Land deals in peri-urban Mexico City: A rush for land among private sector developers, poor quality social housing, and major urban sprawl

October 2018, by Wieke Smit

Wieke Smit is a graduate of the International Development Studies master degree at Utrecht University. As part of this degree she examined a new venue within land governance debates. Her field-research took place in the peri-urban area of Mexico City Metropolitan area where she evaluated the inclusiveness of land deals between rural landowners and private sector developers of social housing.


Similar to other large metropolitan cities in the Global South, Mexico City Metropolitan Area (MCMA) has a population characterized by a high percentage of poor people and faces the problem of providing adequate and affordable housing to such lower-income groups, while at the same time containing excessive urban sprawl. From the beginning of the ‘90s, the Mexican government started to place more emphasis on its social housing policy to improve the housing situation of the urban poor. The outcome of this policy is mildly put ‘unfortunate’: a rush for land among private sector developers around MCMA, poor quality social housing, and major urban sprawl.


Mexican social housing policy

The Mexican social housing policy was meant to provide housing to lower-income groups and support the private sector at the same time. All formal sector workers had to save a percentage of their salary each month with institutions such as INFONAVIT and FOVISSSTE. After years of saving, these workers were eligible for a concessional loan. Instead of allowing workers to freely choose their preferred type of housing in the housing market, the built-up credits could only be used to buy social housing developed by private sector developers.


Social housing and the rush for rural land

A crucial element supporting this social housing policy was a regulatory change concerning ejidal land. Ejidal land is a land tenure form unique to Mexico. Ejidal land is rural land and communally held by the ejido. The ejidal community and each of its members merely had the right to use the land and benefit of its harvests, but they did not fully own their land and therefore, were not allowed to sell it. In order to make more land available for urban expansion and the development of social housing, regulations on the ejidal land were altered. After the regulatory change, if the complete ejidal community agreed, they could dispose themselves of the ejidal status and change ejidal land to private property. As private property, the rural ejidal land could now be sold.

In light of this social housing policy, private sector developers such as Casas Geo, Urbi, Sadasi and Homex speculatively started to create territorial reserves in the outer-areas of MCMA. They focused on these areas, because the rural lands here were relatively cheap. Especially, the municipalities Tecámac and Zumpango were recognized as very strategic locations in anticipation of governmental investments in urban development in this direction. As a result, the developers engaged in a rush for land in Tecámac and Zumpango between 2000 and 2010.


Private property land in Zumpango, Mexico City Metropolitan Area (Photo: Wieke Smit)


Lack of inclusivity

Even though a wealth of land deals took place in Tecámac and Zumpango in a time-span of 10 years, which completely transformed these municipalities from rural to peri-urban, before this master thesis research took place hardly any studies focused on the process of these land deals and the outcomes for the actors involved. An inclusive land deal would have benefitted all actors involved more or less equally, but my research showed that this was not the case in Tecámac and Zumpango. It is questionable whether rural landowners benefitted from selling their land, access to affordable land for informal settlers is reduced and since the resulting social housing is of such bad quality the owners of social housing ended up in an undesirable situation.


Outcomes for rural landowners and informal settlers

The majority of rural lands in Tecámac and Zumpango were held by an ejido, however, some parts were owned as private property by one landowner. The predominant reason (former) landowners mentioned that made them sell their land was the relatively good price developers offered. As said, rural land is relatively cheap and developers offered at least 6 times the rural value of land. So initially, this seemed like a very generous offer. However, as the urban fringe moved to Tecámac and Zumpango between 2000 to now, the price of land in these municipalities appreciated by 300 to 400 percent.

The land deals had different outcomes for rural landowners. The private property rural landowners who decided to sell to a developer usually owned large estates and were well aware of the upcoming developments and sold their complete estates for a favorable price. After selling their estate, these people reinvested the compensation received in larger estates in more fertile and affordable areas of the country.

Most ejidal landowners sold only a part of their land and remained in Tecámac and Zumpango. Their lives have changed drastically as a result of the approaching urban fringe. The ejido is a group and can have 70 to 600 members. Convincing such a large number of people to sell their land is a difficult task; therefore, the developers secretly hired one of the members to help them. Some people had distinctly more knowledge of future changes in Tecámac and Zumpango and were a lot more cunning in using this information during negotiations. Also after a land deal, some ejidal landowners used their experience and started speculating on nearby by land in other ejidos. However, many of the ejido members spent the compensation received on purposes such as alcohol, cars, a family-holiday, medical bills, a new house or improvements to the house, and after spending their money were in the same situation as before – but now without land.

The land deals with developers reduced access to land for informal settlers. Developers and informal settlers aim for similar land in terms of amenities and price. However, many rural landowners prefer to sell to private sector developers, because they can offer a higher compensation and are perceived to be more reliable than informal settlers. After land prices appreciated in Tecamac and Zumpango, it has become very difficult to acquire land.


Land for sale in Zumpango (Photo: Wieke Smit)


Future plots with social housing for sale in Zumpango, Mexico City Metropolitan Area (Photo: Wieke Smit)


An alternative social housing policy?

Private sector developers have profited greatly from the Mexican social housing policy, but the intended societal purposes have not been achieved. There is plenty of literature discussing a variety of issues concerning the developed social housing neighborhoods such as bad quality housing, high crime rates, high degree of abandoned houses and bad infrastructural connections to Mexico City. This is why I call for an alternative set-up of the social housing policy in which the private sector is still involved, but their power is reduced.

One of the initiatives that should be explored is the collaboration between associations organizing informal settlements and private sector housing developers. In these collaborations the associations are responsible for buying land. After obtaining land, private sector developers develop housing according to the wishes of lower-income groups. This way, land deals are between rural landowners and informal settlement associations, which are two more equal actors. At the same time, private sector developers remain involved in social housing, but their role is reduced and the lower-income groups buying their housing can have greater influence over the affordable housing options offered to them.


Invaded social housing in Sante Fe, Zumpango (Photo: Wieke Smit)


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