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A View From the Roof: Dramatic Changes in Store for Cotacachi, Northern Ecuador

By Gary Phillips

Linda and I arrived back in Cotacachi on the evening of Feb. 1 after nearly 5 months in the states.   While walking to Serendipity restaurant for dinner, we met two friends who joined us.  They filled us in on new happenings.   The next morning we went for a walk and were shocked at the growth taking place in Cotacachi.

NEW BUSINESSES

To start with, Cotacachi has several new businesses that appeal to expat residents.  Bhakti, an Ecuadorian-owned vegetarian restaurant, is located towards the bottom of Leather Street. There is a new restaurant called Casi Olivia, which serves a variety of ethnic foods that change nightly–Korean, Ethopian, Creole. Casi Olivia opened in the old Kalinka building, just a block off of main street.

Prana Vital Energy is a new specialty food shop carrying exquisite designer chocolates made by Jeff Stern from Quito as well as a variety of organic food stuffs, goat and cow cheeses,  specialty wines, local crafts, organic coffees, etc.  You get the idea.   The grand opening was just after we arrived in town.

Linda and I dropped in for a look on our way to dinner.  To our amazement, we recognized only about 6 of the 25-30 people in the new store!   Most were new expats in town, at least new to us.

Saturday evening we visited the Monkey Bar on Leather Street, an expat-owned bar serving a variety of beers and cocktails.  The nicely decorated bar advertises live music on Friday and Saturday nights.   Joel Kaplan wowed us on the keyboards with a wide variety of tunes that had the place rocking.  I literally could not get his rendition of “Rocky Top” out of my head for a week. I can also vouch for the fact that they make a real mean bloody Mary.

We heard that Trebol, a restaurant which was located in a little hole in the wall on Sucre, moved to what used to be D’Anita’s on Gonzales Suarez across the street from Serendipity.  Trebol features burgers billed as the best in Ecuador along with burritos, fries, and several different sandwiches, as well as a good bar selection. They also have live music occasionally.

Trebol owners announced last week that their restaurant is for sale, so there’s a  good business opportunity for someone who  wants to buy a well-established restaurant, keep busy and take a crash course in Cotacachi culture.   One of our friends commented that it is now possible to bar-hop in Cotacachi.

NEW ROADS

On our way to Cotacachi from Otavalo our taxi driver described all the road construction occurring in the area.   The six-lane Pan American highway that opened awhile back between Ibarra and Otavalo is being extended another 30 kilometers (18 miles) south towards Quito, while four lanes are under construction north from Ibarra to the Colombia border at Tulcan.

Another 4-lane highway is being constructed from Otavalo to Esmeraldas on the coast of Ecuador.  Apparently, the port at Esmeraldas is being upgraded and the travel time between Otavalo and the coast will be cut to 4 hours. This port will serve all of the northern part of Ecuador.  It now takes at least 8 or 9 hours from Otavalo to Esmeraldas.

Another 4-lane highway is under construction between Cayambe,  Quinche, and the new International airport, which is to open on Feb. 20th. This should cut travel time between the new airport and Cotacachi to around an hour and a half or less.  We traveled that road this week and were pleased to see that the existing road has been resurfaced which will make for a much more comfortable drive while we are waiting for the new road construction to be completed.

People arriving at the airport late at night may find it just as easy to come directly to Cotacachi rather than make the trip to a Quito hotel. I noticed an article in the newspaper today that says there are about 170 rooms available within a few kilometers of the new airport, but it will be about a 1- hour drive into downtown Quito.

A 4-lane connector is under construction from Cayambe to Ibarra to cut travel time between Ibarra and the new airport to around 2 hours or less. Now, it takes a good 3 hours to get from the old airport to Ibarra, if the traffic is not heavy.

The road from the Pan-American Highway into Cotacachi is also being repaired and widened, which is a blessing as the road was terribly potholed and narrow.  We heard that the Cotacachi mayor would like to have this made into a 4-lane highway, but we don’t know if that is planned or just wishful thinking.

All of this infrastructure construction will be a huge economic boon to all of the northern part of Ecuador, especially when Yachay, the new planned City of Knowledge north of Ibarra gets underway.  The government has purchased 4,000 hectares (10,000 acres of land) to construct a city of the future, with universities, research facilities and advanced technology companies.

A well-connected Ecuadorian friend told us that Rupert Murdoch, the media mogul from Australia, was here last week to consider investing in the new city. Ecuador is attracting international attention.

NEW BUILDING CONSTRUCTION IN COTACACHI

Another thing we noticed was the huge amount of new construction taking place in Cotacachi.  It seems as if a new building is going up on nearly every block.  No doubt the shortened driving time and better roads between Quito and Cotacachi will put additional pressure on home building and prices in the area, as Quitenos will begin looking for vacation homes here.

A builder told me he is starting 6 new homes next week in Tierra Firme. 

A recent condo sale captured the attention of Cotacachi expats recently when it sold for nearly double what it sold for 4 years ago. Of course, this has everyone wondering if this will be the new market price or if it was just a fluke.   But another condo in the same development is now listed for sale at more than double the original price.   It appears that a new wave of real estate inflation is hitting Cotacachi big time.

