President Claudia Sheinbaum spent a good portion of her Wednesday morning press conference speaking about gentrification in Mexico City, a phenomenon that has been particularly noticeable in neighborhoods that are popular with foreign residents of the capital, such as Condesa and Roma.
Late in her press conference, she acknowledged the United States government’s decision to postpone the date U.S. sanctions on the Mexican banks Intercam and CIBanco and the Mexican brokerage firm Vector will take effect.
Sheinbaum: Gentrification ‘is not necessarily associated with foreigners coming to live in Mexico’
Five days after a protest in Mexico City against the gentrification of neighborhoods where many foreigners live and stay, a reporter asked the president about the possibility of enacting national laws against exorbitant cost-of-living increases in such communities.
“First, we need to ask ourselves: what is gentrification?” Sheinbaum responded.
She went on to explain that gentrification refers to the displacement of the “original population” of a particular neighborhood with more affluent people who move into “housing of another economic level.”
Sheinbaum acknowledged that gentrification has taken place in parts of Mexico City and “in many other cities of the world.”
Sheinbaum said that gentrification is “sometimes promoted from within the government,” and subsequently took aim at former Mexico City mayor Miguel Ángel Mancera, who was in office in the capital between 2012 and 2018.
During his mayorship, land was rezoned to allow larger construction projects, she said.
Offering an example, Sheinbaum — a former mayor of Mexico City herself — said that land use permits were changed in some cases to increase the maximum permitted height of a housing project from three stories to 20.
“So, what happens? Well, it’s very profitable for real estate developers who say, ‘Well, I’ll buy this lot’ and housing is built … in [which there is] a lot of stories in the same building,” said the president, who on Monday asserted that gentrification is an issue of “real estate speculation.”
The construction of such housing increases the number of people who move into certain neighborhoods, “expelling the original inhabitants and … raising the standard of living in those places,” Sheinbaum said.
She said that long-term residents of those neighborhoods have every right to ask: “‘Why is this process of gentrification occurring?'”
“… In Condesa, in Mexico City, or in Roma, there have been various issues that have been occurring for many years, some of which weren’t promoted by the government, but which simply occurred as part of the development of the city — a lot of stores and restaurants [opened] that attracted a lot of people to visit the area, not necessarily live there,” Sheinbaum said.
Later, more affluent people moved into the neighborhoods and contributed to an increase in rents, she said, without specifying the period she was referring to.
“Obviously, processes of gentrification shouldn’t occur if they drive out those who are there originally, [forcing them] to go and live on the periphery [of the city],” Sheinbaum said.
“… It changes the standard of living and creates a division between those who have economic resources and those who don’t. Those who have economic resources are left with the best parts of the city,” she said before stating that gentrification is an issue that must be attended to.
In 7 years, immigration authorities issued over 230,000 residency permits in CDMX
Sheinbaum then addressed the issue of the influx of foreigners to neighborhoods such as Condesa and Roma, a number of whom came to live in Mexico City during the pandemic while working remotely, especially for U.S. companies.
“People who come from other places” to live in that part of the city, regardless of whether they come from other parts of Mexico or other countries, “may be part of the process of gentrification,” she said.
“But a process of gentrification is not necessarily associated with foreigners coming to live in Mexico, in this area, that must be made clear,” Sheinbaum said.
Foreigners, especially Americans, were singled out as a central cause of gentrification in Condesa and Roma by many of the protesters who attended the demonstration last Friday.
Among the messages on the placards they held up at the protest were: “Free us from American gentrification”; “You’re visiting paradise, we’re being pushed out”; “You’re not an expat, you’re an invader”; “Foreigners love Mexico, but hate Mexicans;” and “Dispossession comes disguised as Airbnb.”
‘The phenomenon of gentrification must be addressed’
Sheinbaum subsequently shifted her focus to measures that can be taken to prevent the cost of living in Mexico City — and especially the cost of housing — from skyrocketing.
“How is it done? Through different mechanisms and also by building social housing, which is what we’re doing,” she said.
