I am asked the question at least once a month: Why are there so many houses in Oaxaca that have been started and are apparently unfinished? It is one of the most notable sights in this southern Mexican colonial city, as well as in the towns on its outskirts and beyond. The phenomenon is clearly visible when traversing the connecting roads along the central valleys.
The brickwork of the houses is finished, but there are no panes on the windows, and otherwise it seems obvious that nobody lives in these sources of income, buildings in which a considerable amount has obviously been invested. And even if the houses are finished and inhabited, the rebar still extends skyward from the roofs. Why is it left there, an eyesore by Western standards?
It is a fallacy that leaving the reinforced steel bars on top of your roof intact means your house is not finished and therefore you do not have to pay property taxes. In fact, at least in the city of Oaxaca and its suburbs, a tax reform began to be implemented in the early 2000s, whereby you were taxed based on both your land and your living space, at different rates. Interestingly, any structure with a concrete roof was considered habitable space and therefore taxed at the highest rate. Even a garage used only for vehicles. You see, many Oaxacans tile their garages and use them more for living and entertainment than parking, and some residents don’t even own cars or trucks. Many residents get around the regulation by building a roof made of river cane known as reeds, thus keeping their vehicles in the shade and without having to pay the higher rate. In our case, our concrete roof is used only for our vehicles, so we had to negotiate the issue with the tax department.
Because many homeowners are poor, you are given the option of having a government-licensed architect come to your home to take measurements to calculate the increase or defer the process. If you choose the latter option, the new rate will only take effect upon your death or sale of the home, and any penalties, interest, and back taxes will be passed on to your heirs or buyers. Let the negotiations begin! We decided to take the bull by the horns, do the reassessment, and immediately started paying about ten times what we had been paying previously, still a bargain relative to what we were paying as Toronto homeowners, even without the bonus. now. paying taxes at the rate of the elderly (over 60 years of age), that is, 50% of the usual tax rate of the habitual residence. At the end of the day, our daughter will inherit a little less to tax the transition.
So why the rebar? At the time of his death and before, most Oaxacans have little to offer their children other than their homes, or better put them where their current homes are. Therefore, the construction of a second or third level in a house is always in the contemplation, when the funds are available in the space of a snail, and when the time is right. If you cut the tensile rebar at the end of your initial build and then decide to build another level, it’s more expensive; Instead of just tying it to the old rebar, you need to break through the concrete to access the bare rebar used in the old build. There is a different sense of aesthetics or, more likely, a priority placed on economics. Therefore, it is prudent to leave the reinforcement bar.
Going back to all those partially completed houses, it all comes down to the cost of borrowing in Mexico and the fact that Oaxaca is one of the poorest states in the country with most residents having no savings. Only the not astute or the very rich have mortgages (buy anything on credit, really). I have seen interest rates as low as 9% and as high as 65% for secured loans. Regarding the latter, a couple of years ago I was thinking about buying a scooter for our favorite goddaughter. Buying on credit would have cost us 65% per year.
Therefore, the norm is to buy when you have cash on hand. This means that if you want to build on land, you buy 1,000 bricks, then another thousand, then blocks, then rebar, then cement. You hire your bricklayers and your plumber who roughs up the underground installations. You build, then you save, then you build more. You can leave your “black work” as it is called, indefinitely, without fear of theft because there is nothing to steal.
Then you can have your electrician break down interior concrete, bricks and blocks, to install wire and connections for switches and the like. Once those fixtures and the rest of the house have been covered in concrete, again your future abode will be secure from vandalism and theft (yes, recognizing that the copper is still accessible, but it’s quite difficult with the cement covering it). That is your “gray work”. It can also be left, unattended, indefinitely.
The above are the two most common completed stages of home construction that one encounters while driving the roads and highways around Oaxaca City, its central valleys, and beyond. It all makes economic sense while offering the current homeowner a reasonable degree of security. While it delays the completion of the home, it avoids burdening you with prohibitive mortgage interest rates.
Family members often provide some of the labor needed to move these two stages of construction forward. However, home completion often requires more specialized trades and, along with that much more significant financial outlay. Therefore, we find many houses in the “gray work” stage, remaining there for years, if not a decade or more.
The final phase of construction includes finishes such as finer and more detailed tile work, painting, window and door frames and glazing, electrical fixtures and plumbing fixtures, etc. Especially with regard to the latter, a partially completed house in this state of construction is not usually left unattended, so most of the time a night watchman or “watchman” will be hired to ensure security. Only then will the family be ready to move in, and the house will appear complete from all outward appearances, but with the rebar stretching skyward.
So remember, an unfinished house is probably a sign of a working family struggling to put it all together, for itself and its individual members, without giving in to the pressure to borrow at an often exorbitant rate of interest.