Is Airbnb ruining Mexico City for locals?

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Alexandra Dunnet in her apartment in Mexico City. She says she is the last long-term tenant in her building; the rest of the units have been converted to Airbnbs. Photo by Emily Green/VICE World News.

MEXICO CITY—Alexandra Dunnet loves her two-bedroom apartment. It’s nothing fancy but the location, in a bustling upscale bohemian neighborhood full of cafes, restaurants, and parks, is enviable. Then, last year, the owners of the building began evicting its tenants and converting their apartments into Airbnbs. Dunnet pays 10,200 pesos, or $520, for his seat. Identical apartments in his building now cost $4,000 a month on Airbnb.

Over the past two years, Mexico City has become a paradise for well-paid digital nomads from the United States who are drawn to what locals have always loved: the mild weather, great food, vibrant atmosphere and nightlife. tremendous. They can also afford to pay rents more in line with New York and San Francisco, displacing longtime residents, even unintentionally.

“It’s really sad because it was a large community of neighbors that was dispersed in a very violent way,” said Dunnet, a Mexican actress and writer who says she is the last long-term tenant in her building. She expects the landlord to convert her apartment into an Airbnb when her lease ends in February. The building is managed by the company “Mr. W”, whose motto is “Hotels are boring”.

Allegations that Airbnb is pulling much-needed units off the market and driving up prices have spread around the world: San Francisco, New York, Amsterdam, Barcelona, ​​the list goes on. But unlike those cities, which have sought to restrict Airbnb, Mexico City is embracing the platform, much to the dismay of many locals.

In October, the Mexico City government signed a OK with Airbnb aiming to attract digital nomads to the city by in part encouraging hosts to offer lower rates for longer stays. Mayor Claudia Sheinbaum said the deal — details of which have not been made public — will also benefit neighborhoods that haven’t seen the influx of tourists through Airbnb tours and help bring in $1. an additional $.4 billion per year. benefit the residents.

But the deal has sparked a wave of backlash, especially among residents who have been barred from neighborhoods they have long called home. Earlier this month, dozens of people gathered outside Mexico’s Ministry of Urban Development and Housing to protest the deal, holding signs such as “Gentrification = colonization” and “My city is not a merchandise”.

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People demonstrate for decent housing in front of the Ministry of Urban Development and Housing in Mexico City (SEDUVI) in Mexico City on November 17, 2022. Photo: Guillermo Gutiérrez/NurPhoto via Getty Images

On average, Mexicans living in Mexico City earn the equivalent of $3,800 a year, according to Mexico’s National Institute of Statistics and Geography. Many professionals, from accountants to journalists, earn between $20,000 and $25,000.

That income is only a fraction of the kind of money earned by Americans moving to Mexico City, most of whom earn in dollars while working remotely, a practice that has become normal during the pandemic. Department of the Interior data shows that 8,412 U.S. citizens received temporary resident visas in the first nine months of 2022, an 84% increase from the same period in 2019, the year before the pandemic. The statistics do not take into account the large number of Americans who live in Mexico for long periods of time using tourist permits that they can extend when leaving and re-entering the country.

While Americans and other foreigners have long resided in many of Mexico City’s more upscale enclaves, their presence over the past two years has become particularly pronounced. Residents are as likely to hear English on the streets as Spanish in areas such as Roma and Condesa, and their streets are awash with huge English-language signs advertising homes for sale and for rent.

Housing prices have soared in areas favored by Americans. Rents have risen 8% in Mexico City in the two years since the pandemic, according to Homie, a real estate platform in Mexico City. But in Condesa, the upscale bohemian neighborhood where Dunnet lives that attracts many foreigners, prices have skyrocketed 40% in the first six months of 2022, Homie reported.

And it’s not just housing. For everything from coffee to boxing lessons in the park, prices at many establishments and areas popular with Americans are cheap by their standards, but unaffordable for the majority of Mexicans.

Experts disagree on Airbnb’s role in driving up prices.

In September, there were nearly 19,000 Airbnb rentals available in Mexico City, a 10% increase from 2019, according to AirDNA, which analyzes vacation rental data. Airbnb units make up about 2% of Mexico City’s rental housing stock, said Rosalba Loyde, a professor at the National Autonomous University of Mexico who studies sociology.

“In hard numbers, that doesn’t seem like a lot. But the growth in recent years has been exponential,” Loyde said. “When it’s 10%, are we going to say that it’s not a lot?”

Loyde wants Mexico City to regulate Airbnb the same way Barcelona does, banning short-term private room rentals and requiring those who rent out entire apartments to have the proper licenses.

Instead, Mexico has prioritized collecting taxes from Airbnb units — various taxes can add up to 30% of the rental price. While hosts typically pass these costs on to their guests, some have decided renting on Airbnb isn’t paying off and have removed their properties from the platform.

Many housing experts have said it’s too simplistic to blame Airbnb.

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Alexandra Dunnet in her apartment in Mexico City. She thinks the building’s owners will put it on Airbnb when its lease expires next year. Photo: Emily Green for VICE World News.

“With the exception of very few specific properties in prime locations, the economy doesn’t pay to take apartments off the market and put them on Airbnb,” said Francisco Andragnes, chief executive of Homie. He and other property investors say a bigger factor is bureaucracy that has stalled the construction of new apartment buildings in the city.

After taking office in December 2018, Sheinbaum, the mayor of Mexico City, suspended the construction of major urban development projects, including housing, to prevent excessive growth in the capital. This also follows the devastating earthquake in 2017 in which several new apartment buildings collapsed, partly due to corruption in the permitting process.

“They stopped a lot of the development in the city and the big projects for several months, and when they decided you could keep building, that’s when Covid hit and the projects didn’t work. have ever taken off,” Andragnes said.

“Airbnb is pulling inventory from the market and definitely making it worse. But the fact that we can’t build is a bigger problem than removing those units from the market,” said Rodrigo Suarez, co-founder of real estate platform HASTA Capital. development and investment.”A huge wave of demand is hitting a very weak supply environment, so of course rents will go up.”

Ari Goot, a real estate developer, moved to Mexico City in January, eager to take advantage of the booming real estate market. He bought an apartment in Condesa and is in the process of renovating it. He has also rented a luxury apartment, which he is trying to sublet on Airbnb for double the price he is paying.

Goot said he is sensitive to the issue of gentrification, but also thinks the complaints are overblown. “You can’t take the good without the bad. If there were no foreigners coming, would it be better for Mexico City? They bring in a lot of money and support all these Mexican businesses and employ and hire people.

If the business does well, Goot said, he plans to buy more properties and rent them out on Airbnb. He thinks more and more Americans will continue to move to Mexico City, drawn by the same factors he values: culture, cost of living and the diversity of people.

“It’s Mexico City time!” he said.

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