Housing in Mexico is in crisis

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By: Fernando Soto

In our country, the most important asset for most people is their house or apartment and the worrying thing is that this wealth and middle class trigger, after five disastrous years due to the total lack of adequate public policies, is in full crisis.

To begin with, let’s consider that we closed 2023 at delicate levels of new housing construction with almost 100 thousand fewer homes than in 2018. It is completely false that more than 2 million homes were built in this six-year term that, fortunately, is in its final stretch. What is true is that mediocre housing actions have been implemented to remodel or expand them.

The reality is that the necessary housing has not been built for a population that grows year after year and needs to meet this need. For some years now there has been very little formal housing available and that has generated a very significant increase in prices that today is more than evident.

This is nothing new, at least for four years I have emphasized this problem that began to become evident with the decrease of construction projects of basic and medium housing in the CDMX, as well as in most of the cities of the whole country due to the lack of confidence of developers and investors and what to say of the nonexistence of public programs to support the first housing of Mexicans with scarce economic facilities and, of course, of the middle classes.

The authorities have ignored this problem and therefore those who today seek to buy their first house or apartment do not find affordable options, the only thing they find are high prices caused by the lack of sufficient housing supply.

Let’s review the context that brought us here: in the administration of Enrique Peña Nieto, which was plagued by corruption and ineptitude, incredibly many problems related to housing began to be corrected. In previous governments, many inadequate houses were built which in the end caused hundreds of thousands to be abandoned because they were too far away or poorly built. With Peña Nieto, construction in remote areas was stopped and federal resources were denied for any type of development that was not located in metropolitan or nearby areas.

With these measures, the construction of the so-called dormitory cities that were erected in the Fox and Calderón administrations was avoided. What we have suffered in the government of Andrés Manuel López Obrador is that subsidies for basic housing were eliminated, very little first housing was built and the fight against corruption was not supported. We have to say in capital letters that this is a huge failure and the data published by the Single Housing Registry confirms it.

My particular concern is the almost complete disappearance of the construction of basic housing for the socioeconomic segments that need the most support.

In this government, self-construction without supervision was largely privileged, which, in my opinion, has been very damaging for Mexican families, since most of the houses that are built through this mechanism do not generate value and, therefore, hundreds of thousands of people do not see their assets grow. In addition, they are usually built in irregular settlements that do not offer any legal protection.

What should have been done is to continue supporting the process of asset formation of families in Mexico based on their needs through formal housing within urban areas with adequate services.

From my point of view, it is urgent to develop consistent public policies that facilitate the construction of housing at all socioeconomic levels, we must return to the subsidy that existed for basic housing and we must combat, without political ends, the extortion and corruption that exists in the real estate development industry.

Unfortunately, as the saying goes: the child drowned, the well must be covered. The consequences are already being experienced by hundreds of thousands of middle class families and people with more limited resources. The challenge will be, in effect, listening to those who have 100% technical capacity and integrity to carry out the reactivation of this vital sector for Mexico’s economy, which has come to represent more than 6% of the national GDP.

Source: El Universal