Although not all housing demand is related to new properties, there is an evident shortage that is not being adequately addressed.
In Mexico, the rental market faces a growing demand that requires around 80,000 new homes annually to meet rental needs, according to Francisco Andragnes, CEO of Homie. Although not all this demand requires new housing, there is an evident shortage that is not being adequately addressed.
“I believe that around 80,000 homes are needed annually to meet the market demand. Not all of them are for rent, and not all need to be new housing, but there is a strong need in the city that is not being addressed,” he said in an interview with reporter Fernando Navarrete.
The plans of the next administration to develop affordable and rental housing, led by Infonavit, are viewed optimistically by the sector. Andragnes highlighted that Infonavit’s participation could motivate other public institutions such as Fovissste and the Federal Mortgage Society to create more schemes that boost the supply of rental housing.
“Even Serviste within CDMX with its rental housing project, in general, the public sector is realizing that the previous plan, which was solely to push ownership, is not a sustainable solution,” he added.
Homie, a platform that has been in the Mexican market for nine years, has consolidated with the signing of 500 contracts per month, and a demand that far exceeds the supply. With a growing need for rental housing, the next six years could mark a significant change in the country’s housing landscape, a moment that Andragnes defines as a unique opportunity for the industry.
“The rental market is very hot, there is a lot of demand, we as a company sign about 500 contracts per month, few companies have that scale. And there are more than 10,000 people looking for those 500 contracts that are signed each month, so the reality is that there is growing demand and a very limited supply of apartments, which makes rents go up,” he detailed.
Lessons from NY for CDMX
A year after the strict short-stay regulations came into effect in New York, the city is still struggling with rising real estate and hotel prices. Despite the promises of the regulations to improve housing accessibility, the effects have been counterproductive: the average hotel price in New York rose 7.4 percent in the last 12 months, complicating stays for tourists and affecting businesses that depend on their spending.
For Theo Yedinsky, Vice President of Public Policy at Airbnb, the regulations not only failed to resolve the housing crisis but also impacted communities in the city’s peripheral neighborhoods, raising travel costs. This price increase and the tourism slowdown are a clear example of how a well-intentioned policy can have adverse effects when not properly evaluated.
This context can offer important lessons for CDMX, where the local government’s proposed reforms around short-term rentals are generating similar concerns. The negative effects that New York has experienced could be a wake-up call about the need for a more balanced approach that promotes both housing protection and the economic boost generated by tourism and short-term rentals.
To avoid a similar scenario, it will be crucial for Mexican authorities to dialogue with all involved parties and carefully evaluate the possible repercussions before implementing restrictive measures in this key sector.
To avoid a similar scenario, it will be crucial for Mexican authorities to dialogue with all involved parties and carefully evaluate the possible repercussions before implementing restrictive measures in this key sector.
The Legal Battle for Palmas 915
We are told that with the arrival of Clara Brugada to the government of CDMX, the real estate project of Palmas 915 in Lomas de Chapultepec will be reactivated, a development suspended for nine years due to the lack of permits and strong neighborhood opposition. The project, driven by Grupo GICSA, includes a luxury complex with 17 floors and 11 levels of parking, something that exceeds the permitted limits in the area, where only constructions up to three levels are allowed.
Neighbors argue that this mega-project threatens to overexploit the water supply and push the drainage system to its limits. Additionally, they claim that the project does not comply with environmental or urban regulations. Despite these concerns, it has been reported that an agreement has been reached between the real estate company and the CDMX government to proceed with the development.
The mayor of Miguel Hidalgo, Mauricio Tabe, has stated that works of this magnitude must comply with the law and have the community’s support, something that does not seem to be happening in this case.
Source: El Financiero
