DIGITAL NOMADS: THE REASON THAT THE INHABITANTS OF CDMX ARE ABANDONING THE CAPITAL
Sure sounds attractive. Living in a cosmopolitan city, in an 80-square-meter apartment, located in one of the most chic neighborhoods, with first-world gastronomy at hand and all services just a few blocks away on foot. All, in addition, while you work remotely in a company that pays in dollars or euros, while you pay rent in Mexican pesos. This is how digital nomads think.
Like remote work, digital nomads are children of the COVID-19 health crisis. After long months of confinement, some countries —such as Mexico— relaxed the measures so that more consumers would come to reactivate the local economy. Especially in the capital and other cities that traditionally attract foreign tourism.
Mexican authorities, however, did not foresee that this migration would be massive — and that it would be here to stay. Nor was it clear that, on the horizon, an unusual gentrification was seen to come in the most affluent neighborhoods of the city, and how this would negatively impact housing in the capital. This is how the forced exodus of the capital began: because of the digital nomads.
A more flexible lifestyle
A November 16, 2022 New York Times article gives a detailed guide on how to be a successful digital nomad. Nora Walsh, the author of the text, talks about how the coronavirus pandemic prompted remote work to open the world’s borders.
The phenomenon, says the journalist, woke up in 2021: just when the sanitary measures were relaxed, and people from first world countries had the budget to travel while they continued working. As customs became more flexible, companies embraced remote work as a functional alternative:
“[…] many companies are acknowledging seismic changes in the workplace and giving their employees greater flexibility over where they work, both long and short term,” Walsh writes.
The text runs in an almost festive tone, of adventure: why not take advantage of the fact that the pandemic allows us to work from anywhere? What could go wrong? His article does not address the consequences of this more ‘free’ lifestyle for those who can afford it. Much less, in terms of how it has affected the local population of the countries where digital nomads settle.
Work from wherever you want: what does this neoliberal policy mean for host countries?
Global companies such as Google, Spotify and AirBnB have adopted the Work From Anywhere policy, which literally translates as ‘work from anywhere’. As long as the objectives are met, according to this new work modality, it is not necessary to be in the office. In order to reactivate the local economy, countries like Norway, Portugal and Spain have launched special visas so that digital nomads can work from their countries, under certain conditions.
Mexico has not handled itself like this. Rather, like tourists, digital nomads can come and go as they please. And what’s more: staying for an indefinite period of time, encouraging residential space rental platforms —such as AirBnB— to raise rental prices per night, and even per month.
In an indirect way, this has prompted foreigners to choose to stay and live in Mexico City: they like the lifestyle that, otherwise, they would not be able to access in their countries. Neighborhoods like La Condesa or Roma Norte, which are identified as the most iconic for luxury bohemian life in the capital, are overflowing with foreigners. To the point that in restaurants and bars, even national ones, the menu is offered in English.
A forced exodus
Although indeed, this phenomenon has raised the income of those who manage these properties, the residents and workers of these neighborhoods are seeing themselves displaced. The journalist Isabella Cota describes the phenomenon very well for El País: the purchasing power of digital nomads is ” well above the national average “. And what’s more: “the already very high general inflation is getting worse .”
While rental prices in these neighborhoods rise, digital nomads settle in the capital’s trendy cafes to work remotely. They arrive for breakfast while they take their meetings remote, to move on to brunch elsewhere. That’s how they spend 3 or 4 months, explains Cota: between luxury cafes and the vibrant nightlife of Mexico City.
And they can afford it, explains the journalist, because they have an average salary of more than 5,000 euros. This translates to more than 100,000 Mexican pesos, which is much higher than the average salary of a person in Mexico. For this reason, foreigners who come to live in the capital can easily access apartments for themselves in the wealthiest neighborhoods in the city, while locals can not bear the increasingly higher prices of their own neighborhoods.
And the economic benefit?
The original claim has been fulfilled: welcoming digital nomads —without visas, without excise taxes— of course, has generated economic benefits for Mexico. However, these profits are encapsulated among the property owners, and do not really reach the other people who live in the capital.
Even so, Airbnb signed a controversial agreement with the CDMX Government, endorsed by the head of government Claudia Sheinbaum. In this, it is intended that more digital nomads arrive in the city, implicitly promoting the exodus of locals in favor of foreigners with high purchasing power.
And what is more: together, both parties are promoting Mexico City as a center for digital tourism, as announced in a statement .
As a result, the inhabitants of the most visited cities in the country have mobilized to stop this elite migration. Both on social networks and in public squares, the local population has expressed their discontent with the support shown by the Mexican government for this type of displacement, which favors the enrichment of landowners —and leaves those who have to pay rent unprotected in pesos.
Sheinbaum responded to the criticism by saying that the intention is not “to skyrocket rents”. However, the economic phenomenon does not depend on statements in press releases. Perhaps foreign media coverage has been too lax with digital nomads. Romanticizing the state of life that is spent in dollars is underestimating that of those who pay for it in their national currency.