Cotacachi Real Estate / Ecuador Cost of Living / Ecuador Real Estate / View from the Roof

A View from the Roof: Ecuador is Changing, You Be the Judge

Linda and I just returned from several months in California where we were present for the birth of our second granddaughter, Sophia Rose.  She made her appearance two minutes short of Christmas Eve.  What a joyful Christmas we had!   The most joyful thing was Linda and I taking turns holding our new family member for hours at a time!

I also spent time working with our son’s white Arctic wolf/German shepherd dog.   I used to train German Shepherds and working with this animal was an almost unimaginable experience.  The wolf is a very social animal, and Kaba, as he is called, is one of the most intelligent animals I have ever experienced.


It was delightful to see him happily and easily learn the commands.  Linda, normally a cat person, is even entertaining the idea that we might have a similar companion in the future.  Sorry, but can’t give you a picture of the new baby.  Privacy issues.

But back to Ecuador, where things are rapidly changing:

INCREASE IN MINIMUM WAGE AND BUILDING MATERIAL INCREASES

President Correa signed into law a 13% increase in the minimum wage from $264/month to $300/month.  This is the second increase in the minimum wage in the last year.  This, coupled with continuing increases in the price of steel and cement, has effectively increased the prices of new house construction by a similar amount.

Pakakuna Gardens, a new development designed by Patricio Falconi and located near the new Quito airport, announced a 15% price increase effective Feb. 1.

Another development, Yanapamba, is increasing building prices from $480/m2 ($44.60/sq. ft)  to $550/m2 ($51.11/sq. ft.).  Many of you are familiar with the Yanapamba I development  on the outskirts of Cotacachi.  This project is sold out now, but with our help the builder recently acquired a stunning 30-acre property for Yanapamba II and is in the process of gaining municipal approval.

NEW DEVELOPMENT:  YANAPAMBA II

We think this will be a wonderful new development, as there will only be 25 houses for sale on the 30- acre property. This means much green space and residential lots up to ½ acre.  There are magnificent views of the Rio Ambi gorge with riding trails and picnic areas.

This, along with a spa/stable/small hosteria complex will provide lots of entertainment possibilities for residents and their guests.
Our real estate company sold 11 properties in Yanapamba I and we are looking forward to representing this extremely desirable new property.  Watch future newsletters for details.

INCREASED TAXES

The government also announced a 5% increase in the taxes for money leaving the country.  Previously, the tax was 2% of the amount of dollars leaving the country.  So be aware:  If you move any of your funds into the country, there will be a stiff penalty if you take them out. Read more about the new law here.

CHANGES IN DEVELOPMENT APPROVAL LAWS

A change was announced at the end of January, 2012, in the Horizontal Property Plan laws.  The Horizontal Property plan is a document that all developers have to submit for approval to the Municipal government prior to the developer’s ability to present buyers with deeds.

This document defines the legal description of each lot, the specifications for buildings, HOA rules and regulations, etc.  Typically, this document was submitted for approval well after the developments were under construction when lots and buildings were already being sold.  It often took 4 – 5 months to gain approval.

The new law says, under penalty of imprisonment, that a developer cannot begin to sell lots until the horizontal plan is approved. This is a very good law in that it will prevent developers from selling lots before all city approvals are in place.

The buyer can be assured that the lot can be legally transferred to the buyer’s ownership immediately.    The law will prevent inexperienced and poorly financed developers from taking deposits on lots before they can legally transfer the property.

ENVIRONMENTAL IMPACT STATEMENTS

All new developments are now required to prepare an environmental impact statement to be submitted to the national Ministry of the Environment before construction or land clearing can begin.  This is an especially good law that will hopefully ensure more preservation of the country’s fragile natural beauty and prevent devastation of the landscape.

In Cotacachi recently, a new expat developer associated with the new Re-Max Real Estate office bulldozed and clear-cut a large tract of steep, mostly wooded land above Cotacachi on the environmentally sensitive slopes of the foothills of Volcano Cotacachi. The residue was pushed into natural drainage gullies and canyons.  The land is located above the pristine spring that provides Cotacachi’s drinking water.

Part of this property appears to be in the Cayapas-Cotacachi National Reserve and is in an indigenous area.   No permissions were sought or secured prior to the clear-cutting.  Frankly, I would hate to be in the shoes of those responsible for this.   It was reported that angry local indigenous leaders met recently with city government officials to protest this activity.  More on this in future newsletters.

PERSONAL CHANGES

Linda and I have decided to close our real estate office on Gonzales Suarez.   This will allow our associate Dale Oelrich and me to devote more time to our real estate tours and to personal consultations with those who are serious about purchasing real estate in our area.

Yes, Ecuador is changing and we are changing with it.  At the end of this month, we will move from our apartment on Calle Bolivar to a 3-story house a few blocks away. A nice room is situated on the top floor, so I can continue to write my “View from the Roof” from a high vantage point in Cotacachi, even though I will not have the wonderful downtown vistas.

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

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26 Comments

  1. Thank you, Gary for the updates – all are very interesting. We were in Cotacachi in December and the bulldozing was going on then and there were rumors then that this was not done correctly. Yes, the gringos were very arrogant, but I also wonder why it took so long to stop them when it was in clear sight? So unfortunate and hopefully the wonderful gringos who are making Cotacachi their home will find ways to be very proactive about what it going on.

