What is required to mitigate gentrification in Mexico City? Capital government prepares regulation for Airbnb

During 2022, house rental prices and apartments in Mexico City have become almost unaffordable for a certain segment of the capital’s population, which is why many of them have had to move to cheaper areas in the peripheries, a phenomenon also known as gentrification.

Inflation and the prices of construction materials were some of the causes of the increase in housing prices nationwide; However, in the big city there is another factor that generated a debate among the citizens of the capital: the arrival of digital nomads.

This market, made up mainly of young foreigners, has increasingly occupied more spaces in neighborhoods such as La Roma and La Condesa, a demand that has generated sharp increases in rents.

According to the Propiedades.com platform, apartment rental price new ones in La Condesa had an annual increase of 15%, going from 30,000 pesos in the first half of 2021 to 35,000 pesos during the same period of 2022. Currently, in streets like Amsterdam, units are offered for up to 64,000 pesos per month.

This trend of real estate It has caused controversy and discontent among local residents, especially after the city government and the Airbnb temporary accommodation platform signed an agreement to trigger the arrival of foreigners.

Distribute demand, an option

According to data from the government of Mexico City, boosting the digital nomad market can generate an economic spill of up to 1.4 billion dollars a year; but the reality is that this effect would be reflected only in the areas most in demand by foreigners.

This was explained by Antonio Darszon, general director of the proptech Netta, who added that remote workers prefer to settle in neighborhoods such as La Roma and La Condesa due to their quality of services, security and community spirit.
However, the specialist opined that this demand can be expanded to other places, as long as there is some regulation and subsidies aimed at both owners and merchants, which make other areas of the city, such as Iztapalapa, more attractive.

“Decentralize, that is what authorities and the real estate sector should attend to so that more people enjoy the economic benefits of digital nomads. Even though this phenomenon has been concentrated in certain areas, it can spread to the rest of the city,” Darszon said in an interview.

Thus, he added, the effect of rent increase it would be more diluted and would not force current tenants to have to move. But this must be accompanied by a reinforcement of the rights of the inhabitants

They prepare regulations for Airbnb

A few months after announcing the agreement and after the criticism, the head of government, Claudia Sheinbaum, reported that a working group was started with the Planning Institute, businessmen and citizens to review the regulation of digital platforms and control the gentrification.

In this sense, he explained that dialogues are being carried out with the Federal Consumer Attorney’s Office (Profeco) and with Ada Colau, mayoress of Barcelona in Spain, who prohibited that in some areas of that city there were renta on digital platforms.

“She is going to send us all the information on how it was done in Barcelona, ​​and we are contacting other cities that have regulated this issue to avoid further gentrification or increase in costs and, at the same time, continue to receive tourism in the city,” said the official.