https://orcid.org/0000-0001-9845-5000
![Sample our Geography journals, sign in here to start your FREE access for 14 days]({"type":"image" , "src" : "/sda/5937/TOC-Subject-Sample-2021-Geography.jpg"})
ABSTRACT
The main aim of this article is to analyze the participation of different government levels and institutions in promoting the financialization of housing in Mexico. Furthermore, it examines some of the implications of following this logic, particularly at the local and household levels, such as surmounting mortgage debt, the clustering of vacant and abandoned housing, and, ultimately, the reproduction of poor housing conditions. Since the late 1990s, millions of households have acquired mortgages to buy homes in the periurban fringes of Mexican cities. Such new sprawling housing developments, however, have offered limited access to economic opportunities, and have imposed a significant burden on local governments to provide infrastructure and services. Many families have also seen their mortgage debt increase, forcing many of them to leave their dwellings behind. By 2010, Mexico had the highest vacancy rate among member countries of the Organisation for Economic Co-operation and Development, and about a third of Mexicans still live in precarious housing conditions. Such paradoxical coexistence, I argue, exposes a tension between the financialization of and the right to housing, and the extent to which the former has trumped the latter.
Disclosure Statement
No potential conflict of interest was reported by the author.
Notes
1. Instituto del Fondo Nacional de la Vivienda para los Trabajadores in Spanish.
2. A secondary market of residential mortgage-backed securities (RMBSs) also helped expand mortgage access; by 2008, Mexico had become the largest market for RMBSs in Latin America (BMI, Citation2011; IMF, Citation2008).
3. Homex, Urbi, Geo, Ara, Hogar, and Sare.
4. Worker contributions correspond to approximately 60% of INFONAVIT’s income, loan recovery (including principal and interest payments on mortgages to about 37%), and financial products, such as securitization to about 2% (INFONAVIT, Citation2014).
5. Albeit densities are relatively high in these developments because of the small size of the housing units and the lack of public or open space in these areas, these developments are in distant periurban areas and disconnected from urban centers (see Appendices A and B).
6. Officially, housing shortage reflects the number or percentage of households living in overcrowded conditions or in very poor-quality housing. Overcrowding is defined as more than 2.5 inhabitants per room. Poor-quality housing includes that which does not have sewage, or is built with precarious materials: waste, cardboard, perishable/untreated wood, palm leaves, mud, metal sheets, asbestos, or dirt floors.
7. Although terms of credit vary widely, they have been particularly onerous for lower income households who obtained long-term mortgages in minimum salaries or investment units that have increased more than five-fold since the 1990s, on top of interest rates (see also Notes 16 and 18).
8. Before the reforms took place, INFONAVIT was actively involved in housing production. Nonetheless, given the rapid population growth experienced in many urban areas, INFONAVIT struggled to meet its own effective demand (Ward, Citation1990).
9. Sociedad Financiera de Objeto Limitado in Spanish.
10. Hipotecaria nacional, Su Casita, Patrimonio, Metrofinanciera, Banorte, Scotiabank, BBVA Bancomer, Santander, Hipotecaria Crédito y Casa, and ING Hipotecaria were among the most prominent partners (INFONAVIT, Citation2017).
11. Tecámac, Huehuetoca, Zumpango, Atlacomulco, Almoloya de Juárez, and Jilotepec.
12. CANADEVI: Cámara Nacional de la Industria de Desarrollo y Promoción de Vivienda (National Chamber of the Housing Development and Promotion Industry); CANACINTRA: Cámara Nacional de la Industria de la Transformación (National Chamber of the Transformation Industry).
13. Stock market debt was the second major source of financing for Mexico’s major developers during the housing boom.
14. In selected neighborhoods that were formally developed/approved in Tijuana (with a population of approximately 29,000), about a third of the housing units did not have access to one or more basic services (water, electricity, or drainage) in 2010. In Huehuetoca, of the selected formally developed areas (with a population of around 25,000), the proportion of housing units without access to basic services was lower but still substantial, at 13%. Moreover, close to 5% of households in these areas live in overcrowded conditions.
15. UDIs were introduced in the late 1990s to protect lenders while offering mortgages to people who previously were not creditworthy. Initially, 1 UDI was equivalent to 1 MxP, but in 2016 it was worth 5.4 MxP. UDI loans have had the highest delinquency rates.
16. Banks and mortgage lenders made about 850,000 loans from 2000 to 2013, most of them in UDIs (Marosi, Citation2017).
17. In 1995, the minimum salary was 15 MxP; it currently stands at 80 MxP.
18. Until the change to the current administration, INFONAVIT continued to hire private law firms to gain the repossession of houses with mortgage default.
19. Distance to employment is strongly correlated to housing abandonment; an increase in the distance to employment centers of 1 km correlates with the abandonment of an additional 500 units (INFONAVIT, Citation2015).
20. Vacancy data refers to both owner- and renter-occupied housing.
21. My estimates are very conservative because I only counted the houses that were visibly vacant or appeared from the outside to be abandoned. In Huehuetoca, I visited 32,252 housing units, of which 20.5% were clearly vacant or abandoned. These areas in 2010 had 24,213 inhabitants and a 66.6% vacancy rate. In Tijuana, I counted 11,630 housing units in three different parts of the city, of which 13.2% were vacant or abandoned. These areas in 2010 had a combined population of 23,335 inhabitants and a vacancy rate of 48.6%. My counts should not be directly compared with census figures but do provide a sense of present conditions.
22. Fuentes and Hernández (Citation2014) studied the correlation between vacancy rates and levels of property crime in Ciudad Juárez, Chihuahua, Mexico.
23. In 2012, Urban Growth Boundaries were drawn by the federal government in almost 400 Mexican towns and cities with more than 15,000 inhabitants. Although these boundaries are not compulsory, INFONAVIT decided to no longer grant mortgages outside of them, and SEDATU and CONAVI decided to no longer grant land and housing subsidies beyond them. Nonetheless, these boundaries were negotiated with developers, led to the production of higher income housing, and allowed private developers and landowners to absorb federal subsidies (Del Castillo, Citation2016; SHF, Citation2013, Citation2014).
Additional information
Notes on contributors
Alejandra Reyes
Alejandra Reyes has a PhD in community and regional planning and is an assistant professor of urban planning and public policy at the University of California, Irvine’s School of Social Ecology.