Remote workers descend on Mexico City and housing prices surge

KARINA Franco’s ornate Art Deco building in the historic centre of Mexico City has long been the heart of a downtown lifestyle, housing families of artists and activists and supporting an ecosystem of street vendors.

But as the pandemic upended office norms, a wave of remote workers from around the world descended on Mexico City, the country’s capital. The flow of foreigners has yet to slow down, causing housing costs to rise, displacing residents and upending the fabric of neighbourhoods.

In August, Franco and the other tenants in her building were told by their landlord that their leases would not be renewed. Some units soon appeared on Airbnb – at rates more than four times the monthly rent – and new neighbours, mostly speaking English, now fill the hallways.

Since the pandemic, Mexico City has become a leading global hub for foreigners unshackled from their offices by work-from-home policies and drawn to the kind of comfort a salary paid in dollars or euros can afford.

Between January and October, more than 9,500 permits were issued to Americans allowing them to temporarily reside in Mexico City, according to federal immigration statistics, nearly double the 5,400 issued in the same period in 2019. Many more entered on tourist visas, which allow them to work from Mexico for up to six months as long as they are paid abroad.

The influx has been a boon for business owners in areas popular with foreigners and landlords taking advantage of record demand for long-term stays on platforms like Airbnb. It has also helped Mexicans with spare rooms to earn extra income amid soaring inflation. But the surge has jolted the already tightening housing market, threatening to make large swaths of the city, where the average monthly salary is US$220, unaffordable to many locals.

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Mexico City’s leftist mayor, Claudia Sheinbaum, has sought to navigate the changing market by embracing the transplants and partnering Airbnb on a campaign that promotes the city as a “capital for creative tourism” that encourages foreigners to spend money in less well-off neighbourhoods.

But as the jump in American and European visitors fuels a rapid expansion of Airbnb, the mayor’s alliance with the rental giant has ignited an argument that’s enveloped the platform in other major cities, where critics have accused it of driving up housing costs.

Housing activists, wary of gentrification and a shortage of rental housing in the sprawling capital, have accused city leaders of spurring a modern day “colonisation” that is pricing out many Mexicans. Sergio Gonzalez, a housing activist, said there would be a “big problem” if the city government did not regulate the housing market at a time when remote workers are leading to the “forced displacement of families”.

Amid the backlash, the mayor has acknowledged that American and European remote workers may be putting pressure on housing prices and has directed the city’s housing authority to study the effect of Airbnb.

According to Airbnb, between April and June of this year, the number of stays booked in Mexico City on the platform for longer than a month increased by 30 per cent compared with the same period in 2019, making the city one of the more popular destinations worldwide among long-term renters.

In the Condesa and Roma neighbourhoods, whose lush streetscapes and dynamic food scenes have long made them attractive to wealthier residents, co-working spaces offering free coffee and cubicles have proliferated.

The city’s campaign with Airbnb, which is scheduled to fully roll out on the platform’s website early next year, is meant to spread out the crowds. It will promote guided activities, designed with the help of Unesco, the United Nations’ cultural organisation, in neighbourhoods that do not typically receive a high number of visitors, according to the company and city officials. Airbnb will also provide information on moving to Mexico, including visa requirements.

Miroslava Miyarath Lazcano Cruz, who has offered tours through Airbnb since 2019, started a new tour on Airbnb in October of Xochimilco, the working-class neighbourhood where she lives, that is serving as a model for the programme.

The experience has seen high demand, introducing tourists to the markets and customs of a part of the capital that’s not widely explored by outsiders. Lazcano Cruz said the visitors who have come through Airbnb have “a vision and a thirst to get to know the space in a different way”.

The increase in the number of foreigners living in Mexico City has coincided with a rise in rents. Average monthly rents citywide have jumped from US$880 in January 2020 to US$1,080 in November, according to data from Propiedades.com, a real estate website.

The uptick has been higher in more upscale neighbourhoods. In a slice of Condesa that borders Chapultepec Park, one of the city’s larger green spaces, monthly rents rose from US$1,610 in January 2020 to US$2,250 in November, driven mostly by the arrival of remote workers, said Leonardo Gonzalez, an analyst at Propiedades.com.

Many are finding homes on a short-term basis on Airbnb, which is squeezing the available stock of long-term rentals, housing experts said.

Cities around the world, including Barcelona, London and New York, where housing costs have increased sharply, have targeted Airbnb by imposing stricter rules for short-term rentals.

In Mexico, a spokesperson for Airbnb said the company was working with government officials “to be part of the solution to the challenges faced by communities in Mexico City”. The company also stressed the financial benefits for people who rent out rooms on the platform: More than half of Airbnb hosts recently surveyed by the company in Mexico City said the extra earnings helped cover an increase in food costs driven by inflation. NYTIMES