Sheinbaum highlighted that the new homes the government is building are close to centers of employment rather than on the outskirts of cities, “as was done for a long time.”
“The phenomenon of gentrification must be addressed,” she added.
Sheinbaum said that the federal government will “support” Mexico City Mayor Clara Brugada and the mayors of the capital’s 16 boroughs in their efforts to combat gentrification.
“Land use, all that, depends a lot on municipal and state policies, but we’re going to provide support,” she said.
“… In the end what we want is the right to housing and the right to the city, or cities, to be guaranteed. The right to the city is to be able to enjoy all the benefits of a city without being forced out to the periphery,” Sheinbaum said.
She stressed that zoning laws and the issuance of land use permits in Mexico City are a matter for the city government and Congress.
“It’s not a federal matter,” she said.
“How are we attending to the right to housing? With the construction of homes. And we can support all the states and all the municipalities if it is required to guarantee the right to the city and the right to housing,” Sheinbaum said.
Pressed as to whether national legislation would be possible, the president highlighted that the Mexican Constitution attributes certain powers to municipalities.
“So the municipalities are autonomous,” she said.
“It’s one thing to prosecute a crime at the federal level and the state level. It’s another thing to encroach on the powers a municipality has. So, rather, this is where we help, we work in a coordinated manner to guarantee the right to a decent life for people in urban areas,” Sheinbaum said.
Sheinbaum acknowledges postponement of US sanctions on Mexican banks
Toward the end of her press conference, Sheinbaum said “it appears that a postponement has been achieved” regarding the date U.S sanctions on the Mexican banks Intercam and CIBanco and the Mexican brokerage firm Vector will take effect.
The United States Department of the Treasury last month accused the three Mexican financial institutions of laundering millions of dollars for drug cartels. A prohibition on transactions between U.S. banks and the aforementioned Mexican financial institutions was set to take effect in the middle of July, but the Financial Crimes Enforcement Network of the U.S. Department of the Treasury postponed the enforcement date until Sept. 4.
Sheinbaum indicated that the Finance Ministry (SHCP) would comment further, and indeed it released a statement later in the day.
“The United States Department of the Treasury, through its Financial Crimes Enforcement Network (FinCEN), announced today a 45-day extension, until September 4, 2025, for the entry into force of orders that restrict certain fund transfers with three Mexican financial institutions: CIBanco, Intercam Banco and Vector Casa de Bolsa,” the SHCP said.
The ministry said that the decision was “the result of dialogue and collaboration between the Government of Mexico and U.S. financial authorities.”
The SHCP noted that the Mexican government “has assumed the temporary management” of Intercam, CIBanco and Vector, “with the aim of strengthening supervision, ensuring regulatory compliance, and preventing harm to users of the financial system.”
By Mexico News Daily chief staff writer Peter Davies (peter.davies@mexiconewsdaily.com)
If you build it, they will come – Put the blame where it belongs, the developers and city officials, not the people it attracts
Inflation, a part of what gentrification is, can be caused by the people, by customers. Ex-pats come from countries all over the world, not just the US, and they bring lots of money. They come and spend their affluence without shopping, looking for the best deal. Foreigners are willing to spend a lot more for an item, technology, clothing, restaurant food etc, than some Mexican citizens. They casually accept the “Gringo Tax” and contribute to inflation. We can’t blame local businesses because they are taking advantage of increased profits because the foreigners do not question the higher prices. Attention foreigners! Please seek the best price for a service or item than the inflated prices.
Yeah, who needs housing. Evil developers. 7 percent of the housing units in Mexico City, .7 not even one percent, are Airbnbs. That has nothing to do with inflation. Mexico average over 5% inflation. If ya know anything about inflation and it’s compounding you know why prices go up. And gov is responsible for inflation. Always and forever.
Btw Claudio was all for Airbnbs until it got fashionable to not like them from some of her voters.
I agree. Sheinbaum blames the gentrification on Mancera, but she succeeded him as mayor and obviously did nothing to address the problem.
As mayor she actually made the situation worse by making a deal with Airbnb and UNESCO to promote Mexico City to digital nomads. I guess she forgot that little detail when casting blame on the former mayor.
