Ex­pats flock to Cuenca—and soar­ing prop­erty val­ues un­set­tle Ecuadore­ans

In the Ecuadorean city of Cuenca, lo­cals blame ex­pats for push­ing up prop­erty prices “The wave of mi­grants has… be­gun to gen­er­ate fric­tion”

Bloomberg Businessweek (Asia) - - CONTENTS - −Nathan Gill

Su­san Lamy and her hus­band, Jean Pierre, owned a suc­cess­ful in­te­ri­orde­sign busi­ness in West­port, Conn., but they still wor­ried about how they would make ends meet in re­tire­ment. “Just pay­ing for the ba­sic ne­ces­si­ties was killing us, and we could see that there was no way that we would ever be able to stop work­ing,” says Lamy.

The search for an af­ford­able re­tire­ment spot led the cou­ple to Cuenca, a Unesco World Her­itage site in Ecuador’s south­ern An­des. They set­tled there in 2013 and now live in a spa­cious apart­ment with a ter­race over­look­ing the Ya­nun­cay River. Lamy says she and her hus­band en­joy a high stan­dard of liv­ing in Cuenca for around $2,500 a month, paid for by their So­cial Se­cu­rity checks: “This seemed to be the best pos­si­bil­ity for hav­ing a re­ally ter­rific life on a fixed in­come.”

The com­bi­na­tion of a sub­trop­i­cal cli­mate, well-pre­served colo­nial ar­chi­tec­ture, and low cost of liv­ing has made Cuenca a mag­net for North Amer­i­can and Euro­pean re­tirees—an es­ti­mated 5,000 now call the city of 500,000 home. Se­nior cit­i­zens also ben­e­fit from sub­si­dized health care and medicine, dis­counted trans­porta­tion, and a busy cal­en­dar of free cul­tural events spon­sored by the city.

While some re­tirees have opened cafes and small stores, Ana Paulina Cre­spo, di­rec­tor of ex­ter­nal re­la­tions for the city’s mu­nic­i­pal govern­ment, says the new ar­rivals haven’t made sig­nif­i­cant con­tri­bu­tions to the lo­cal econ­omy. One sore point is that many rely on Ecuador’s health-care sys­tem, where the tab for heart by­pass surgery is about $10,000, or less than one­tenth the cost in the U.S. “The wave of mi­grants has been grow­ing, and it’s be­gun to gen­er­ate fric­tion,” she says. “Our big­gest chal­lenge right now is to find ways to ben­e­fit from all the for­eign­ers.” The mu­nic­i­pal­ity is de­vel­op­ing poli­cies to bet­ter in­te­grate the im­mi­grants, in­clud­ing pair­ing re­tirees who have ex­per­tise or spe­cial­iza­tions with lo­cal univer­si­ties and cre­at­ing op­por­tu­ni­ties for them to vol­un­teer in the com­mu­nity.

When the swell of in­ter­na­tional pen­sion­ers be­gan about six years ago, lo­cal real es­tate de­vel­op­ers ini­tially thought the new ar­rivals would be wealth­ier Amer­i­cans in­ter­ested in buy­ing prop­er­ties, says real es­tate agent Mari­bel Cre­spo, a dis­tant re­la­tion to the mayor’s aide. In­stead, most turned out to be middle-class re­tirees from the U.S. who live on about $1,500 to $2,000 a month and choose to rent in­stead of buy homes. A two-bed­room condo goes for about $700 a month, Cre­spo says.

Still, build­ing costs have al­most

dou­bled in the last six years as de­vel­op­ers have rushed to ac­com­mo­date the new ar­rivals. De­mand for prop­er­ties over­look­ing one of Cuenca’s four rivers has soared, and a neigh­bor­hood of apart­ment tow­ers, known as Gringolan­dia, has sprung up on the city’s out­skirts. “I’m both­ered be­cause the price of ev­ery­thing has gone up,” says taxi driver Fabi­ola Coro, and that in­cludes her rent along with the price of a Panama hat, which, con­trary to its name, is an Ecuadorean hand­i­craft. Coro says malls are spring­ing up to cater to the new­com­ers, but lo­cals can’t af­ford to shop there.

San­dra and Wayne Ma­teri, a Cana­dian cou­ple who’ve been liv­ing in Cuenca since 2011, un­der­stand the con­cerns, but think Ecuador’s re­cent oil-fu­eled eco­nomic boom had a big­ger role in push­ing up prices than the city’s grow­ing colony of snow­birds. Also, an es­ti­mated 25,000 Cuen­cans who left the coun­try dur­ing a fi­nan­cial cri­sis in the late 1990s have taken ad­van­tage of govern­ment pro­grams en­tic­ing back em­i­grants, fur­ther in­creas­ing pres­sure on a tight real es­tate mar­ket.

Lan­guage and cul­tural bar­ri­ers may also be be­hind some of the com­plaints, but those haven’t slowed down the Ma­teris, San­dra says. The cou­ple joined in­for­mal classes pair­ing lo­cals who want to learn English with re­tirees who want to learn Span­ish. And they prac­tice tai chi with lo­cals in the morn­ings at a nearby park. In fact, the num­ber of so­cial in­vi­ta­tions the Ma­teris re­ceive can be over­whelm­ing. “There’s both a cu­rios­ity and fear on both sides, but in terms of how we’ve been re­ceived by Ecuadore­ans, they’ve been very warm,” she says. “Peo­ple go out of their way to help.”

The bot­tom line Cuenca is home to some 5,000 North Amer­i­can and Euro­pean re­tirees, most of whom have ar­rived in the past six years.

Wayne (cen­ter front) and San­dra(right) Ma­teri prac­tice tai chi inCuenca

The Don Colón restau­rant inCuenca’s down­town is a fa­vorite ex­pat wa­ter­ing hole


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