Nov 17, 2022 - World

Mexico City's Airbnb bet ruffles residents with spiking rents

Illustration of the Mexican Coat of Arms, with the eagle perched on the Airbnb logo.

Illustration: Allie Carl/Axios

Mexico City is betting big on digital nomads despite concerns that they're driving up rental costs and pricing locals out.

State of play: Data from Mexico's National Institute of Migration shows a record number of Americans have migrated to Mexico since the pandemic began. Many come to work remotely because the cost of living is so much lower than in the U.S.

  • Lots of them use Airbnb, which has seen a 30% increase in long-term rentals in Mexico City since 2019, the company says.
  • Rents in the most trendy areas of Mexico City have increased by about 15% since the first quarter of 2021, according to a report in El Economista and to data available on a real estate website. Most locals aren't happy about the influx of American workers.

Driving the news: Airbnb and the Mexico City government signed an agreement last month that facilitates work-from-home tourism by promoting listings on the platform and incentivizing Airbnb hosts to offer discounted rates for longer stays.

  • The Mexico City government promises the agreement will bring in $1.4 billion a year in tourism spending that will trickle down to local residents.

But tenants' rights organizations and renters say the agreement will further raise rents and segregate the city by forcing out renters who can't afford higher costs, especially the elderly, Indigenous people and young adults.

Zoom in: After nine years of renting an apartment in the touristy Condesa neighborhood, Paty Maciel was told she had 10 days to move out because her landlord wasn't renewing anybody's lease in the building, she told Axios Latino.

  • The landlord didn't explain why, but most of the apartments are now Airbnb listings, Maciel said, and their monthly rates are up to 10 times more than what she paid when she lived there, which was $400 a month.
  • "I get owners can do what they wish with their property, but the fact that it's legal doesn't make it right. And the government, instead of regulating in favor of those who are vulnerable, is inviting more people to do it," Maciel said.

What they're saying: Mexico City Mayor Claudia Sheinbaum said last month that inflation has also contributed to spiking rents and that there's no evidence Airbnb rentals are the sole cause. She added that many of the neighborhoods seeing increased rents have long been in high demand.

  • The Airbnb partnership will also help showcase and lure people to less visited areas through an association with the United Nations Educational, Scientific and Cultural Organization.
  • Airbnb didn't respond to requests for comment from Axios but the head of the Mexico office said during a news conference recently that its services provide locals with a source of income in response to a question about concerns of spiking rents.
  • But renters and housing groups say that many of the listings on AirBnb are owned by big companies, not individual local owners.

The big picture: Cities worldwide have grappled with how to reconcile the allure of tourism via Airbnb and similar rental platforms and their disruption on neighborhoods in the past few years.

  • Barcelona, Amsterdam and San Francisco have in recent years put restrictions on how Airbnbs can operate long-term rentals in response to concerns over housing affordability.

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