SAN MIGUEL DE ALLENDE — A favorite destination

By Rodrigo Cervantes/KJZZ

SAN MIGUEL DE ALLENDE — A favorite destination in Mexico for American retirees and tourists is San Miguel de Allende. The increasing influx of travelers to this small, colonial town in the center of Mexico is bringing with it a growing demand for real estate, and also concerns for the fate of the city’s natural and historical legacy.

Downtown San Miguel has a bohemian, but quite a cosmopolitan vibe in its restaurants, cafés, and bars. For decades, this historic place has attracted travelers and immigrants that have helped create this atmosphere.

The town currently has 170,000 inhabitants, and nearly 8 percent of them are foreigners — the vast majority, American retirees. But more recently, San Miguel de Allende has become a hotspot for younger expats with home offices, premium Mexican tourists and investors with strong buying power.

“There are a lot of people in their mid 20s and 30s bringing their family and raising their children here,” said Teri Kavanagh, a Los Angeles native currently working as a liaison with the foreign community for the city’s government.

Kavanagh thinks that American immigrants come for a more peaceful and less expensive lifestyle.

“I definitely think is less stressful, more family oriented. And you get more for your money, and you get more quality of life for your money,” she said.

But Kavanagh also notices the rising prices of property. Whenever a city becomes popular, real estate goes up, she said.

And as the popularity increases, fewer homes become available, explained Maryanne Allen, a sales associate at Agave-Sotheby’s Realty in San Miguel.

 “We see not as much inventory available; it’s getting better with all the building and everything, but the inventory is low, and the demand is high,” said Allen.

San Miguel’s New Face

The new constructions that Allen refers to are mainly on the outskirts of San Miguel de Allende, where a mall and golf courses are bringing a new face to the once-bucolic area.

In the hilly southwest part of the city sits a 120-acre lot with views of the old town called “Colinas de San Miguel.” Janielle Penner from Phoenix is an international real estate broker managing the project.

“We know that the market in Phoenix is quite hot, and actually, we know that the same is true here, in San Miguel,” Penner said.

Penner said they don’t want to build a project for the second home market, as they see the potential of bringing the “live/work” concept with premium houses and even a luxury hotel designed by a prestigious architect.

“We’re really excited about this potential project, as San Miguel happens to be in the heart center of Mexico,” she said.

Penner thinks the new developments and population growth in the area are challenging, but it’s also helping improve the region and the market.

“I think the problem and the opportunity kind of go hand in hand,” she said.

But the growth of the city and the real estate boom have become a serious concern to some local leaders.

Preservation And Growth

Guillermo González Engelbrecht is the director of the San Miguel de Allende Tourism Board.

He proudly describes the buildings surrounding San Miguel’s central square: the house of Ignacio Allende, the first soldier of the country, the historical homes turned into restaurants and museums, the city council, which is the first city council of independent Mexico, the emblematic neo-Gothic style parish church.

These pink limestone constructions are the main reason why the United Nations Educational, Scientific and Cultural Organization (UNESCO) designated San Miguel’s old downtown as a world heritage site, a nomination that has brought big responsibilities.

 “Well, I wish we got money! No money, but we got obligations,” González said.

He said the 64 blocks protected by UNESCO need to be carefully preserved: for example, using certain kinds of traditional floors, applying only certain terracotta colors, leaving facades and buildings intact, avoiding modern signs.

But many homeowners decided to sell their properties or transform them into businesses.

“People see that there’s money in this town, and they want to make big business, and it’s not usually the best for the city,” González said. “We love San Miguel, we love the way it is, and we want to keep it like this.”

The local authorities decided to temporarily block anyone from selling, buying or remodeling downtown properties while new regulations come in a few months. New research will help set up limits to the growth of San Miguel.

The expansion of the city is unsettling, and the authorities want to control it. Water supply and visual noise brought by contemporary constructions on the surrounding hills could become a problem.

“That’s actually the biggest problem we’ve had,” González said. “We had two administrations from the government before that let that happen, and we don’t want it to happen again.”

Richard Shaw is the Phoenix developer that co-owns the Colinas de San Miguel lot. He said they’ve been filing the proper paperwork, including documents to preserve ancient Otomí ruins that fall into their land.

Shaw wants to start building this year and is still working to find a local partner. The developer thinks Mexican businesses are relationship-driven, which could be an inconvenience sometimes, but not an obstacle.

“You know, there’s politics, so if you don’t have relationships, or have bad relationships, it will affect how you’re gonna succeed,” Shaw said.

And while Shaw and other investors bet on the prosperity brought by the boom of the realty market, locals wait for the new guidelines to protect their town’s history and nature.