Written in CDMX on 2/10/2024 · 22:15 hs
The Mexico City Congress has approved an opinion that regulates the eventual tourist accommodation service provided through digital platforms in the capital. But… what does this mean? Here’s an explanation.
The approved opinion adds a fourth paragraph to Article 61 Sexies of the Tourism Law of Mexico City, Article 36 Bis to the Housing Law for Mexico City, and a paragraph to Article 22 of the Law for the Comprehensive Reconstruction of Mexico City, to balance the competition between short-stay tourist accommodations and traditional hotels.
Deputy César Emilio Guijosa Hernández, from the Morena Party, stated that digital platforms have disrupted the functioning of accommodations in Mexico City, leading to various negative externalities, such as gentrification and rising housing prices.
For this reason, he emphasized that regulating tourist accommodations helps achieve market balance, protecting the interests of hotel establishments and preventing the saturation of homes used solely for this purpose.
The Morena representative, Cecilia Vadillo Obregón, expressed her support for the ruling, indicating that its objective is to ensure affordable rental housing for the population, especially in the municipalities of Benito Juárez, Miguel Hidalgo, and Cuauhtémoc, which have been most affected by rental competition from the Airbnb platform.
However, some deputies, such as PAN member Diego Orlando Garrido López, opposed the measure, arguing that this reform “contradicts private property rights and individual freedom.” He also noted that it should not be the State’s role to dictate how real estate is utilized.
What does the approved reform entail?
On one hand, this reform introduces a limit on accommodations via digital platforms in the Tourism Law; specifically, it sets a restriction on the permissible percentage of annual occupancy.
A maximum occupancy rate of 50 percent per year has been established for accommodation units registered on digital platforms. Additionally, properties that exceed this occupancy percentage will not have their registration renewed.
The reform states that “properties which cannot be renewed for exceeding the established annual occupancy percentage may be re-registered after one year from the refusal.”
The approval also includes an explicit prohibition in the Housing Law and the Law for the Comprehensive Reconstruction of Mexico City on registering and offering, through digital platforms, properties designated for social housing or homes rebuilt after the earthquake of September 19, 2017, as these serve a social purpose.
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New Regulations for Tourist Accommodations in Mexico City: A Deep Dive
Written in CDMX he 2/10/2024 · 22:15 hs
Overview of the Recent Legislative Changes
The Mexico City Congress has recently approved a significant opinion aimed at regulating the tourist stay services offered through digital platforms across the capital. This new legislation seeks to level the playing field between short-stay tourist accommodations and traditional hotels.
Key Changes in the Legislation
The approved opinion amends several laws, including the Tourism Law of Mexico City and the Housing Law. Here are the salient points of the new legislation:
- Introduces a fourth paragraph to Article 61 Sexies of the Tourism Law.
- Adds Article 36 Bis to the Housing Law specifically targeting digital platforms.
- Amends Article 22 of the Law for Comprehensive Reconstruction of Mexico City.
Goals of the Regulation
The primary goal of this regulation is to promote a balanced competition landscape while safeguarding traditional hotels and mitigating the adverse effects associated with short-term rental platforms.
Impact on the Housing Market
Deputy César Emilio Guijosa Hernández, representing the Morena party, emphasized that digital platforms have disrupted the accommodation market in Mexico City, leading to negative byproducts like gentrification and inflated housing costs. This new legislation aims to:
- Ensure affordable housing rentals, particularly in affected neighborhoods like Benito Juárez, Miguel Hidalgo, and Cuauhtémoc.
- Prevent the saturation of residential homes that are solely converted for rental purposes.
Opposing Perspectives on the Reform
While many lawmakers support the reforms, others, such as Deputy Diego Orlando Garrido López from PAN, have raised concerns regarding property rights. They argue:
- The regulation infringes on private property rights.
- The state should not dictate how individuals use their real estate assets.
Specific Provisions of the Approved Reform
Limitations on Accommodations
The new regulations impose specific limits on properties listed on digital platforms. Key stipulations include:
- A maximum occupancy cap of 50% per year for accommodations registered on digital platforms.
- Properties exceeding this limit will not have their registration renewed.
- Properties that cannot be renewed due to exceeding the occupancy limit may re-register after a cooling-off period of one year.
Prohibitions on Social Housing Listings
Additionally, properties that have a social purpose, including those intended for social housing or rebuilt after the devastating 2017 earthquake, are explicitly prohibited from being listed on digital rental platforms.
Benefits of the New Legislation
- Preservation of Affordable Housing: By limiting the use of residential homes for short-term rentals, more properties remain available for long-term rentals, helping to keep prices manageable.
- Support for Local Businesses: Traditional hotels and local accommodations can compete more effectively against platforms like Airbnb.
- Sustainable Urban Development: Reducing gentrification pressures can help to maintain the cultural and historical integrity of affected neighborhoods.
Practical Tips for Residents and Tourists
For Residents
If you’re a resident in Mexico City, consider the following tips:
- Monitor your neighborhood for any potential changes related to rental properties.
- Engage with your local government representatives to voice your opinions or concerns regarding housing legislation.
For Tourists
Tourists planning to visit Mexico City should keep this legislation in mind:
- Check for your accommodations to ensure they comply with local laws.
- Consider traditional hotels that contribute to the local economy while providing broader benefits to the community.
Case Studies: The Impact of Airbnb and Similar Platforms
To further illustrate the effects of digital platforms on housing markets, consider the following hypothetical case study:
| Neighborhood | Average Rent Before Airbnb | Average Rent After Airbnb | Impact on Local Families |
|---|---|---|---|
| Benito Juárez | $1,200 | $1,800 | Several families displaced |
| Cuauhtémoc | $1,000 | $1,500 | Strain on local affordable housing |
Looking Ahead: A Balanced Approach to Tourism and Housing
This legislative move reflects an increasing recognition of the intricate balance between fostering tourism and ensuring that local residents are not adversely affected. As the regulations unfold and their implementations take shape, stakeholders at all levels will need to adapt to this new legal landscape.
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