Ecuador is on the move and there is a ton of cash floating around the country.   High-rise condos are being built like crazy in Quito and they are sold out almost as soon as the foundation hole is dug. We were told prices are running around $2,000/m2 ($186/sq.ft).  This is easily double the price of condos in Quito just 4 years ago.  People in the know say that most buyers are paying cash.

We stayed in the central historic district for two nights when we arrived in country.   We immediately noticed that most streets in the district have fancy new high-intensity street lights installed, giving Old Town an aura of gentility and increased safety. It almost feels like day-time when you walk the streets at night.  Many more buildings have been restored.

The district was also noticeably cleaner with a police presence on nearly every corner.   This section of town which used to be quite dangerous now feels very safe.  A policeman told us that there are 80 metropolitan police officers patrolling the district.  This does not count the tourist police or the traffic police who are on nearly every corner.

We have a nice 950 sq. ft. condo in a restored historic building for sale for $95,000.  It is located about 4 blocks from the Presidential Palace.

I had another shock when a friend of ours in Quito who is in the real estate business told me that her relative has created a new luxury development in the hills between Cumbaya and Tumbaco, near the new airport.   The price is $160/meter for 2000 m2 lots.  Let me translate:  This works out to $320,000 for a ½ acre lot without any construction!

When I nearly choked, she asked, “What’s wrong, that is really a bargain. Similar lots in luxury developments in Cumbaya and Quito (she lives in one of them) sell for $300/m2.”   Wel,l I can tell you that they certainly don’t sell to me for that!

Times are changing dramatically in Ecuador.

And that’s today’s, “View from the Roof.”

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15 Comments

  1. Jeffrey Preston says:

    Gary

    +a brazillion on your response to the loon on his soapbox!

    It was wonderful to see you. Just too short.

  2. Vicki Kielas says:

    Linda and Gary~

    Thanks for your informative Blog site! I have learned so much re: Ecuador from the both of you. Having never been there, my husband and I are planning a 3 month journey
    there this Fall. Cotacachi appeals to us in its size and location.
    And obviously, it appeals to many! ! Wondering if your Real Estate website is up to date, price wise and availability?
    We plan to rent for the time while in country and get a feel for it all. Are rentals fairly easy to come by late Sept-Oct. do you know? I have found a few available condos on the web, but was also considering waiting until we arrive and see what’s available. Is that too risky? Thanks for you time and consideration! Vicki

  3. $320,000 for an undeveloped 1/2 acre certainly smells of rapaciousness. How can one justify that price? How many decades will a local have to work to make the down payment on a piece of land in his own country?
    I can’t for the life of me see how expats are improving the lot of Quitenos, despite their volunteerism. The Quitenos will find themselves having to work longer and harder to keep up with the inflation caused by expats. Their way of life, which is what attracts expats in the first place, is being eroded away by our consumerism. Even Rupert Murdoch is getting on the bandwagon.

    • Hi Joanna,

      I don’t think you read my story very well. The lots for $320k are being sold to Ecuadorians. Most of them are paid for in cash. The development outside of Quito where the lots are twice that price are all Ecuadorians, and there are no lots available. The inflation is not caused by expats. It is caused by a country that is on the move in the world, and is very prosperous in many ways.

      There are several malls in Quito that are filled with extremely high end stores. How many malls in America have Mont Blanc stores (for those of you who don’t know Mont Blanc, it is a trademark for writing pens that typically cost in the several hundreds of dollars). Come to Quito and see for yourself. Trust me, the expats do not go these malls to buy things, because most cannot afford them. You ask how can they justify a price of $320k for a lot. You justify it by having a market who is willing to pay for it. It’s kind of like the old saying, “if you have to ask the price, then you are out of your league.”

  4. Randy Schutt says:

    I seems as if if Pete Shear has some sort of an axe to grind. Just because gringos move to a place doesn’t automatically mean ruin. I have found the ex pats in Cotacachi to be very cognizant of the effect their presence has on the locals and their land. They get involved with the schools, kids sports teams, street dogs, orphans, etc. I hope Pete isn’t planning on moving to Cotacachi if he isn’t already there. It would be a shame to bring this kind of attitude to town.

  5. Gee Gary,

    What a suprise! Thanks to people like you Cotacacheños are being priced off their land just like what happened in Costa Rica and Panama (now Gringo colonies by all accounts).

    The patronizing, colonialist attitude of ex-pats —the sense of entitlement that Americans should be able to go anywhere in the world and have their cultural needs met– is behind the growing indignancy of locals.

    Your constant assertions that the ex-pat colonization is good for the local economy are false: displacing an economic development strategy based on sustainability, solidarity and regionalism with one based on low-wage services to the Gringos is not one with real long term benefits for locals (see Costa Rica).

    Congratulations! The gringos are well on their way to commodifying another beautiful and special part of the world and making it into a generic white bread colony, and your work over the last 6 years has been at the forefront.

