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Daily Mexico News Blog
Free Mexico News Daily in English

Government Proposes Measures to Regulate Rent Increases in Mexico City

Mexico City, July 31, 2024 – The Head of Government, Martí Batres, has presented a significant proposal to the Congress of Mexico City aimed at regulating and limiting the increase in rent prices within the capital. This proposal, which has been submitted by the Secretary of Government, Ricardo Ruiz, to Gabriela Salido, President of the Board of Directors, is set for analysis and discussion in the upcoming legislative sessions.

Addressing Rent Hikes: A Government Priority

During the submission of the proposal, Ricardo Ruiz emphasized the growing concern within the local government regarding the continuous rise in rental prices. Highlighting the initiative’s critical elements, Ruiz stated, “We believe that this is a very important key that helps the people of the capital, that gives legal certainty to both parties of this lease contract, and that also serves the City to regulate a phenomenon that is fundamental.”

Key Components of the Proposal

The initiative outlines three main axes:

  1. Capping Rent Increases: The proposal seeks to ensure that rent increases cannot surpass the inflation rate reported by the Bank of Mexico from the previous year. This would effectively replace the current 10% cap on rent hikes.
  2. Digital Registry of Rental Contracts: To enhance transparency and accountability, the proposal mandates the creation of a digital registry for all rental contracts, with landlords required to register within 30 days of signing the lease.
  3. State-Built Rental Housing: The initiative includes provisions for the government to engage in the construction of affordable rental housing, particularly for individuals with lower incomes.

Analyzing the Need for Regulation

The Secretary of Urban Development and Housing, who was also present during the proposal’s reception, explained that an in-depth diagnosis revealed a significant increase in rents since 2013, outpacing both inflation and wage growth. This trend has prompted the local government to take decisive action.

The Secretary also referred to a recent forum held with various sectors, which underscored the necessity of this initiative. “There is a consensus on the need to build mechanisms that help us achieve the necessary balance in the rental market. We have also found consensus on a set of structural solutions, which, above all, have to do with the possibility of increasing and improving the supply of adequate and affordable housing in the City,” the Secretary noted.

Legislative Amendments Proposed

The initiative proposes amendments to Article 2448 D of the Civil Code of Mexico City to enforce that “the increase in rent is never greater than the inflation reported by the Bank of Mexico in the previous year, with respect to the amount agreed as monthly rent.” Furthermore, Article 2448 F is to be amended to establish a digital registry of lease contracts, compelling landlords to register leases within 30 days of signing.

Additionally, the proposal aims to modify the Housing Law of Mexico City to ensure the public production of affordable rental housing, a measure targeting the provision of housing for lower-income residents.

A Long Overdue Debate

Gabriela Salido, President of the Board of Directors, reflected on the historical context of this proposal, noting that since the VI Legislature of the defunct Legislative Assembly of the Federal District (ALDF), no substantial proposal related to housing rentals had been presented by the Executive Branch. “From that moment until now we have not had the opportunity to take up the issue with the necessary formality, and I hope that this initiative by the Head of Government will be the opening and the door for us to enter into a serious debate in terms of the City,” she stressed.

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