Redensification or gentrification? Vertical housing price in Guadalajara generates population displacement

Vertical residential projects in the city’s metropolitan area reach prices above 90,000 pesos per square meter, according to ABC Appraisers

The real estate sector in the Metropolitan Area of Guadalajara, Jalisco, has experienced notable growth in recent years, characterized by the expansion and diversification of mixed-use projects that combine vertical housing, commercial spaces and recreation areas.

However, this type of development, contrary to the redensification objective that has been promoted by the region’s government, has been inaccessible to the local population, which has to face gentrification due to the high costs of the apartments.

According to the valuation firm ABC Appraisers, there are vertical residential projects for sale located in the metropolitan area of the city that reach prices above 90,000 pesos per square meter.

Honorato Villa, general director of the company, indicated that this dynamic in the sector could begin a process of urban transformation, where families that do not have the profile of the area begin to migrate to areas with more competitive prices and, little by little, New users arrive with a profile to rent.

In their study “The gentrification of the center of Guadalajara: Projects, conflicts and resistances”, specialists in anthropology and architecture, Horacio Espinosa and Fernando Cornejo, highlighted that the redensification projects of the center of the city of Guadalajara have not managed to reverse the massive displacement of the population to closed subdivisions on the outskirts of the city.

“The most affected area, due to the magnitude of the projects and the institutional support that they have received from the three levels of government, is the one around Morelos Park (located in the historic center of the city),” say the experts.

In addition, they added that said area is attractive due to the availability of land owned by the municipality, which can be sold or transferred to private initiative for the development of projects; its location and the existence of a tree-lined public space.

“In the surroundings of Morelos Park, the intention is to build housing units on land that is currently public property, but that is being offered to private investors so that they can carry out the project. All these new housing units that are being built or planned are far from the economic possibilities of those who currently live in the area,” Espinoza and Cornejo noted.

Average home price soars

During the first 11 months of 2023, new vertical housing of the middle category in the Guadalajara Metropolitan Area had an annual increase of 16%, according to ABC Appraisers; Thus, it became the segment with the greatest appreciation and registered an average price of 42,963 pesos per square meter.

Meanwhile, the new social interest units seem to have disappeared, since they do not present a participation in the market sales records; On the other hand, the price increase in used apartments was 7% annually, with an average price of 12,256 pesos per square meter.

In the same category of used homes, the residential plus segment does not reflect transactions. Villa explained that this is because the demand was covered with the sale of horizontal houses and residential lots, but today they have found a niche in vertical housing that promises a lifestyle for users.

“Surely, in the coming years, once the apartments under construction are delivered, we will be able to analyze what the dynamics of the housing used for this segment is like,” said Honorato Villa.

 Source: El Economista