Calling for rent control and other measures, political leaders in Mexico City have unveiled a sweeping plan aimed at fighting gentrification, a trend where rising rents and home prices push longtime residents out of neighborhoods.
Under “Order 1 for a Livable and Affordable City with Identity and Local Roots,” officials announced measures to cap rent increases, create a rental price index, and regulate Airbnb and other short-term rentals.
Mexico City Mayor Clara Brugada lauded the Housing Master Plan, which also includes an initiative to create thousands of new, affordable rental units that she announced last week.
“We have made a firm decision: to confront gentrification through public policies focused on housing justice,” she said.
She cited examples in Berlin, London and Rome where rent stabilization policies have helped preserve affordable housing, adding that “there are areas [in Mexico City] where rent prices have doubled from one year to the next, reaching increases of 100% without objective justification.”
This increase, she said, “leads to the expulsion of residents who have lived in the neighborhoods their entire lives.”
The push for new regulations in Mexico City comes amid rising demonstrations, such as a recent protest against gentrification in the Condesa neighborhood.
The ordinance — which aims to protect residents’ rights while fostering stable, inclusive communities in rapidly evolving urban neighborhoods — names 14 key actions.
These include establishing a Reasonable Rental Price Index to gauge fair rents based on factors such as property value, location and local income levels.
The government will also enforce a law enacted in 2024 prohibiting rent increases beyond last year’s inflation rate, create a new Office of the Tenant Rights Ombudsman to protect renters from eviction abuses, and propose a “Fair, Reasonable and Affordable Rent Act” to formalize rent controls.
Aiming to reduce inequality and control real-estate speculation, the plan targets neighborhoods in the Cuauhtémoc and Miguel Hidalgo boroughs — areas facing the steepest rent hikes.
“It will include the Hipódromo, Condesa, Juárez, Roma Norte, Roma Sur, Doctores and Buenos Aires neighborhoods in Cuauhtémoc, and in Miguel Hidalgo Escandón in its two sections, and San Miguel Chapultepec first and second sections,” explained Mexico City Planning and Territorial Development Minister Alejandro Encinas.
Additionally, the government aims to boost construction of affordable public housing and provide support programs for vulnerable groups like single mothers and seniors.
Experts note the city’s chronic housing shortage fuels gentrification, with six in 10 residents living in overcrowded homes.
Federico Sobrino, president of the Mexico chapter of the International Federation of Real Estate Agents (FIABCI), said the underlying problem is not Airbnb or foreigners, but rather the lack of new housing in the capital .
“The solution is to allow construction,” he said. “There are those who want to invest in it, but the permit process is closed. This would be perfectly viable if the mayoralties were given the power, but we don’t want to lose central control and all the revenue it entails. This dynamic forces people to move to peripheral areas.”
He said that over the past 15 years, 75% of people in Mexico City who have received housing loans through Infonavit (the Institute of the National Housing Fund for Workers) have been using their loans in the State of México, due to the high cost of purchasing a home in CDMX.
These types of Infonavit loans are intended to help workers buy, build or improve an existing home, making home ownership more accessible.
Though landlords are generally wary of rent controls, real estate professionals acknowledge the need for mechanisms to balance tenant protections and property owners’ interests.
Brugada said that all measures and actions aimed at curbing gentrification in Mexico City “will be discussed with all those who wish to contribute, debate, propose and discuss this issue.”
She added that there will be working groups, forums and meetings — noting that she has already invited the leaders of anti-gentrification marches to participate.
With reports from El Economista, El Universal and Chilango.com
From my prospective rents have gotten way out of control. Perhaps if there was some sort of a cap it could make housing more affordable for all.
Well something needed to be done. Hopefully that will appease them, and there won’t be a another protest, which is scheduled for this coming Sunday.
Rent control doesn’t work. It steals money from the property owner and gives the benefit to the tenants. Tenants won’t move because they are getting below market rent and property owners have no incentive to maintain the apartments because they are getting ripped off.