  2. Thanks for the informative news as usual. I am so angry at these selfish, self absorbed, money hungry, un-educated Americans who just take it upon themselves to come into this beautiful country and CLEAR CUT in sensitive areas with no regard for nature, enviroment, or the nationals!!!! Grrrrr!!! I hope they are HEAVILY fined and go to prison for a VERY LONG time!! THEY DESERVE IT!!!! Have a nice day! :)

  3. Good update, Gary. I wasn’t aware of the construction increases.
    Also I had heard that it was a requirement that you ask permission to cut down trees, even on your own property. Our mutual friend from Quito told me about it. Have you heard of this law?

    • Yes. Apparently there is an office in the municipio that one needs to ask. Best to start at the planning department. They will let you know where to go.

  4. Steve Juniper says:

    Can you please publish a link or citation to the new change in law regarding horizontal property sales? Thanks much.

    • No I can’t. I was told the information by a large well-connected housing and industrial developer and builder. I suggest you talk to an attorney and ask them to follow up on the law.

  5. Hello Gary and Linda,

    Sorry if this is too far off-topic but so far I have only been a lurker, lapping up your accounts but not yet ready to take the plunge.

    I see that you offer PayPal as an option for your tours. I, too, would like PayPal as a payment option for my internet business if/when I move to EC.

    Do you have a PayPal account registered in Ecuador? If so, do you have to form an EC company? Can you attach it to an EC bank account, or only to a US one? In Europe, PayPal’s ever-changing terms and Big Brother antics increasingly make it a pain to do business with them… (E.g., If you travel and login to PP from a country other than the one you and your company are “resident” in, and it is now required that the country be the same, PP considers it a red flag and reacts with hassles and sanctions…)

    I would be very grateful if you would/could relate a bit about setting up and running an internet-based business in EC – or point me to sources of actionable information.

    • Hi Joan,

      So far, we have had no problems with PayPal. Our PayPal is linked to an account in the states. I don’t know if it is possible to hook it up to an account here in Ecuador. I have never explored that possibility. We have formed an Ecuadorian Company for our real estate business.

  6. Yah, it does seem that every other gringo is suddenly a real estate agent, since there are no requirements to being a real estate agent. Can’t blame the ones who are here without pension and have to find a way to make a living. You have to be creative to make a living in a foreign country where one doesn’t speak the language that well.

  7. Dear Gary…
    What could be done NOW…to put the kabash on this terrible disaster of clearcutting..perhaps before it goes any further??,( Im here for a few more days and will gladly draft and set in motion! GRRRR!)
    Its bad enough that the communities here have sustained so much change, but to do so in this detestable, ugly and disrespectful way is unconscionable..I dont know the owners but I would say they should be fined and have to plant all new trees etc .
    Very sad indeed…
    Best in your new ventures, and lets do a wake up call about this if poss..

    • Hi Lulie,

      Actually, the owners are replanting trees on the property that are better than the Eucalyptus that they tore out. So I have faith that some day, the land will be better than it is now. Certainly the government is now aware of the situation and I expect they will respond in some capacity. Karma has a way of working itself out.

      Rather than try to exact revenge, I think we can all use this experience as a lesson that before we (as gringos) jump into a community and try to do something grand, we should sit back for awhile and learn about our new home and consider the impact of our potential actions upon the greater community. Life is not all about financial profit. In fact, given the comments of some of the readers about what happened in Panama and Costa Rica, unless we all raise our awareness of the culture we have moved into, our life here in Cotacachi could fairly quickly turn into a living hell.

      When Linda and I began our project a few years ago, we prepared a very detailed plan with input from local professionals and from members of the community. Then we visited all three indigenous villages that are near our property and explained to them what we wanted to do. We solicited their opinions and input, then asked them if they endorsed our efforts. We were graciously received, and many people afterwards thanked us for considering them in planning. And almost to a person, they loved our plan, even though they initially asked very hard questions and were skeptical.

      While we have been very slow going with our sustainable project, even now, occasionally when we walk downtown, an indigenous will come up and ask us how our project is going.

      We were very graciously received, and made many friends. And it was one of the best intercultural experiences I have ever had.

  8. Mark Hayvren says:

    Gary,enjoy reading your up to date news on what’s happening in your area.With refards to real estate agent appears they are following suit with the one’s in Costa Rica…..which after 4 visits we decided not to buy or return!!

  9. Pingback: Morning Update – Thursday, February 16, 2012 « South of Zero

  10. A lot of changes in Cotacachi. Lulie’s there now, having work done on her house. She’s disgusted by that clearcut up on Cotacachi.

    I heard also that the assisted living development has gone the way of the dodo and passenger pigeon.

    With what seems like every other gringo becoming a real estate “agent,” I think you’re making a wise decision to get out of the business.

    Best of luck to you and Dale. And I hope you and Linda find the perfect dog!

    • Hi Jeff,

      Thanks for your comments. Regarding Hacienda de Las Flores, lets for the moment say that it is going through a transition. We will have more to report on that in a couple of weeks.