Mexican congressmen voted on Tuesday to change a law that makes it difficult for foreigners to own beach homes in Mexico.
The law prevents any foreigner from directly owning a home that is located within 50 kilometers of Mexico's coasts. Foreigners in Mexico are also banned from owning homes that are located within 100 kilometers of the country's international borders.
Congressmen from Mexico's house of representatives argued that the law was "outdated," that it hampers investment in the country, creates unnecessary bureaucracy and no longer matches reality.
They pointed out that thousands of Americans and Canadians already own beach homes in Mexico anyways, and many more are interested in buying.
But currently, foreigners who want to have coastal properties in Mexico need to acquire these assets through Mexican companies or real estate trusts in which a local bank buys a property and then "leases" it to its foreign occupant for an annual fee. A report that was compiled by the Mexican congressmen who support this legal shift said that, between 2000 and 2012, about 49,000 foreigners bought homes in "restricted areas," by going through these legal loopholes.
"What we are trying to do is to eliminate this simulated form of property owning in Mexican beaches, and eliminate middlemen who have profited from the current prohibitions, (on foreign ownership)," said congressman Manlio Beltrones, one of the main sponsors of this legal shift.
"We want to facilitate investment in tourism, and generate jobs," Beltrones added.
Some congressmen in Mexico are worried that Beltrones' proposal will make it easier for foreigners to take up lands that are currently used by fishermen and other rural populations.
The Union of Peasant and Indigenous Forces, a human rights group, also criticized the proposal, saying that it could allow foreigners to "buy up the best land," and could eventually lead to real estate speculation that would drive poor people away from coastal areas.
But supporters of the proposal said that some parts of Mexico could really use the money spent by people who buy beach front homes. They estimate that, on average, a foreign couple that owns a beach home in Mexico, spends somewhere from $3,200 to $4,300 per month, while they are in the country.
The law that prevents foreigners from owning property along the coast was created in 1919, right after the Mexican revolution. Its purpose was to keep strategic locations out of the hands of foreign countries with an interest in invading Mexico. But nowadays, most Mexican politicians feel that foreign ownership of beachfront properties no longer poses this kind of security risk.
The Mexican Senate, and the President of Mexico must now vote on this proposal for it to pass. Because this proposal would strike down a law that is part of Mexico's constitution, it must also be approved by a majority of Mexico's state legislatures.