Ruling Sparks Land Debate in Honduras

February 11, 2005

TEGUCIGALPA – A Supreme Courtdecision to uphold a controversial lawallowing foreigners to own coastal propertyin Honduras has rejuvenated an age-olddebate over land rights and development inthis impoverished Central American nation.On Jan. 7, Honduras’ high court rulednine to six to uphold the 1990 propertyacquisition law (known commonly as“Decree 90/90”), which permits foreignindividuals and organizations to owncoastal property.The law allows foreigners to purchaseunlimited amounts of land for pre-approvedtourism use, and up to three-quartersof an acre for personal use. Butmany of Honduras’ 6,200 foreign residentshave circumvented the restrictionby purchasing land in the name ofHonduran family members or a Hondurancorporation.CRITICS of Decree 90/90 argue itviolates Article 107 of the Constitution,which stipulates that all property within40 kilometers of the coastline, as well asisland property, can “only be acquired orowned by natural Hondurans, or societiescomposed entirely of Honduran members.”That land, according to the specificationsof Article 107, accounts for some63,200 square kilometers of the country’smost attractive real estate, and 56% ofHonduras’ total landmass.Last year the debate over the constitutionalityof Decree 90/90 made its way tothe Supreme Court, which last month ruledto uphold it on the basis that Article 107provides for future “special legislation”regarding coastal properties.The tourism and industrial sectors arehailing the court’s decision as a victory anda breakthrough for foreign investmentpotential.TOURISM Minister Thierry dePierrefeu lauded the decision as a boon forHonduras’ tourism industry, which lastyear generated a record-high $410 million.Tourism is now Honduras’ third-mostimportant source of foreign income, and isconsidered a cornerstone of the country’sdevelopment strategy.“The most important thing for attractingforeign capital is to have legal security,”De Pierrefeu said in his praise for theSupreme Court’s decision.“It’s clearly to the benefit of the country,”agreed Benjamín Bográn, executivedirector of Honduras’ National Council ofPrivate Enterprise (COHEP). “It’s going togive the last push needed to promote foreigninvestment here.”Real estate prices are still relativelyaffordable in Honduras. A quarter-acrewaterfront lot on the Bay Island of Roatángoes for around $25,000, and full-serviceluxury island condos sell for $300,000.Coastal property in lesser-developed areasis even less expensive, according to realtors.BUT not all Hondurans are celebratingthe court ruling.Opponents argue that most of themoney generated from increased foreigninvestment will go straight into foreignbank accounts, bringing little benefit toimpoverished area residents.“With these laws there’s always a backgroundof wanting to take land away fromthe community,” said Karen Vargas, legalconsultant for the activist non-governmentalOrganization for Ethnic CommunityDevelopment (ODECO), which workswith Honduras’ Garifuna and Black populationson the Caribbean.Honduran columnist Guatama Fonseca,of the daily La Tribuna, approaches the lawwith a class and race-based analysis. Hewrote in a Jan. 17 editorial: “(Supporters ofthe 90/90 law) want to have the necessarylegal tools to dispossess the poor and theblack communities of the Atlantic coast ofproperty that belongs to them.”STILL others claim coastal dwellerswill embrace outside dollars and increaseddevelopment. An injection of new capitalwill result in progress, they insist.“When [my husband] and I travelthroughout Honduras, we see towns andvillages in need of help and people withoutwork,” said Janine Goben, theHonduran correspondent for InternationalLiving, an online real-estate magazine.“But we don’t see that in areas whereinvestment is happening. In those areaswe are greeted happily by local people,who are delighted to see foreigners enjoyingthe country, buying their products andusing their services.”Plus, she added, no one is forcingHondurans to sell their property to foreigners.“Honduran people who have sold theirland to foreigners could have just as easilysold it to Hondurans,” Goben said.ODECO’s Vargas concedes thatTourism’s rapid growth in recent years onthe Bay Islands and the Caribbean Coasthas provided important jobs for unskilledlaborers.However, she insists, the Garifuna andCaribbean black populations have beenexploited for their cultural interest, whilebeing excluded from the planning ofHonduras’ tourism strategy.“What we’re opposed to is being seenjust as exotic people who have our picturestaken and dance for tourists,” she said.“The communities ought to participate aspartners in the development of tourism.”

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