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As a growing number of retirees face financial insecurity, what impact could those who move abroad have on lower-income communities?

Retirement is changing. Not only are a growing number of people facing greater financial insecurity as they approach retirement. They are also aging in a cultural context that validates travel, adventure, and the pursuit of new experiences people may not have had time for while they were working.

Retirees from the United States and Canada are an important part of the demographic that has seen worldwide international tourism arrivals double in just over 10 years.

Harry and Sophie, both in their 60s, illustrate one of the new types of travel—lifestyle migration—that has become popular in recent years, and that is having an important impact on lower-income communities. The couple, both previously married and from different parts of the United States, moved to Ecuador so they could retire.

As Harry put it, you should “always try to live on the means that you have available to you.” He didn’t want to run down what little savings he had left, partly because of an expensive divorce. “[M]y wife ended up with the house. My daughter ended up with the condo,” he said. “And he got me!” Sophie piped in with a broad grin.

The couple were good humoured, fun-loving, and found a group of like-minded and sociable fellow “expats,” who had also migrated from the United States shortly after the financial crisis. As Harry put it, “the group of people that we met, right away, became such a family.” Many of them were looking for “another adventure”—as one Canadian woman put it—before they moved to “the other side of the grass.”

Harry and Sophie are like a lot of financially less secure American retirees, whose ability to leave the job market and share in middle class retirement experiences, such as travel, is premised on being able to migrate to lower-cost countries, further down the international pecking order, where the cost of labour is cheaper. Jennie, 63 from Houston, worked as a bookkeeper. As she said, “the necessities to live, are much, much cheaper than in America, food especially. And rent.”

Since the economic crisis in 2008, perhaps as many as 10,000 Americans and other citizens of high-income countries, have relocated to Cuenca to retire. They are joined by thousands more who cycle through, checking the city out within an expanding circuit of Latin American heritage cities being reclaimed by higher income global social classes. In the process, lower-income locals, especially informal workers and recent rural-to-urban migrants are being displaced and excluded from city centres.

Spawning a Housing Boom

Cuenca’s “El Centro” neighbourhood is the historic centre of the city, recognized by UNESCO as a World Heritage Site in 1999. North American retirees find its historic urbanism attractive for its walkability and its ‘mom and pop’ shops, that remind them of a nostalgic American past.

Harry and Sophie, like many others I spoke with during my research, enjoyed this aspect of the city. “You could actually walk from any place in this town that you really want to.” This urbanism—increasingly gentrified and expensive at home—was what sold them on moving to the city.

One might assume that Harry and Sophie’s higher incomes would help boost the local economy, and in part, they do. But they also participate in unequal social relations that they know little about, and in histories of urban transformation that favor some groups more than others.

Cuenca is a highly unequal city. Its historical architecture is the product of its landed elites, whose fortunes were attained through the exploitation of land-poor and often indentured peasant workers up to the late 1960s. As those landed elites abandoned their “colonial-style” city for American-style suburbs, El Centro became a destination for rural-to-urban migrants who lost out in the land reforms, and who had long used the city’s streets and plazas to sell produce or small manufactured items in order to supplement meager incomes.

The arrival of higher-income Americans and Canadians has changed the meaning of these spaces yet again. No longer seen as out of date, public buildings and private residences are being upgraded, and streetscapes that used to cater to lower-income rural-to-urban migrants are now changing over to higher-income forms of leisure and consumption. Today’s wave of socializing retirees mostly benefits entrepreneurs who can cater to their tastes and needs.

Harry and Sophie sought out condos in nearby “Gringolandia”—the ethnic enclave of American and Canadian migrants, most of them white and retired. The influx of North American retirees has provided steady demand for an expanding condo construction industry mostly owned by wealthy, landed elites, who sell investment properties to higher-income Ecuadorian professionals or foreign real estate speculators.

This is exactly how Harry found out about Cuenca: he met a man from Cuenca who sold real estate in New York. “He had some new structures being built.” Since American retirees don’t know local prices, they appear to play an out sized role in changes to local housing prices.

The transnationalization of real estate markets may be a boon to those who own real estate, but just as in North American cities, higher income foreign demand has spawned rising housing costs for local Ecuadorians whose wages have mostly not significantly increased.

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