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Phoenix executives build housing in Mexican town


Catherine Reagor
The Arizona Republic
Aug. 16, 2005 12:00 AM

Phoenix developer Irene Carroll had to figure out how to put up several clotheslines in a small subdivision.

It's not a problem the vice president of DMB, known for upscale golf developments such as Scottsdale's DC Ranch, had dealt with before. Carroll's day job is to develop the 1,000-acre Marley Park in Surprise, but a few times a month she takes a small plane or makes the four-hour drive to Agua Prieta, Mexico, to work on another project.

She and other executives from Phoenix - the U.S. capital for home building - are giving time and money to build an affordable housing community in Agua Prieta, a border town south of Douglas, Ariz.

Clotheslines are a necessity in Mexico, where clothes dryers are rare because electricity is costly. But decent affordable housing is an even pricier commodity.

At least 1,000 families have lined up to buy one of the 42 new brown-and-terracotta stucco homes in the 3.2-acre development called Vecinos, which is Spanish for "neighbors." Houses there are selling for $20,000, or less than 10 percent of what a typical new home costs in the Valley.

The monthly payment on one of the 700-square-foot homes in Vecinos is $85, almost half of what most families pay to rent a one-room shack on a dusty dirt lot in Agua Prieta. That shack may not have indoor plumbing or electricity. Vecinos homes have two bedrooms, a bathroom, a kitchen with appliances, vaulted ceilings, ceramic tile floors, ceiling fans, patios and landscaping.

A laundry room and computer center have already been built for Vecinos. A day care center and park are under way. "We want to build a community for Vecinos residents and not just shelter," Carroll said.

So far, 28 families have moved into Vecinos. Francisco and Margarita Salinas and their three children got the keys to their new home last year. Like all buyers in Vecinos, the family went through an extensive review process that included interviews and employment checks. The family must rent for a year, without missing a payment, before they get a deed and a 20-year mortgage for $20,000 that carries no interest payment. The houses actually cost $26,000.

"We aren't giving away homes. We are trying to help people build a community," said Valley real estate investor Gil Gillenwater, who has been making the trek to Agua Prieta regularly since 1987. He and his brother started the Rancho Feliz Charitable Foundation, Vecinos' developer.

Five years go, Gillenwater recruited Carroll to oversee development of Vecinos. Several well-known Valley executives and companies have donated money and materials for the houses. JDA Software Chairman Jim Armstrong and DMB principal Bennett Dorrance have both donated funds to build houses and the use of their private planes for volunteers. Planner Ronald Krater, who worked on north Scottsdale's golf development Desert Mountain and DC Ranch, helped design the Vecinos.

Gillenwater, Carroll and others involved with Vecinos visited the Salinas family in their former home, a two-room house that shared a bathroom with another home. Parts of the ceiling were made of water-damaged cardboard. Electrical wires were exposed.

The Salinas were paying 1,750 pesos for their home. That's about $165 a month. Francisco Salinas had to work seven days a week at an auto parts store.


Decent housing


Mexico is in the midst of a housing crisis. The country's president, Vicente Fox, has set a goal of building 3 million homes for low-income families. But as Vecinos developers have found, building homes in Mexico is a slow and trying process.

Unlike a Valley subdivision, which could be completed in a year, Rancho Feliz has taken six years to build. Getting utility lines and roads completed and clearing the title for land is much more difficult in Mexico. To build Vecinos' infrastructure and landscape, Carroll had to find the heavy equipment needed to dig and grade the land for sidewalks, a park, trees and clotheslines. Bulldozers are a rare and expensive commodity in Mexico.

Scottsdale-based Rummel Construction donated a crew and the equipment. But because of work laws, Carroll had to get the workers and earthmovers across the border and back within a day.

The rest of Vecinos is being built by local workers, residents and volunteers.

Most houses in Mexico are built by individual owners because of a lack of financing and home builders, according to a recent study by Harvard's Joint Center for Housing Studies.

The typical Mexican home mortgage carries a 35 percent interest rate. So, many people stake out home sites and build a block home wall by wall as they can afford it. Some houses take years to complete and still don't have electricity.

Last year, the National Association of Home Builders signed an alliance to help Mexican builders construct more affordable homes.

Agua Prieta's population has grown rapidly during the past 20 years. Now, almost 200,000 live in the border city. Economic refugees from South and Central America have spurred part of Agua Prieta's growth. But as many as 50,000 of the city's new residents are only there temporarily, waiting to cross the border in search of better-paying jobs.

A laborer earns $4 a day in Mexico. The same worker can make $8 an hour in Phoenix doing construction, landscaping or hauling materials in one of the area's many new subdivisions.

But many who cross the border leave families behind, who live in "temporary" homes built with whatever materials they can find, cardboard, aluminum siding and tarps. Mexico's municipalities can't keep up with growth, so most of these "cardboard houses" don't have water, sewers, electricity or paved roads.

Rancho Feliz is trying to help those left behind and encourage others to stay and build their own community.

Gillenwater said the model for Vecinos can be replicated across Mexico. Several groups have already asked for the development's plans.


Building a community


Like most new Valley subdivisions, Vecinos has a home owners association to make sure the community thrives.

To fulfill the HOA requirements, families must donate 400 hours of community service to Vecinos, children must attend school until they finish high school, monthly payments must be paid on time, properties have to be kept up and only residents' immediate family can live in the home so houses aren't overcrowded.

The computer center was funded by a program sponsored by the Mexican government. Computer and English classes are taught for both adults and children.

Adult residents of Vecinos are required to take computer courses, and several have completed work to get the equivalent of a Mexican high school diploma. Residents who work in factories can make more money if they have a diploma.

"Charity is a tricky business," Gillenwater said. "We want to nurture people and not stifle them through handouts."