Policy-Induced Suburbanization: Mass-Produced Housing and Location Choices in Tijuana, Mexico

ABSTRACT

Mexican cities began an urban expansion process fueled principally by public mortgage supply in the early 2000s. The new urban landscape, comprising mass-produced suburban housing developments for low-income families, deepened socioeconomic differences. For years, developers have claimed land prices are the reason for suburban expansion in Mexico, not policy-enabled construction economies. This study tests the hypothesis that cost reduction strategies through scale economies explain the suburban location and the homogeneous landscape built under the reformed mortgage system. Using data on housing production costs for Tijuana, the results show that building homes using technology developed during policy implementation yields scale economies and reduces building costs. Additionally, statistics on housing developers’ location decisions illustrate how production economies have contributed to a landscape that increased segregation, exclusion, and housing vacancy in Mexican cities.

KEYWORDS:

• housing finance
• housing affordability
• suburbanization
• mass production
• Mexico

Acknowledgments

This research benefited from the revision and comments of Drs. Tito Alegría Olazábal and Paavo Monkkonen.

Disclosure Statement

No potential conflict of interest was reported by the author.

Data Availability Statement

Data collected and used for this study are available from the author upon request ibit.ly/CWtL.

Notes

1. For the same period, the data reflect the number of new homes purchased with a mortgage in Mexico (CONAVI, 2018). These homes are built and sold speculatively by private companies.

2. Low-income housing in Mexico refers to dwellings that have a purchase price of no more than 200 monthly minimum wages (< US$23,500). Families that earn 4 times the monthly minimum wage or less qualify for a one-time subsidy to purchase social housing.

3. Before the Commitment for Housing agreement in 1998, the Mexican government and private entities signed The Alliance for Housing in 1996 (Ejecutivo Federal, 1996) and the Coordination Agreement for Housing Development in 1992 (Instituto del Fondo Nacional de la Vivienda para los Trabajadores [INFONAVIT], 1992). These two documents presented a more diverse approach to attend to the housing shortage in Mexico, including financing for self-construction. In contrast, the Commitment for Housing was a package of incentives exclusively focused on the production of new homes through private companies.

4. Growth rate estimation is based on data from the 1990 and 2000 censuses (Instituto Nacional de Estadística y Geografía [INEGI], 2019).

5. Informal employment accounts for 26.5% of total national employment; for Tijuana, it accounts for 19.6% (INEGI, 2019).

6. Data estimation is based on the 2000 and 2010 National Population Censuses (INEGI 2019).

7. Data estimation is based on georeferenced information on housing development authorizations from 2002 to 2014 from Tijuana’s urban administration department.

8. Percentage estimates are based on the national price index for December 2003 to December 2014 (INEGI, 2019).

9. Data estimation is based on the 1998 and 2008 National Economic Censuses obtained from the National Institute of Statistics, Geography and Computing (INEGI, 2019).

10. Informants did not share data from before 2007. Some of the reasons they gave for this included data being lost because of computer equipment failure and difficulty finding the electronic archives where the information was stored.

11. For 2017, mortgage lenders classified homes according to selling price as follows: below US$23,500 as low-income housing (economic and social); from US$23,500 to US$41,000 as medium-income housing (traditional and medium); and those priced above US$41,000 as high-income homes (residential and residential plus). I estimate income brackets following INFONAVIT guidelines (Comisión Nacional de Vivienda, 2010). For this estimate, I use the minimum wage and the average currency rate for 2017.

Additional information

Funding

The writing of this article was supported by an International Fellowship awarded by the Urban Studies Foundation and by a Mexican National Council of Science and Technology (Consejo Nacional de Ciencia y Tecnología—CONACYT) Postdoctoral scholarship.

Notes on contributors

Dinorah Judith González-Ochoa

Dinorah Judith González-Ochoa holds a PhD in social sciences from el Colegio de la Frontera Norte. She is currently an Urban Studies Foundation (USF) International Fellow and a postdoctorate fellow at the UCLA Luskin Latin American Cities initiative. Here she participates in a study on urban planning policy and governance in Mexican Cities. Her dissertation analyzed how production imperatives in housing construction shape Mexican cities’ built environment. She hypothesized that this spatial pattern is the result of strategies adopted by housing companies that seek to reduce production costs. These decisions are imperative to offer a housing unit that qualifies for subsidized mortgages. Her research findings help explain the recent suburbanization of the low-income population in Mexican cities and why urban contention policies have not reversed it. She participated in Transboundary Region Mexico–Guatemala: Regional Dimension and Bases for Its Integral Development, a multidisciplinary research project financed by the Mexican Institutional Fund for Regional Development for Scientific, Technological, and Innovation Development (FORDECYT). She has taught at Universidad Iberoamericana-Tijuana, Escuela Libre de Arquitectura, and the Department of Education of Baja California, all in Mexico.