Mexico City – Significant reforms to the Civil Code were officially published on Wednesday, August 28, 2024, marking a critical step in addressing the soaring cost of housing in Mexico City. The newly enacted legislation, aimed at curbing excessive rent increases, ensures that rental prices will not surpass the inflation rate reported by the Bank of Mexico. This development was announced by Martí Batres, the Head of Government of Mexico City, who emphasized the reforms as a move towards greater social justice for the city’s residents.
The decree, published in the Official Gazette, includes amendments to the Civil Code for the Federal District and the Housing Law for Mexico City. These changes are designed to prevent the unchecked rise in housing rents and lay the groundwork for the production of affordable public rental housing, particularly for low-income individuals.
“Today marks a significant milestone as we publish the reform regarding limits on housing rent increases in Mexico City. This is a decisive action to halt the excessive rent hikes that have plagued the capital,” said Batres during the announcement. He highlighted that in previous administrations, rents in the capital increased at a rate eight times higher than inflation, making these reforms one of the most impactful in recent history.
Batres described the modifications as “an act of social justice,” aimed at safeguarding the right to housing for low-income families. The reforms are expected to reduce the disparity between inflation and rent costs, prevent rental abuses, and provide greater certainty for both tenants and landlords. Additionally, the reforms are seen as a measure to counteract the ongoing gentrification of Mexico City and the displacement of its poorest residents.
The reforms, approved by the city’s Congress on August 22, specifically amend articles 2448 D and 2448 F of the Civil Code. A crucial addition to the Civil Code stipulates that “the increase in income will never be greater than the inflation reported by the Bank of Mexico in the previous year,” providing a clear benchmark for lease negotiations.
Furthermore, the legislation mandates the creation of a digital registry for rental contracts, to be managed by the Government of Mexico City. Landlords are required to register their contracts within 30 days of signing, ensuring greater transparency and oversight in the rental market.
In addition to changes in the Civil Code, the reforms to the Housing Law include modifications to articles 60 and 73. These changes establish the foundation for the Government of Mexico City to implement a policy for the mass construction of low-cost rental housing. The target beneficiaries of this policy include individuals living in poverty, young people, single mothers, and workers.
Batres noted that similar government-led initiatives to construct affordable rental housing have been successfully implemented in other major cities around the world, such as Paris, France. He underscored the necessity of such measures in Mexico City, stating that “the real estate market does not produce housing whose cost is within the reach of the working classes.”
Looking ahead, Batres expressed confidence that the incoming administration, led by the elected Head of Government Clara Brugada (2024-2030), will carry forward the tasks outlined in these reforms, particularly the construction of affordable housing. The new policies are expected to have an immediate and positive impact on the city’s rental market, ensuring that housing remains accessible to all segments of society.
This reform represents a pivotal moment in the ongoing efforts to address housing inequality in Mexico City, reinforcing the government’s commitment to protecting the rights of its most vulnerable residents.
