Settling Down South of the Border

Feb. 13, 2009 — -- The bells of the majestic pink granite 17th century cathedral peal through the streets. People sit in outdoor cafes lining the cobblestone streets of the main square contemplating a scene worthy of a romance film set in Italy.

But this isn't Europe; it's the colonial city of San Miguel de Allende, Mexico, just hours from the Texas border. And many of those people sipping coffee in the cafes are Americans who now call San Miguel home.

American expatriates have been settling in San Miguel for half a century. Drawn here by the colonial charm, the dry mountain that never gets too cold or too hot, the proximity to the U.S. and by the low cost of living.

"You'd be amazed at what you could get for 80 pesos [US $6]," said Tim Johnson, a former New Yorker who has been living here with his partner for almost four years. "You get your oranges for half of the week and all kinds of fresh vegetables."

"Cost of living" is a constant refrain. As millions of baby boomers face retirement in an economy that has ravaged their savings, places like San Miguel have an extra appeal.

"Anything that involves service is much, much cheaper here," said Johnson's partner Tom King, also from New York. "If you bang up your car and you get body work, [it's] maybe a third or a fourth of what it would cost in the United States, or less."

Robin Arena from Fort Worth, Texas, said she was drawn in by the food. "My favorite thing is it's so inexpensive," she said. "I remember the first time I went to the market to buy cilantro, [it cost] 20 cents ... I kept thinking I need to add another zero. It is unbelievable."

To be sure, it's more than the cost of living that makes San Miguel so appealing, making the city a budget-friendly alternative to more traditional warm weather and retirement destinations, like Florida.

San Miguel overflows with restaurants, art galleries and cultural events, and the spectacular Spanish Colonial city center is a UNESCO World Heritage Site. That, combined with its affordability, helps explain why more than 10 percent of the city's 80,000 full-time residents are Americans and Canadians.