The History Behind Mexico's Restricted Zone

In an earlier post, I had explained the difference between the two categories of land in Mexico--the restricted zone and the interior (non-restricted zone). When asked why the coastal and border zones are restricted, many people don't really know why.

In order to better understand the history behind Mexico's restricted zone, we must go back to the mid 1800's. Mexico and the United States had a very hostile relationship due to the outcome of the Mexican-American war, where the United States took the states of California, Nevada, Utah, and part of Arizona, Colorado, and New Mexico. The biggest blow to Mexico was the loss of Texas in the Treaty of Guadalupe Hidalgo. Mexico lost almost half its territory in the war!

Bilateral relations were strained, and it was only a matter of time before Mexico took a stand against the United States' imperialistic expansion. On February 5th, 1917, revolutionaries met in Queretaro to reform the Mexican Constitution of 1857. One of the most important amendments to the Constitution was Article 27.

"Article 27 of the Constitution declares that the wealth contained in the soil, the subsoil, the waters and seas of Mexico belongs to the Nation. The right to land ownership and to exploit the subsoil may therefore only be granted by the Nation. Land may also be expropriated whenever deemed necessary. " --Source: SEP, Department of Education

The principles of the 1917 Constitution are alive and well in Mexico to this day. So how is it possible that foreigners can now own property in the restricted zones? Mexican President Carlos Salinas, in preparation for the upcoming NAFTA agreement and after receiving pressure from groups in Mexico and the United States agreed to amend Article 27. In 1993, Article 27 was amended to allow foreigners to own property in the restricted zone through a bank trust(fidecomiso).