Background on the Issue
As Mexico City grapples with rising rental prices and gentrification, the Asociación de Desarrolladores Inmobiliarios (ADI) asserts that the only sustainable way to curb this trend is by encouraging investment and construction of housing for all sectors.
Government Response to Public Outcry
In response to public protests over the escalating cost of housing in Mexico City’s capital, Mayor Clara Brugada introduced the “Bando 1” plan. This initiative includes 14 actions, such as creating a rental price index and enacting an Affordable Rent Law.
ADI’s Perspective on the Issue
According to ADI, these measures do not address the root cause of the problem: insufficient housing supply. They argue that the lack of available housing options drives up demand and increases prices.
“The only sustainable way to contain price hikes is by incentivizing the construction and rehabilitation of quality housing through a comprehensive urban agenda. This sets the foundation for a broader, more inclusive real estate market, deregulates processes, streamlines permits, allows for greater height and density, recycles underutilized land, and ensures legal certainty. Without these conditions, supply will remain limited, and prices will continue to rise,” ADI explained in a statement.
Addressing Regulatory Concerns
ADI called on Mexico City authorities to modernize urban regulations, emphasizing that the city still has significant room for efficient growth. With a population density of around 6,160 people per square kilometer, Mexico City lags behind densely populated cities like New York.
ADI believes this potential should be harnessed through normative changes that revitalize underutilized areas with sustainable, integrated, and socially responsible projects.
Moreover, ADI stressed that any regulation should consider both renters and homeowners since many rental properties are the primary income source for families investing in real estate.
Key Questions and Answers
- Q: What is ADI’s stance on controlling rental prices? A: ADI believes that setting price limits or caps does not address the root cause of gentrification. Instead, it could discourage investment in maintaining and rehabilitating properties as well as hinder new construction projects.
- Q: How does ADI propose to tackle rising rental prices? A: ADI advocates for fostering construction and rehabilitation of quality housing through a comprehensive urban agenda, which will create a broader and more inclusive real estate market.
- Q: What regulatory changes does ADI recommend for Mexico City? A: ADI calls for modernizing urban regulations to allow for efficient growth, revitalize underutilized areas with sustainable projects, and ensure legal certainty for developers.
