Builders Entice Area Salvadorans To Construct Houses Back Home
Monday, May 14, 2007
The housing expo at the Four Points Sheraton in Washington this weekend featured all the essentials of upscale suburban living: Glossy posters advertised mansions with colonnaded balconies and walk-in closets; elegant saleswomen extolled the virtues of gated communities with swimming pools, tennis courts and such names as La Hacienda and Versailles; and bankers stood by to offer financing for as little as 5 percent down.
But despite the thoroughly American amenities, the properties were in rural El Salvador. And the prospective buyers were almost all Salvadoran-born immigrants drawn by the lure of home yet unwilling to forgo luxuries they've grown accustomed to during years, even decades, in the United States.
"We're not just selling houses," said Jorge Rivas, a representative of Avance Ingenieros, one of El Salvador's largest developers. "We're selling a lifestyle."
Drawn by nostalgia and price tags of $12,000 to $200,000, Salvadoran immigrants are continuing a tradition of celebrating financial success in the United States by purchasing a vacation or retirement house in their home towns. Still, the steady stream of buyers might soon swell to a flood as El Salvador's government and developers mount increasingly aggressive efforts to attract even the lowest-income earners of the roughly 1 million Salvadoran-born immigrants in the United States -- including at least 130,000 in the Washington area, where they are the region's largest immigrant group.
In September, the government expanded the low-interest mortgages of up to $50,000 that it offers low-income home buyers to include for the first time Salvadorans living overseas who have citizenship or legal permanent residency in the United States. This month, the program was extended to those with temporary legal status here.
And now similar help is being offered to Salvadorans living in the United States illegally, qualifying them for financing if they can prove they have been sending money home for six months or more.
"We are inaugurating a whole new era in the housing market, a whole new outreach to our compatriots overseas," said Salvadoran President Elias Antonio Saca, who traveled to Washington on Friday to open the fair, sponsored by El Salvador's main association of home builders.
His administration has good reason to make the effort. Although Salvadoran immigrants worldwide send roughly $3 billion home each year, the government estimates that until recently only 1 percent of that has been spent on housing. The Salvadoran government estimates that more than a fourth of its citizens live in the United States but only about 2 percent of the mortgages in their homeland are held by those immigrants.
If substantially larger numbers can be persuaded and empowered to invest in housing, the cascade effect on El Salvador's impoverished economy could be profound, Saca said. "A boom in construction and real estate investment creates a whole series of new jobs. . . . The remittances from overseas would be made so much more productive."
Many of El Salvador's private banks have reached the same conclusion. For years, they viewed Salvadorans living in the United States as higher risks and demanded much larger down payments and greater interest rates to lend them money to purchase homes in El Salvador.
"But over the last year, we've decided to treat them equal to Salvadorans living at home, with access to the same loan terms," said Raul Sahli, director of sales at Banco Cuscatlan -- one of seven banks with a booth at the fair. "We've finally realized that the market is here, that rather than risky debtors, Salvadorans in the United States have an excellent record of payment."
Salvadoran builders and developers have also increasingly turned their marketing efforts northward, opening offices in cities with large Salvadoran populations such as Los Angeles, and forming partnerships with U.S.-based Salvadoran real estate agents.