fbpx

Don't worry, we speak : Español (Spanish), too!

Regulation of Airbnb by the Mexican Government Speaks to the Impact on Housing in the Capital

Don't worry, we speak : Español (Spanish), too!

As in much of the world, housing costs in Mexico City’s most desirable neighborhoods have skyrocketed in recent years. The pandemic, which led to both high inflation rates and an influx of USD-earning digital nomads, has only exacerbated this housing affordability crisis. According to the New York Times, median rent prices surged from 800 USD a month to 1800 USD a month, while in trendy, expat-filled neighborhoods such as Condesa and Polanco, housing prices are even more astronomical, at well over 2000 USD a month. These prices easily approach the levels of major US housing markets, even in a city where a full-time worker can make less than 300 USD monthly.

One of the major players facilitating this dual trend of rising rents and increased foreign presence is the digital housing platform AirBnB. In October of 2022, much to the dismay of those outraged at the rapidly rising gentrification and rents in the Mexican capital, Mexico City Mayor Claudia Sheinbaum announced an initiative aimed at luring digital nomads to relocate to Mexico City through an alliance with AirBnB and UNESCO. The “digital tourism” marketing plan consists of providing workshops intended to boost incentives and PR campaigns to help connect local hosts with international remote workers. This initiative has already been introduced in cities like Dubai, Buenos Aires, and Lisbon under the moniker “AirBnB-Live and Work Anywhere.”

Although this digital agreement was not entirely catering to international residents (the plan also included hiring locals as tour guides), the announcement was clearly aimed at the growing number of expatriates who have flooded the metropolis. It was likewise an attempt to make Mexico City a worldwide nomad destination. In the official press report, Mayor Sheinbaum highlighted the fact that thanks to AirBnB, the Mexican capital was now a “Top 20” destination for remote workers.

This led to a significant and not unexpected backlash, and suddenly, a few months later, Mayor Sheinbaum and the Mexico City government seemingly reversed their position. In January of this year, Mexico City officially announced its plans to regulate Airbnb in order to hem in the surging phenomenon of neighborhoods that are now prohibitively expensive for local residents. Although the specific types of regulation have yet to be specified, the motive behind this switch was laid bare by Sheinbaum and government spokespeople: to avoid Mexico City possessing entire neighborhoods that are essentially owned by the platform, displacing locals in the process. The regulation comes at a key time, as statistics show that in 2022 long-term stays of 28 days or more via AirBnB in Mexico had increased by 30%.

This policy follows similar measures in international cities such as London, New York, and Barcelona, which found that Airbnb had priced out already costly housing markets.

Yet the impact of this platform on prices, partially spurred by expats and digital nomads, is especially marked in a metropolis with such a disconnect in earnings between locals and foreigners. Contxto spoke to a spokesman from the fair and equal housing initiative “Tu Casa, Mi Causa” about how online platforms such as Airbnb have accelerated the gentrification in the real estate market in the capital. Ricardo Beltran considers himself an expert on gentrification in Mexico and its impact on housing in the capital. He affirmed that this phenomenon existed long before the advent of Airbnb, while admitting that the platform has indirectly led to the displacement of locals by foreigners with more spending power in neighborhoods such as Nápoles, Condesa, and Narvarte.

Casa colonial en Roma Norte, Ciudad de México. (Foto: Adobe Stock)

Beltran also stated that “supply and demand has always been around (in the local housing market). The difference is that now locals compete with high-income foreigners, while before the dawn of the internet age, only local supply competed with locals.” Beltran added, “There are many pros (of AirBnB); the platform makes proper use of wasted spaces and does so in a trustworthy way. I do not see many cons, and I don’t view AirBnB as guilty of anything. However, short-term rents via the platform should be intelligently regulated.”

Royfid Torres, a Mexico City-based representative and equal housing activist, has worked side-by-side with Tu Casa, Mi Causa. Torres has publicly criticized the “digital agreement” between Mayor Sheinbaum and AirBnB, stating that “this policy was made without any specific measures to avoid the ongoing crises of inaccessible rents in the metro area that are affordable only for foreigners who earn international currency.” Torres further noted that this accessible housing crisis in Mexico City dates back at least 20 years, and during the pandemic, it has only intensified; he stated that some 10,000 construction workers lost their jobs during this period, making further housing to suit the growing demand even more difficult. Torres predicted that if no regulations are imposed on Airbnb and similar services, in upcoming years, the city will be inaccessible for almost all locals, especially younger generations. However, when acknowledging the Mexico City government’s plans to regulate digital platforms, he optimistically said, “we can learn from other international cities such as Toronto and generate a sense of equality in housing.”

