Mexico City intends to address a housing deficit. Mexico City intends to address a housing deficit.

CDMX will invest in 20,000 new homes

It's the first project to be announced since a three-year suspension

After construction of low-cost housing in Mexico City was suspended for three years, the Legislative Assembly has approved the first 20,000 new homes under the city’s new housing law.

The low availability of low-cost housing for the working class in the country’s capital has forced families to migrate to municipalities in the states of México and Tlaxcala, areas that are part of the greater Mexico City area, according to a report by the newspaper Milenio.

As a result, Mexico City proper has been experiencing a population decline in recent years although most people continue to work or study there, forcing them to spend much of their time commuting.

Studies estimate the city has a housing deficit of over 260,000 units, and the annual demand is for 70,000 more.

Construction of low-cost housing was suspended for three years after it was found that construction companies took advantage of a loophole in the regulations and built luxury condos instead.

This caused a 60% increase in the price of housing in the city, from an average 1 million pesos ($46,000) then to up 1.7 million ($78,000) today.

With the new housing law, which was approved in December, the Legislative Assembly intends to promote the construction of more social housing.

Building the first 20,000 houses will require an investment of 26 billion pesos (just under US $1.2 billion) for Mexico City, with an additional 1.3 billion pesos to cover fees and taxes.

The planned cost of the finished homes, which will be located in areas of the city identified as underutilized, such as the Industrial Vallejo, Atlampa, Guerrero and Cuauhtémoc neighborhoods, is between 700,000 and 1.5 million pesos. The intended market for the houses are low-income and middle class residents.

The new law also calls for the creation of a housing council that will oversee the performance of real estate firms and construction companies, to prevent the repeat of abuses of the past.

Source: Milenio (sp)

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