Mexico’s housing paradox : the political economy of inaccessibility and vacancy

Date

2018-09-13

Authors

Reyes Ruiz Del Cueto, Laura Alejandra

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Abstract

Neoliberal restructuring in Mexico drove a considerable mortgage expansion and a housing production boom, arguably with the intention of increasing housing access for lower-middle income formal workers. During the 2000s, numerous households acquired mortgages to buy houses in the fringes of Mexican cities, where local governments have struggled to provide adequate infrastructure and services. Many such families have seen their mortgages and monthly payments swell through the years while their debt remains virtually unchanged, forcing many of them to leave their dwellings behind and return to renting or to living with other relatives closer to the urban core. Numerous newly built developments have thus exhibited alarmingly high housing vacancy rates. By 2010, Mexico had over five million vacant housing units and a 14 percent vacancy rate. Paradoxically, however, about a third of Mexicans still live in poor housing conditions. This research analyzes the influence of recent federal housing finance policy, and urban development practices at the state and local levels, in promoting housing production and vacancy. It also discusses some of the spatial and socioeconomic implications of these development patterns for residents, government and financing institutions, and developers. In particular, this research examines the experiences of two cases: Tijuana, Baja California and Huehuetoca, State of Mexico, chosen for (1) the severity of their vacancy and housing conditions, (2) the amount of housing investment they received in the 2000s, and (3) their contrasting institutional capacity at the local and metropolitan levels. Drawing upon mixed methods and extensive field research, I argue that the coexistence of a housing oversupply and a shortage exposes the tensions between the commodification and the right to housing, and the extent to which the former has trumped the latter. Given the flourishing of construction and real estate interests through state support, Mexican housing policy has served as a politically guided intensification of market rule, rather than as an apolitical and technocratic framework, as neoliberal advocates have often argued. Contrary to the rhetoric of autonomous market-led efficiency, the Mexican government has played a key role in mitigating risks for the construction and financial sectors – and not households. By doing so, housing reforms have lacked a critical analysis of the socioeconomic and political implications of implementing strategies that have backed private interests in the name of expanding home ownership for the poor while in reality many low-income households remain locked out of adequate and affordable homes. The present research has implications for theories regarding how governing regimes operate to facilitate growth. The interactions and relationships between different government levels and private actors and interests since the implementation of a new housing finance and development model in Mexico have stemmed elaborate power structures and a multi-level regime and complex system of governance, distinct from that described by regime theorists whose focus has generally been on local governance (Stone 1989). Furthermore, this research exemplifies the ways in which this multi-level regime has reproduced and intensified socioeconomic and political (decision-making) inequities, ultimately fracturing the housing model itself.

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