    • Hi Peter,

      I’m flattered that you give me credit for causing President Correa to move the airport 1 hour closer to Cotacachi, and that he chose to build a four and six lane highway right to our front door, then continue it on to Colombia. I’m also pleased that you give me credit for his deciding to build a new 200,000 person city of the future, Yachay, only 15 miles from Cotacachi. Of course, these actions won’t have any effect at all on land prices in Cotacachi. It is only the expats that are responsible for that.

      But I completely disavow that I had anything to do with the Ecuadorian government’s decision to build a huge highway from Esmeraldas to Otavalo, right through the Intag, or that I had anything to do with the Cotacachi mayor recently signing a permit to re-instate mining exploration in the Intag, where you live. Of course, these new highways will make it much easier for wealthy Quito residents to buy holiday houses in the Intag, in Cotacachi, and Otavalo, and to haul copper out to the Pacific Ocean where it will be shipped to China.

      Really, Peter, I think there are much greater problems for you to agonize over instead of continuing your rant about expats in Cotacachi. For instance, what are Intag residents going to do when this time it is Correa that sends in the army and swat teams to keep the Junin Copper mine running, instead of expecting the mining companies to do their own dirty work. Or are you going to be like the Shuar in Southern Ecuador who have declared that they will fight to the death to protect their jungle from the miners?

      If fact, you may even find some of these very same expats living here as confederates who are willing to support the fight to keep the mines out.

      I think you should get a life, before you lose it to Intag mining and a massive influx of rich Ecuadorians who would love nothing better than to have a country home on your back steps. Maybe you should change the target of your rant. Or better yet, how about giving peaceful dialog a try, Peter. Together we can find creative solutions to difficulties in our adopted land. Only focusing on problems or perceived problems leads to nothing but animosity and frustration.

  6. Apparently the “tilde” has been phased out as of 2012 to my knowledge. The language gets reviewed by some sort of overseeing group periodically and this was one of the changes. I could be wrong.

  7. Peter Muller says:

    Gary,
    Your response to Richard on 2/10/13 8:55 pm regarding “the wiggle over the n” is, properly, a mark called a: tilde.
    Also, in your response to Sarah on 2/11/13 10:28 am, you wrote in the last paragraph of your response: “all to frequently”. It is, properly, all TOO frequently.

    Still, BRAVOS to you for your enlightening us with updates on Ecuadorian economics and other news reports

  8. Sarah Knight says:

    “Call a place paradise & kiss it good-bye”. I have been studying Ecuador for the past 5 years—when I saw Cotacachi on some stupid TV home show I knew the gig was up; guess the rich gringos have already priced me out—dang. I see the very same ads for property for sale at significantly increased prices. Everyone wants to get rich on each sale.To bad the money isn’t going to the locals.Typical “western” behavior. Disgusting.

    • Actually Sarah, a lot of the money is going to locals. Most of the construction I talked about is being done by locals, as lots of the listing you are seeing are Ecuadorian properties that are for sale to gringos and locals. You are right about the television show. It introduced a large number of people to Ecuador that previously didn’t even know it existed. Of course, the International Living endorsement of Ecuador being the number one country in the world to retire for the past 4 or 5 years has also certainly increased the exposure.

      In many cases, it would be wonderful if things didn’t change, but unfortunately, that doesn’t seem to be the way the world works. The fact is, Ecuador is growing and expanding, improving their infrastructure, restoring old colonial Quito, building new airports, etc. One of the main purposes of doing this is to attract foreign investment to bring more money into the country, to improve the economic quality of life for Ecuador residents. I don’t think we can bemoan the fact that their strategy is working, no matter how much we personally dislike it. In six years, I have seen a dramatic improvement in the economic quality of life of many Ecuadorians.

      Unfortunately, most people forget, especially politicians and business people, that there is much more to life than economic advancement. All too frequently with improved economics comes inflating prices, exploitation of natural resources, people working harder to stay even, and loss of life quality that they had before. So for better or for worse, as Bob Dylan said, “The times they are a changin’.”

  9. Richard Wright says:

    When will americans realize that the correct spelling for the country ot COLOMBIA is with two “o”s and NEVER with a “u”? Another thing, residents of Quito are called “quiteños” not quitanos. And shouldn´t be an “economic boom” not boon-just asking?

    • Hi Richard,

      Thanks for the corrections. My brain knows very well the correct spelling of Colombia, but I have not been able to convince my fingers. And I made the change to the spelling of Quitenos, although I do not have a Spanish keyboard so I cannot put the wiggle over the n. Yes, I did mean all the new construction will be a “boon” to northern Ecuador. I think it is the correct usage, meaning the residents will experience an unaccustomed influx of value to their economy.

  10. Hey, Gary! Great newsletter! It’s so nice to get an update on Cotacachi since our “boots” won’t be on the ground until May!

    We’re afraid the little town we thought we were going to may be growing too fast for us. We sure hope it still has the small town feeling. As retired real estate brokers, we also wonder if it keeps growing like this and prices keep rising if the real estate market won’t suffer a correction.

    Guess we’ll just have to get our boots on the ground and find out, right?

    Thanks so much for the update! See you in May!
    Jan and Larry Myers