Rosalba Loyde, a professor at the National Autonomous University of Mexico (UNAM) and urban housing expert, spoke with Contxo about the history of the housing crisis in CDMX and the impact of Airbnb and digital nomads. Loyde noted that the cracks in the facade of affordable housing for Mexico City residents started to appear in the aftermath of the infamous 1985 earthquake, which notably altered the city socially and geographically. The relatively recent developments of remote work and platforms like AirBnB truly started to explode right at the cusp of the pandemic era in 2019, in which savvy AirBnB hosts started “to advertise many properties at once, which led to intense competition between these platforms and the traditional housing markets in the city.” Although Loyde stresses that Airbnb only accounts for roughly 5% of the total properties available for rent in Mexico City, she believes that the platform´s rise in popularity since its introduction in 2009 is remarkable. She added that Airbnb is also starting to impede the ability of many Mexican residents to live in areas of the capital “that are appealing for both work and recreation.”

(Foto: Adobe Stock)

The effects of these housing platforms on local tenants in the sprawling metropolis have been reported frequently on social media and news outlets. María Gala is a longtime Mexico City resident who told Contxto that her apartment in the increasingly gentrified neighborhood Juárez was essentially bought out by Airbnb, displacing her in the process. Gala detailed how she had been renting the apartment with her partner, which had been vacant for quite some time, at a slightly discounted rate during the start of the pandemic in 2020. After two years and no issues, the couple were informed that the proprietor has decided to advertise the apartment on Airbnb at a more profitable price, effectively pushing out the renters. They had no other choice but to find another apartment in their budget range; while they had been paying 10,000 MXN (about 500 dollars) monthly, AirBnB now lists monthly stays at the apartment at a more than 300% markup, between 32,000 and 35,000 pesos.

This theme of displacement has been a frequently reported one in the city following the rise of AirBnB. A video report from Al Jazeera en Español offered testimonies from Mexico City about their experiences of essentially being evicted from their long-established homes due to the rising prices offered by Airbnb and similar services. Despite all this, Pablo de los Cobos, an expert on housing and public policies at the Center for Teaching and Research in Mexico (CIDE), also offered some benefits offered by the service via a social media forum about the impact of Airbnb on Mexican society and its impending regulation. De los Cobos mentioned that Airbnb helps find new uses for underutilized spaces, and for travelers, it offers a better experience than traditional hotels in every respect- cost, transparency, flexibility. Meanwhile, Cobos also acknowledged some of the negative effects, such as the fact that apartments intended for long-term use are being converted into AirBnBs, but stated that its difficult to prove how frequently this happens.

Vista aérea del parque Alameda Central, Ciudad de México. (Foto: Adobe Stock)

 Despite her negative experience, Gala also affirmed that for budget tourism, Airbnb offers relatively low-cost alternatives to hotels, even though she said that many people renting out Airbnbs are investors rather than inhabitants. Concurring with these views, an official spokesperson from AirBnB spoke with Contxto and offered a bevy of statistics revealing some positive aspects of the platform’s impact on Mexico City. Most notably, the company claimed that for every 10 dollars invested on AirBnB properties, users spent 39 dollars back into the Mexican economy, for a total of some $465 Million USD in 2021 in Mexico City alone. In addition, this spending helped maintain about 7,600 jobs within the local tourism sector. Meanwhile, nearly half of AirBnB hosts were women, helping boost female employment and income in the Mexican capital. 

Above all, the San Francisco-founded company affirmed its commitment to making sure that no renter is displaced as a result of the platform, stating that “we are always working with regulators and authorities to abide by the rules and help with the challenges faced by the Mexico City community, even as we strive to offer an affordable approach to tourism.”

Main image: Building in Colonia Condesa, Mexico City. (Photo: Adobe Stock)

 

You may also be interested in: Juan Pablo Lafosse on How ‘NFTickets’ Could Change the Travel Industry

 

Samuel Burleigh
Samuel Burleigh es periodista estadounidense radicado en Ciudad de México.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

People Are Reading!

Latin Leap VC Arrives in LatAm To Invest Us$25 Million in...

0
In a context of uncertainty in the startup ecosystem due to macroeconomic problems that took force in 2022 and the recent collapse of Silicon...