In the wake of the recent US housing market crash, images of abandoned homes on the urban periphery of American cities dominated international media coverage, and when Mexico experienced its own vacant housing crisis in 2013, media outlets such as the New York Times, the Economist, and the Wall Street Journal covered the story through this same narrative lens of half-empty developments and residents stranded in sprawl.
Yet while these pictures and stories make for compelling journalism, according to research by urban planning professor Paavo Monkkonen they capture only one aspect of the Mexican housing crisis, and more crucially, they serve to distract focus away from the most urgent problems confronting housing in Mexico, such as reforming the housing finance system and addressing vacancy in urban cores.
Monkkonen discussed his research and ideas in a recent presentation at the Institute of Social Research of the Universidad Nacional Autonoma de Mexico in Mexico City on September 8. The talk, entitled “Housing Finance is Urban Policy: INFONAVIT, Vacant Housing, and Urban Growth” in Mexico, was based on two ongoing research projects Monkkonen is conducting in collaboration with the Organisation for Economic Co-operation and Development (OECD) and the World Bank. Both projects are motivated by the housing vacancy crisis in Mexico caused by a finance system that hinders both the construction of new homes and the improvement of existing units in city centers.
As part of a series called the Ciclo La coyuntura nacional a debate, Monkkonen presented a vision of how the Mexican government could shift its approach to housing finance. He submitted four general areas for reforming urban policy in Mexico, including reforming the housing loan allocation system, increasing investment in the institutional infrastructure of the primary housing market (for example, property registries and cadastres), raising property taxes and placing more effort into collecting them, and encouraging urban density by promoting public transportation, eliminating parking requirements for new buildings and increasing the cost of operating private automobiles.
Monkkonen’s talk and research was picked up by several Mexican blogs and media outlets, such as Entrelineas and Impulso Informativo (in Spanish). Coverage in English can be found at the Mexico Daily Review.
Dr. Monkkonen first examined Mexican housing in his doctoral dissertation. According to Monkkonen, the Mexican housing vacancy crisis stems in part from housing finance policies that began in the 1990s, and the first of his current research projects focuses on vacant housing through analysis of rates of vacancy in the center and periphery of the 100 largest cities in Mexico, as well as their determinants. Findings show that although the high rates of peri-urban vacancy are a problem, there are a greater number of vacant units in the centers of Mexican cities. Additionally, there is a strong association between central city vacancy and housing finance, suggesting that the country’s housing policies have facilitated a suburbanization of urban populations.
Monkkonen’s second project focuses on urban growth patterns in Mexico and changes in the distribution of people and jobs within cities. Preliminary results reinforce the findings of the vacancy study, showing a loss of population in the center of 70 of the 100 largest cities in Mexico, concurrent with robust urban expansion.
Both of these research projects reinforce the Mexican government’s current shift towards the support of urban infill and higher density development. However, Monkkonen argues that the goal of urban infill will only be achieved with larger and more comprehensive reforms of the Mexican housing finance system than those currently proposed.