Gentrification is a social and economic process where various areas experience increased investment and an influx of residents with higher purchasing power. This phenomenon has led to a 94% increase in rents in some parts of Mexico City.
As gentrification progresses, there is a noticeable remodeling of housing, creation of new businesses, and significant rises in rental and property prices, often resulting in the displacement of original residents.
- Effects of Gentrification
Displacement of Residents
Original inhabitants, who typically have lower incomes, are forced to leave their homes due to rising living costs. - Changes in Community Structure
Social relationships within neighborhoods are restructured, potentially fragmenting communities and leading to a loss of cultural identity.
Increase in Inequality
The arrival of wealthier residents and real estate speculation increase economic inequalities. Services and businesses in these neighborhoods often cater to new residents, excluding the local population.
Causes of Gentrification
Various factors contribute to gentrification. Below are three primary causes:
1. Rise of Digital Nomadism
About 5% of Americans in Mexico are digital nomads. According to 2023 data from Statista, up to 17.3 million U.S. citizens consider themselves digital nomads, more than double the number in 2019. This phenomenon has significantly impacted cities like Mexico City and Puerto Vallarta, where increased housing demand from these workers has driven up prices and displaced traditional residents.
2. Impact of Airbnb
The demand for short-term rentals through platforms like Airbnb has increased housing prices, especially in central areas popular among tourists and digital nomads. In neighborhoods like Roma and Condesa in Mexico City, prices have risen notably. Property owners prefer renting to tourists and digital nomads via Airbnb, earning higher incomes than through traditional rentals.
3. Neighborhood Transformation
Urban remodeling and renovation lead to higher living costs and changes in community structure. These changes usually benefit new residents with higher purchasing power, while original residents face displacement.
Response from the Mexico City Government
The Mexico City government has implemented a series of reforms and regulations to address the impact of gentrification and the use of platforms like Airbnb. These measures aim to protect local residents and mitigate displacement caused by rising short-term rental prices. Below are the main actions and recent regulations:
Reforms to the Tourism Law
Martí Batres, goverment’s head of Mexico City stated that the massive commercialization of residential properties for rent on technology platforms will be prevented, ensuring that properties intended for living are not converted into tourist destinations through digital platforms. These reforms also benefit the hotel sector by preventing unfair competition, providing security to tourists and temporary lodging users, and offering legal certainty to platforms and property owners.
Mandatory Registration
Hosts must provide detailed information to tourists, report property occupancy to the Ministry of Tourism every six months, and notify neighbors about the property’s tourist use.
Platform Limits
Platforms must register with the platform registry, fulfill their tax obligations, and display host registration data on their websites or applications. The registration validity for platforms is two years and must be renewed.
With these measures, the Mexico City government aims to balance urban development with the protection of local residents, ensuring that the city remains a livable place for everyone.
Sources:
Terreros, B. (2024, April 4). The Government of Mexico City Takes Action Against Gentrification: Publishes Reforms to the Tourism Law. Infobae. Link: https://www.infobae.com/mexico/2024/04/04/gobierno-de-la-cdmx-va-contra-la-gentrificacion-publica-reformas-a-la-ley-de-turismo/
NotiPress. (2024, May 2). Gentrification: 5% of Americans in Mexico Are Digital Nomads. El Informador: News from Jalisco, Mexico, Sports & Entertainment. Link: https://www.informador.mx/mexico/Gentrificacion-El-5-de-estadounidenses-en-Mexico-son-nomadas-digitales-20240502-0075.html
Meganoticias. (n.d.). Digital Nomads and Gentrification. MEGANOTICIAS. Link: https://www.meganoticias.mx/cdmx/noticia/los-nomadas-digitales-y-la-gentrificacion/513192
Arellano, M. (2024, April 29). Gentrification and Dystopia: The Future of Mexico City in the Aftermath of the Covid-19 Pandemic. ArchDaily. Link:https://www.archdaily.com/956557/gentrification-and-dystopia-the-future-of-mexico-city-in-the-aftermath-of-the-covid-19-pandemic
Welle, D. (2024, January 19). The Challenge of Gentrification in Latin America. dw.com. Link:https://www.dw.com/es/c%C3%B3mo-la-gentrificaci%C3%B3n-afecta-a-los-habitantes-de-ciudades-latinoamericanas/a-68035301
Román, E. V. (2024, May 3). Gentrification in Mexico City: What Does the Tourism Law Mean for Platforms Like Airbnb? El País México. Link: https://elpais.com/mexico/2024-05-03/gentrificacion-en-ciudad-de-mexico-en-que-consiste-la-ley-de-turismo-para-las-plataformas-tipo-airbnb.html
Martín, M. L. S. (2022, December 22). Gentrification in Mexico Has Caused a 94% Increase in Rents in Mexico City. MVS Noticias. Link: https://mvsnoticias.com/entrevistas/2022/12/22/gentrificacion-en-mexico-ha-provocado-aumento-del-94-en-las-rentas-de-cdmx-577219.html