While “gentrification” is negatively associated with residential dynamics, commercial gentrification is positively associated with creating a net public good. To correct for what is perceived to have negative impacts, govt leaders will need to downzone, but will they do it?
Negatively associated with residential dynamics? Where should rich people live? Should they live in standard Mexican houses? Should they hire fewer construction workers to build more modest homes?
Mexico has a growing middle and upper class. And liberty is largely responsible. I like Sheinbaum but she’s completely wrong on this issue and just a short time ago she was praising and promoting Airbnbs.
Inflation is caused by government deficits and money printing. Politicians like to point the finger at gentrification when it’s their own poor policies that cause a high cost of living.
Very relevant comments! Bravo! 👍
One useful approach– require any property offered as a short term rental (e.g. VRBO or AirB&B) to be locally owned and managed. There are many rentals which are bulk purchased by exterior interests and serve as “cash cows” for offshore investment firms. They tend to be impersonal and sort of shabby. Locally owned and operated means the rent money stays local– and benefits the community.
Yes. The Air BnBs owned by local people as a way to keep and maintain their family homes usually benefit everyone. The guest also has a more authentic experience and can better appreciate Mexican culture.
Right..and this was the original proposal..rent your extra room, garage conversion attic. Make a little money on the side. Everyone liked it in the beginning. It morphed into something foul and destructive. As a small hotel owner they are also unfair competition. They do not pay all taxes, nor are they good employers. Nor do they get proper licenses. It is greed and speculators who have turned it into a cancer.
Good idea!
I’m not sure gentrification is the correct term for what is currently happening. I think capitalism is a better descriptor. It is simple supply and demand. I agree with Mr. Voss in that the developers and city officials should be looked at first. Parks, Infrastructure, zoning, amenities, historic relevance, schools, etc. all increase the desirability of a neighborhood. When anything is more desirable, the money needed to obtain that item increases. If city leaders allow certain neighborhoods to flourish, those locations will be the most desirable. If there are only 100 places to live in that neighborhood, there will be a lot of competition for those spaces. A landlord/owner shouldn’t be expected to accept less than market value for his/her property. The same as those with the means shouldn’t be blamed for purchasing what they want and can afford. The only way to avoid this type of gentrification is to prevent the city from investing in a select few neighborhoods and keep developers from building nicer, newer residences. Alternately, the only way the government can resolve the issue, is to adopt socialist policy and build quality residences and either rent/sell at low/no profit, or to subsidize housing such as section 8 in the US. Which will also remove money from the national budget which would be better used ensuring safe, dependable drinking water, fighting crime and corruption – includingthecartels, improving infrastructure for everyone, training teachers and building better schools, etc. Nothing is “fair”. Creating laws that hinder growth and impede foreign ownership will only stiffle growth and negatively impact nearshoring efforts and growth of the Mexican economy. As Mexico grows, it will continue to create better jobs with better pay and improve the financial health of Mexican workers. The local citizens are no different from anyone else in wanting the most they can get with their money. Soon the desirable neighborhoods will be occupied by higher earning Mexican citizens. It’s not the international travelers and expats to blame, it’s anyone who has more money to spend. The same is true in every Country around the world. Protest for better local government, increased pay, fairer laws, and stronger leadership. Blaming Americans, no matter how arrogant, unassimulated, and entitled they are, doesn’t solve anything.
THANKS
Thank you for this article and to you who took time to comment, thank you all. The comments were thoughtful and insightful.
Always appreciate the thouhtful comments from Norse Hombre…. You hit the nail on the head. For better or for worse, the “laws” of economics are at work.
I agree with you. Americans and expats get a lot of blame, but they’re a small piece of a much bigger picture. Local policies, developers, and broader economic forces play a much larger role in reshaping neighborhoods. History shows that outsiders are often the first to be blamed when tensions rise — xenophobia is a deeply rooted human instinct, even if it’s not always justified.
Just a thought. If you’re an expat thinking of investing in an Airbnb, consider partnering with A Mexican and gifting ownership 50/50. Everybody wins!