Introduction
Mexico City, the country’s largest economy, has introduced a Master Plan to combat gentrification, a phenomenon causing soaring land prices and displacement of original residents and businesses to the outskirts.
Target Areas
The plan will focus on a 1,170-hectare area encompassing 17,376 properties in priority neighborhoods within the Cuauhtémoc and Miguel Hidalgo alcaldías. This area recognizes Zonas de Tensión Inmobiliaria (ZTI) with up to a 100% increase in land use, real estate speculation, and a 24% rise in short-term rentals like Airbnb over the past five years, according to official Mexico City government data.
The designated polygon includes Hipódromo Condesa, Condesa, Juárez (excluding Zona Rosa), Roma Norte, Roma Sur, Doctores, and Buenos Aires in Cuauhtémoc; Escandón sections I and II, and San Miguel Chapultepec I and II in Miguel Hidalgo.
Miguel Hidalgo alcaldía has the highest average land price in Mexico City at 54,604 pesos per square meter, followed by Cuajimalpa, Benito Juárez, and Cuauhtémoc at 51,039 pesos per square meter, as per Sociedad Hipotecaria Federal data.
Key Actions
The Mexico City government plans to regulate temporary housing rentals, establish a Real Estate and Housing Observatory to monitor rental contracts, introduce incentives for local businesses, and prioritize public housing production within ZTI, focusing on vulnerable groups like seniors, young adults, and single mothers.
Implementation will begin with a public consultation coordinated by the Democratic Planning and Prospective Institute, followed by a formal agreement from the Secretariat of Urban Planning, Territorial Order, and Metropolitan Coordination.
Gentrification Explained
Gentrification is a social transformation and exclusion process in certain city areas, where people with fewer resources, original residents, businesses, and local services are displaced by those with higher economic status and new developments. This is the impact of global economy on major cities and real estate speculation, according to Mexico City’s mayor, Clara Brugada.
Community Protests
Mexico City residents have held protests against gentrification and short-term rentals.
“We’ve been warning authorities since May that this phenomenon would occur, following the pattern of protests in European cities like Barcelona and Venice affected by the same real estate issue linked to Airbnb,” said Javier Puente, president of the Mexico City Hotel Association.
“We’re not against Airbnb; we’re against chaos. An unregulated building with 300 tourist apartments is a security and speculation risk. The regulation for these platforms is stipulated in the April 2024 Tourism Law, one of Latin America’s most advanced,” Puente added.
“The registry hasn’t been implemented because it wasn’t a priority, but now is the time to apply it,” he concluded.
Shift in Strategy
In 2022, under the administration of now-President Claudia Sheinbaum Pardo, Mexico City’s capital actively promoted the arrival of digital nomads with specific campaigns and special visas, aiming to capture 5% of this market from the US. However, the mistake was not regulating them, leading to current consequences.
“The solution lies in implementing effective controls that protect both residents and the regulated tourism sector instead of opting for exclusionary measures against visitors,” Puente emphasized.
Master Plan Actions
- Democratic and participatory management in the territory
- Interventions in Zonas de Tensión Inmobiliaria (ZTI)
- Regulation of temporary housing rentals
- Strengthening social housing policy
- Implementation of the Public Housing Rental Program
- Expansion of the Home Improvement Program
- Implementation of the Community Arraigo Program and Cultural Heritage Protection and Preservation Program
- Creation of a Special Stimulus Program for Local Businesses
- Establishment of the Real Estate and Housing Observatory
