Massachusetts Institute of Technology publishes study on housing improvement in Mexico

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For housing access to improve in Mexico, financial support such as mortgages or subsidies, along with greater buy-in from local governments and the private sector, is key, according to a study published on Tuesday, February 28th.

“The idea is to now turn the focus to the poorest 20%, 30% of Mexico’s population,” Albert Saiz, a professor at the Massachusetts Institute of Technology (MIT) who led the study, told Reuters ahead of its publication.

To reach the poorest Mexicans, urban housing must become three to four times denser than current levels to keep up with surging demand, Saiz and his fellow MIT researchers argue in the study.

This would require a multi-sector initiative tackling supply, including government subsidies for new developments in coordination with the private sector, Sainz said.

“The private sector is needed in reaching that poorest 20%,” Saiz said, urging cooperation with local governments and developers, non-profit groups or even the use of communal land plots known as ejidos to increase housing access.

Local governments also have a proactive role to play by planning for growth and expanding utilities, the researchers said. In Mexico City, water access has led to increasing tensions between long-established communities and new developments.

In Mexico, where access to credit is low and many workers are outside the formal economy, financing for housing remains low and many turn to self-constructed builds.

About six in 10 new builds in Mexico are built by owners, the study, backed by Colombian startup La Haus, found. Government data on housing is scarce.

Mexico’s public housing policies, which have targeted the middle class through underwriting loans, can go further in extending housing access by shifting or increasing direct subsidies to the lowest income bracket, Sainz argues.

“This is a historic moment for Mexico,” Saiz said, pointing to increased demand for housing amid population growth and a projected boom in nearshoring, or firms moving operations closer to home.

“If there’s political stability and a little bit of consensus among parties, it can be done.”

Source: Excelsior

The Mexico City Post