Blaming the victims and potential effective solutions is not the answer.
Here’s what AI says about rent control:
Rent control, while intended to make housing more affordable, often leads to unintended negative consequences in the long run, such as reduced housing quality, decreased supply, and misallocation of existing units. While it may offer short-term benefits to some tenants, it can create long-term issues for the overall housing market and broader community.
Here’s a more detailed look at why rent control is often considered ineffective:
Reduced Supply and Quality of Housing:
Discourages new construction:
Rent control limits the potential profits for developers, making new construction of rental properties less attractive.
Decreases investment in existing properties:
Landlords may be less inclined to invest in maintenance and upgrades when their rental income is capped. This can lead to a decline in the quality of existing rental housing.
Deters landlords from remaining in the market:
Some landlords may sell their properties or convert them to other uses if they find rent control unprofitable, further reducing the supply of available rental units.
Misallocation of Housing:
Discourages mobility:
Rent control can incentivize tenants to stay in their rent-controlled units, even if their housing needs change, leading to inefficient use of housing stock. For example, a family might remain in a small apartment even after their family grows, or empty-nesters might stay in large homes, simply because they have rent control.
Creates “insiders” and “outsiders”:
Rent control can create a situation where some tenants benefit from below-market rents while others face high rents due to limited supply and increased demand for unregulated units.
Long-term Negative Impacts:
Increased housing costs for those without control:
In the long run, rent control can lead to higher rents for those in non-controlled units and for new renters entering the market, as the overall supply of affordable housing decreases.
Potential for gentrification:
By reducing the cost of living in certain areas, rent control can make those areas more attractive, potentially leading to increased demand, rising property values, and displacement of lower-income residents.
In conclusion: While rent control may offer temporary relief for some tenants, its negative long-term consequences often outweigh the benefits, impacting the overall housing market and making it less affordable and efficient in the long run.
Maybe you asked a self serving question. Here’s another AI response…..
Maybe you asked a self serving question. Here’s another AI response…..
Rent control can offer several advantages in addressing gentrification, including:
1. **Preserving Affordable Housing:** Rent control helps keep rental prices stable or affordable, preventing displacement of long-term residents as neighborhood property values increase.
2. **Stabilizing Communities:** By maintaining consistent rent levels, rent control fosters stable neighborhoods with a diverse demographic, including low- and moderate-income residents.
3. **Reducing Displacement:** It helps prevent rapid turnover and displacement of vulnerable populations who might otherwise be pushed out due to rising rents associated with gentrification.
4. **Encouraging Long-term Residency:** Rent control incentivizes tenants to stay longer, fostering community stability and social cohesion.
5. **Mitigating Economic Inequality:** By limiting rent hikes, rent control can reduce economic disparities within neighborhoods, promoting more equitable access to housing.
6. **Supporting Cultural Diversity:** Maintaining affordable housing ensures that neighborhoods retain their cultural and social diversity, resisting homogenization that can accompany gentrification.
While rent control is not a complete solution and has its own critiques, these advantages demonstrate its potential role in mitigating some negative effects of gentrification.
Reduce the number of Airbnbs and go back to Bed and Breakfasts where owners are in the homes to help subsidize income. Short term renters make a lot more money for owners than a long term renter. It totally changes the neighborhood and raises rent for long term renters.
I often think back to a meme I saw a few years ago: “Let’s make housing like meals: nobody gets seconds until everyone’s had a chance to eat.”
Based on first hand experience with rent control in San Francisco, I can confidently say it doesn’t work in the absence of more explicit programs to expand public/affordable housing stock. RC creates huge distortions in the market and magnifies housing scarcity. I still sympathize with the problems CDMX and other big cities are wrestling with — but this policy won’t help.
Hola: As usual Compromise is best answer. Rent Control with limitations and ability to construct more affordable housing with limitations. There are more people now and will continue to be so these issues have to be addressed with a cool smart head. Presidente Sheinbaum seems to be there person to do this.