Introduction to the Challenges Faced by Developers
In Mexico’s housing industry, developers grapple with a complex and heterogeneous bureaucratic process known as “tramitología,” particularly at the municipal level, according to the Mexican Association of Real Estate Professionals (AMPI).
Current Housing Production and Its Impact
With an annual housing production of approximately 186,000 homes by the government, Mexico would take decades to significantly reduce its housing deficit of 8.2 million households, as detailed in AMPI’s study “Housing in Mexico 2025: Accessibility and Eligibility.”
Factors Widening the Housing Affordability Gap
The report highlights that the combination of sustained price growth, high construction costs due to lengthy permit processes and waiting times, rising material prices, labor shortages, unskilled labor for housing construction, and low incomes caused by informality has widened the gap between housing costs and the actual payment capacity of the population.
A Potential Solution: Simplified Construction Permit Process
AMPI proposes the Commission for Regulatory Improvement’s Simplified Construction Permit Model as a pathway to streamline the process for developers. This model consolidates low-impact projects into five permits with a target completion time of 22 days.
Centralized Digital Platform for Permits
“Inspired by existing regulatory improvement models,” AMPI suggests implementing centralized digital single-window platforms where all construction permit processes are managed. These platforms would have maximum time limits and employ the concept of ‘administrative silence with positive interpretation,’ meaning if an authority fails to respond within a reasonable timeframe, the permit is approved.
Current State of Digital Permit Platforms
Currently, only a few municipalities have effective digital single-window platforms for permits, forcing developers to engage in non-transparent physical processes.
Key Questions and Answers
- What is the main challenge faced by developers in Mexico’s housing industry? Developers confront a complex and heterogeneous bureaucratic process called “tramitología,” especially at the municipal level.
- What is Mexico’s current housing production rate, and how does it impact the housing deficit? Mexico produces around 186,000 homes annually through government efforts. However, this rate would take decades to significantly reduce the housing deficit of 8.2 million households.
- What factors contribute to the widening gap between housing costs and affordability? Factors include sustained price growth, high construction costs due to lengthy permit processes and waiting times, rising material prices, labor shortages, unskilled labor for housing construction, and low incomes caused by informality.
- What solution does AMPI propose to simplify the process for developers? AMPI suggests implementing a Simplified Construction Permit Model with centralized digital single-window platforms, maximum time limits, and the concept of ‘administrative silence with positive interpretation’ to expedite permit acquisition.
- How widespread are digital single-window platforms for permits in Mexico? Currently, only a few municipalities have effective digital single-window platforms for permits, forcing developers to engage in non-transparent physical processes.
