Fueled by a nationwide housing deficit, strong demand for homes among Mexico’s young and emerging working class, government mortgage lending programs, and a growing mortgage-backed securities market, Mexico’s low-cost housing sector continues to flourish.  Mexican homebuilders Desarrolladora Homex, S.A. de C.V. (NYSE: HXM) and Corporacion Geo, S.A.B. de C.V (GEO.B:MEX) are two of the major players in the sector, which generally focuses on mass producing homes that sell for less than US$40,000.  The Mexican housing industry expects the sector to grow by 15% over the next few quarters, according to a Reuters report.

The left of center Democratic Revolutionary Party (Partido de la Revolucion Democratica – PRD) announced today that it will disclose its proposal for reform of Mexican energy laws on Wednesday, July 30, 2008, according to today’s El Financiero.  The PRD proposal will likely be grounded in preserving Mexico’s ownership of oil and gas resources and keeping all of the profits derived from such resources within state oil monopoly Pemex.  Unlike the competing proposal of the Institutional Revolutionary Party (Partido Revolucionario Institucional – PRI), which I discussed in a July 23, 2008 post and which also gives Mexico full ownership of Mexico’s mineral resources, the PRD plan will probably disallow foreign investment in Mexican oil and gas exploration. That would be a mistake, particularly since Pemex is ill-equipped, both financially and technologically, to develop Mexico’s remaining reserves.

Pemex said yesterday in a Bloomberg report that it may drill for for oil outside of Mexico (for the first time in history) if Mexico’s Congress does not approve Pemex’s hiring of foreign partners for Mexican offshore projects.  The laws prohibiting Pemex from entering into partnerships with foreign investors do not apply outside of Mexico.  Pemex does not have the technology to drill in water deeper than 500 meters (1,640 feet), a meager depth by current standards.  According to the Bloomberg article, Pemex has received an offer from Brazil’s state-controlled oil company Petrolero Brasileiro, SA to explore the El Perdido Foldbelt of the Gulf of Mexico and Pemex jointly owns the Shell Deer Park refinery near Deer Park, Texas with Royal Dutch Shell Plc.

Another U.S. developer, Baja Properties, LLC, is seeking to bank on the throngs of Americans buying property in Mexico for retirement and vacation purposes in Baja California with a new project near La Paz.  According to the project website, the company and its Mexican subsidiary, Mesa Verde Corp, S. de R.L. de C.V., have entered into an agreement to acquire and develop 500 acres of land and the subsidiary has closed its acquisition of 125 of those 500 acres.  The developer is also active in the virtual real estate market: it bought the bajavillas.com website to help market the Mesa Verde project.  Property sales are expected to began in Q1 2009.

La Paz is just over 100 miles south of another relatively new and impressive Baja California development called Loreto Bay, located on around 8,000 acres adjacent to the hamlet of Loreto on the east coast of the Baja peninsula.  Loreto Bay bills itself as the “largest sustainable resort community under development in North America” and even has a Director and Vice President of Sustainability.  There are plans for a golf course, desalination plant, a wind farm, and solar powered buildings.  Sustainability may not be an option: Loreto is in the middle of the desert.  The project appears to be well-financed; investors include Citigroup Property Investors (CPI).  Homes and condominiums range from US$350,000-$900,000+.

The Institutional Revolutionary Party (PRI) today released its new proposal for reform of Mexico’s energy laws.  As reported in El Financiero, the PRI’s plan would allow Pemex, the state-controlled oil monopoly, to enter into contracts with third parties (e.g., foreign investors) to assist with the development of Mexican petroleum resources, including offshore resources, but would not allow Pemex to grant control of any Mexican petroleum resources to such third parties.  The PRI proposal includes the drafting of new body of law called the Energy Transition Law (Ley de Transicion Energetica), which would grant Pemex greater management and operational autonomy.

El Universal reported today that three U.S. franchisors will expand their franchise networks to Mexico.  The franchisors are Seattle-based smoothie maker Emerald City Smoothies (who doesn’t love a good smoothie?), Palm Springs-based water, sewer, and pipe leak repair service company American Leak Detection (we all have leaks), and U.S./India based computer and software training services provider Aptech (which appears to be U.S./India-based).

The future of international legal study in the Americas is the pioneering NAFTA Lawyer Program at the University of Detroit Mercy School of Law (UDM). 

The Program enables bilingual law students to earn law degrees in both the U.S. and Mexico.  Mexican coursework is conducted through the highly-regarded Instituto Tecnologico y de Estudios Superiores de Monterrey (ITESM).  If the two degrees were completed separately, they would take seven and a half years to complete, but this program allows students to complete both degrees in five years.  Following graduation and passage of the applicable bar exam in the U.S. (Mexico has no bar exam requirement), students are qualified to practice law in both the U.S. and Mexico.  Ambitious students can obtain a third law degree from the University of Windsor, Ontario with an additional year of vigorous study. 

I am surprised that more law schools have not taken the initiative to develop programs like the NAFTA Lawyer Program.  The only other truly international legal study program I am aware of is the French/U.S. and German/U.S. legal study program at Cornell Law School.

Although it would have been great if Tulane Law School had a program with ITESM or another Latin American law school when I attended, Tulane’s civil law curriculum is outstanding and provided an excellent background for a cross-border legal practice involving Latin America.  The Louisiana Civil Code of 1808, inspired by the French Civil Code (the Napoleonic Code), was the first civil code promulgated in the Americas and it has had a significant influence on many of the civil codes of Latin America.