2024-08-23 05:02:02
MEXICO CITY (AP) — Mexico City’s Congress on Thursday approved the most ambitious rent control law since the 1940s, limiting rent increases to the previous year’s rate of inflation.
Essentially, rents in this metropolis of 9 million people were frozen in the 1940s and have remained that way for decades in older buildings. These controls were largely removed in the 1990s.
The new law also requires landlords to submit all rental agreements to the city. It’s unclear whether the new legislation will allow landlords to charge more for improvements to their properties.
Like many places around the world, Mexico City has been plagued by complaints that rents have skyrocketed due to short-term rentals and the arrival of digital nomads. But it appears to have only affected a handful of communities with tourist attractions near the center of the sprawling metropolis.
In recent years, the shortage of land and commercial housing has led to an extremely fierce real estate market, with house prices rising much faster than the inflation rate.
However, the new law does not address the city’s real problem: a shortage of housing units. Lawmakers estimate the city has about 2.7 million homes and apartments but needs about 800,000 more.
The city has long relied on private developers to build housing, and it’s unclear whether the new law will curb investment in residential construction.
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