At least once a month, I’m asked the question: Why are so many homes in Oaxaca not seemingly finished? It is one of the most spectacular sights in this southern Mexican colonial city as well as in the cities on its border and beyond. This phenomenon can be clearly seen when crossing the highways connecting the central valleys.
The brickwork in the houses is finished, but there is no glass on the windows, and it is clear that none of these money cows, who have invested a considerable amount of money, live in the buildings. And even though the houses are finished and settled, the ribbon still stretches from the roof to the sky. Why is it left there by Western standards?
Leaving the reinforced steel bars on top of your roof unchanged means that your home is not finished and you will not have to pay realty taxes. In fact, tax reform began to take effect, at least in the city of Oaxaca and its suburbs, in the early 2000s, when you were assessed at different prices based on your land and the amount of space suitable for your residence. Interestingly, any structure with a concrete roof is considered habitable, and is taxed at a higher rate. Even carports used only for vehicles. You see, many Oaxacans tile their carports and use them for living and entertainment rather than parking, and some residents don’t even have a car or truck. Many residents go beyond the regulation by building a ceiling out of riverbanks called cariso, which keeps their vehicle in the shade and does not have to pay the increased fare. In our case, our concrete roof is only used for our vehicles, so we had to discuss the issue with the tax department.
Since most homeowners are humble, a government-authorized architect will give you the option of visiting your home to calculate the increase or take measurements with the intention of delaying the process. If the latter is chosen, the new fee will only take effect on your death or sale of the home, with penalties, interest and refundable payments to your heirs or buyers. Let’s start discussions! We chose to catch the bull horns, reassess and immediately start paying ten times more than we previously paid, which is still a bargain compared to the amount we pay as homeowners in Toronto, even without the bonus now. Seniors are taxed at the rate (over 60), i.e. 50% of the regular tax rate for principal residence. At the end of the day our daughter inherits a little less to pay transition taxes.
So why back off? Before and after their demise, many Oaxacans had no choice but to offer their children something other than their homes or to place their existing homes where they were located. Thus, building a second or third level into a home is always meditative when funding is available at a snail’s pace and when it is the right time. If you decide to cut the elongated ribbon after your basic construction is complete and then build another level, it will be more expensive; Rather than simply tying the old rebar together, you have to break the concrete to access the hollow beam used for the previous construction. There is another sense of aesthetics, or, more often than not, a focus on economics. So it is wise to leave the ribbon.
Returning to all semi-finished homes, it all comes down to the cost of borrowing in Mexico, and Oaxaca is one of the poorest states in the country with no savings for many residents. Mortgages are only for the uninitiated or the very wealthy (for that matter, buy anything on credit). I have seen interest rates on secured loans as low as 9% and as high as 65%. Regarding the second, a few years ago I was thinking of buying a scooter for our favorite goddess. It will cost us 65% a year to buy on credit.
So, buying when you have cash on hand is the norm. This means that if you want to build on land, you buy 1,000 bricks, then another thousand, then blocks, then ribs and then cement. You hire your bricklayers, and your plumber who is rough on the ground floor installations. You build, then save, then build more. Since there is nothing to steal, you can leave your “obra negra” indefinitely, as it is named, without caring about the theft.
You then have your electrician break down the interior concrete, brick and block, install the wires and connections for the switches and so on. Once those installations and the rest of the house are covered with concrete, again your future dwelling will be protected from destructive erosion and theft (yes, we accept that copper can still penetrate, but cement covering is a bit harder to cover). That’s your “obra gris”. It, too, can then, without attention, be left indefinitely.
The above are the two most common completed stages of housing construction that the city of Oaxaca, its central valleys, and beyond will meet anyone driving roads and highways. All of this makes economic sense and at the same time provides reasonable protection to the homeowner in progress. While it delays the completion of the home, it also prevents it from falling victim to the prohibited rates for mortgage interest.
Family members often provide the labor to proceed with these two phases of construction. However, finishing a home often requires a more specific trade-off, as well as more significant financial outlay. Thus, we find many houses on the “obra gris” platform, which remain there for a decade or more.
The final construction phase will include more detailed and delicate tile work, painting, door and window frames and glass work, finishing touches and plumbing. Especially with regard to the latter, one usually does not leave a semi-finished house unattended in this construction condition, so often hires a night watchman or “Valdor” to ensure safety. Only then is the family ready to move on, and the house seems to be complete in all respects – however, extended into the sky.
So remember, an unfinished home can often be a sign of a family working hard to put everything together for themselves and its individual members, without succumbing to the pressure of borrowing at high interest rates.