Association for Public Policy Analysis & Management

Sprawling housing developments that offer limited access to jobs, and impose a significant burden on local governments to provide infrastructure and services, have become a common attribute of Mexican cities. Furthermore, some households, struggling to keep up with their mortgage payments, have abandoned their dwellings to return to renting or to living with other relatives closer to the urban core. In 2010, Mexico had over five million vacant housing units and a 14 percent vacancy rate, while a third of Mexicans lived in poor housing conditions. This paper analyzes how policymaking at different levels has promoted housing production and vacancy, and discusses some of the implications for residents, government and financing institutions, and developers. I argue that recent housing strategies have fostered unregulated and speculative development without effectively addressing the housing needs of the Mexican population. The coexistence of an oversupply and a shortage also exposes the tension between opposing policy goals, promoting economic development and securing the constitutional right to adequate housing, and the extent to which the former has trumped the latter. This paper focuses on cases in two states: Baja California and the state of Mexico. The case studies were 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 strength at the local and metropolitan levels.