This article is the follow up to a short piece on development in the Costa Ballena region of Costa Rica, where I live. Please check it out for context!
There is a predictable expat growth cycle in areas like the Costa Ballena, Costa Rica and understanding it is critical if we want to recognize opportunities for growth, development and, most importantly, the kind of place it will be to live for both expats and locals alike.
The first stage of the expat growth cycle attracts adventurers and risk takers who are looking for something substantially different from where they come from. Often this includes a desire for clement weather, specific geography (like beaches or mountains) and looser rules and regulations. In this early stage it is not uncommon to find people escaping personal demons, debt or family. Very few adventurers stay long and those that do often start families and make the effort to learn the local language and traditions, whether they participate or not. At this stage locals are greatly unaffected by the expat presence outside of bad behaviour and tourist specific activities.
The second stage attracts pioneers (and remaining adventurers) who can see the future potential of the area and are willing to adapt to foreign and often difficult conditions to take advantage it. In for the long-haul, Pioneers do what it takes to make sure their investment is secure and are quick to acclimate and work with local people. This creates strong bonds in the community however, because most locals don’t have the same long-term perspective, it is not uncommon for some to feel taken advantage of. Overall it marks the grassroots beginning of new economic development in the area.
The third stage of the cycle attracts early adopter investors and pensioners looking to get more for less. Real estate, tourism and development projects become a significant part of the economy attracting more and more tourists and a growing demand for the kinds of homes, food, products and services expats are used to back home. This demand creates an increasingly viable english-centric market for expat entrepreneurs while more labor-intensive services are left to local entrepreneurs. More often than not this begins a class divide that will cause friction in the future if not anticipated with easily accessed language classes, entrepreneurial education and the kind of practical skills development (apprenticeships and internships) that allow a greater number of locals to participate without being relegated to the labour and service industry.
The fourth stage brings in the Me-Too’s, people who have had enough of life back home and just needed to see someone they know make the jump first. Depending on their tolerance for risk, these folks will generally buy homes rather than build and are sure to take full advantage of the businesses and services offered by early adopters and well-established pioneers. Because of current demographics and the fact that few expats have the right to work, most Me Too’s will be near or in retirement. This forth stage is also when expat communities develop a habit of not learning the local language, which can create great frustration for both locals and expats alike. Meanwhile the economic impact of the expat community begins to benefit a wider segment of the community with restaurants, hotels, supermarkets, home supplies and professional services such as doctors, nurses, veterinarians and lawyers gaining the most share.
The fifth stage begins when just about everything an expat was used to at home is now available here- for mainstream folks it’s like living back home but in a better place. At this point the expat community is large enough that they rarely have to interact in the local language and land value and cost of living may approach what it was back home. On one hand this will cause many pioneers and early adopters to move on to the ‘next place’. On the other hand, constant reports of warm weather, rich geography and the allure of living in paradise will attract mainstream expats of all ages. This age diversity will be met with interest by an increasing number of wealthy nationals and expats from other Latin American countries. From this point forward wealth and privilege are the prevailing factors, which will drive more upscale development and the eventual segregation of the poor.
Considering the current state of affairs and the number of new homes and projects planned and in development, the Costa Ballena region is currently in stage three of the expat growth cycle with some overlap on either side. The transition from stage three to four will begin in earnest over the next five years.
Perry Gladstone is an Advisor, Coach, Mentor and full-time resident of the Costa Ballena.