The Mexico City legislature recently passed an extensive rent control law, marking the most comprehensive legislation on rent control since the 1940s. The new law limits rent increases to the previous year’s inflation rate, aiming to address rising rents and housing-related issues in the city.
In the 1940s, rent levels in the city’s older buildings were frozen and remained unchanged for many years until regulations were eased in the 1990s. The updated law also mandates landlords to register all rental agreements with the city, although it remains uncertain if landlords can charge more for property improvements.
Despite concerns about escalating rents due to factors like digital nomads and short-term rentals, the issue primarily impacted specific tourist-centric neighborhoods near the city center. Legislators highlighted the impact of rent hikes on traditional residents and emphasized the need for regulation in the housing market.
While the new law addresses rent control, it does not directly tackle the fundamental issue of housing shortages in the city. With an estimated need for approximately 800,000 additional housing units, the legislation may have implications for investment in residential construction by private developers.
President-elect Claudia Sheinbaum has proposed a rent-to-buy initiative to assist low-income tenants in acquiring property. This program would allow reduced-rate rent payments to contribute towards a future home purchase with the aid of government housing loans.
The city faces challenges related to housing inequity, as construction costs and property prices remain unattainable for many residents. The government’s focus on increasing access to affordable housing solutions and promoting long-term stability in the real estate market will likely shape future housing policies in Mexico City.