
By: Slade Ogletree
Early on an October morning in 2000, I set the sails on my boat, sailed under the Golden Gate Bridge, and headed south. Six weeks later I found myself in La Paz. I felt like I had found heaven on earth. There were thousands of unspoiled beaches and islands to explore, the people were friendly, and living was cheap.
Groceries, eating out, repair work, entertainment--nearly every one of my monthly costs were a mere fraction of what they had been in the States. When then-longtime ex-pats told me about how cheap it used to be, I simply responded “Well, this is good enough for me”, and it was.
There were drawbacks, of course: Communication back to the states was expensive, imported goods were expensive and special orders took weeks to arrive. Internet access was not widely available, as there were only a few Internet café’s were scattered around town. La Paz had a sleepy feeling to it and I found that very attractive.
Between 2000 and 2003 the entire world went through a series of major changes, and La Paz was not left out of the mayhem. In 2000 Mexico took a major political shift and elected Vincinte Fox as President. Fox was elected on a platform of social and political reform, defeating the incumbent Political Party which had been in power for over 70 years. About the same time came the crash of the “Dot-Com’s”. Then there was 9/11 and in 2003 hurricane Marty delivered a huge blow to not only the marine community, but to the entire infrastructure of the city.
For a while following these events La Paz’s future appeared uncertain from outward appearances, but behind the scenes things were moving at lightning speed. The reforms instituted by President Fox were taking root making governmental offices much more efficient and “user-friendly”. Laws making foreign investment in Real Estate much less risky were implemented and old, long-standing monopolies were becoming “Endangered Species”.
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Soon rumors of major developers looking at huge projects ran rampant through town. Within months many of these rumors were proven true. The first of these developments to take shape was Marina Costa Baja. Pariso Del Mar soon followed, as did the renovation of The Grand Baja, a huge hotel that had stood vacant for 15 years and had become an eyesore. Many other projects are also in various stages of construction and the trend still appears strong.
Lured by more friendly trade regulations and a more stable economic environment, the Retail sector saw opportunity as well. Sorianas Grocery Store now anchors La Paz’s first indoor shopping mall. City Club, Office Depot, and other chains of Big Box Stores followed, and are in full operation, while Wal-Mart, Home Base, and others are slated to open in the near-future.
The Mexican Government made State-sponsored grants and loans available to citizens, enabling nearly every worker to buy their first home and make affordable payments on it. Residential building grew exponentially. Credit has become more widely available as well. New cars, once a rarity, are now the norm. Cellular technology has made communication available to anyone who wants it. In 2000 there was a 2 year waiting list for a residential “land line”.
The economics of The United States and Mexico have always been closely linked. The value of the US Dollar on International Markets has substantially fallen over the past 8 years, and is worth about 1/2 its former value versus the Euro, while the value of the Dollar versus the Mexican Peso is more or less the same. This means the sharp rise in the cost of consumer goods felt in the US, is also felt in Mexico, and even more so in Baja where a large percentage of goods sold are US imports.
The economic boom in La Paz and other areas has affected nearly every person living in Baja, both positively and negatively. It has certainly helped some more than others. More families have access to affordable housing, but urban sprawl is overwhelming. I can enjoy wireless broadband on my sailboat, but marina space is very expensive. Construction is seen everywhere and huge clouds of dust hover over them like a brown shadow.
Prices of “consumer goods”, which translates to food, electricity, and general life, are now about equal to the States. The biggest exception is gasoline, which now costs about $2.50 per gallon. Mexican gas prices are controlled by the government, and the industry is heavily subsidized. Those subsidies are set to expire Jan. 1, 2009, and most expect a sharp rise of prices at the pump.
The days of cheap living in Mexico; the 25 cent beer, the 3 for a dollar fish tacos, and $2 dollar steak dinners are a thing of the past. They have been replaced with lavish resorts, condominiums, and, very soon, a golf course…one of several planned. Our islands are now federally protected and brimming with eco-tourists and our beaches are boasting modern facilities to protect them.
We all know that change is inevitable. Some like it some don’t. A few get rich, a few go broke. That’s the way it works in life. Just like a baby bird that flies from its nest, the little city that I fell in love with has grown up.