Mexico City: Real estate rents will be indexed to inflation

The Mexico City government's initiative to cap real estate rents in Mexico City at inflation is moving forward.

Last year, the "petard" was launched, which was to be applied throughout Mexico City.

Now, it is being announced as a measure that will be limited.

At least initially, it will be in effect in areas of high real estate pressure or so-called "Real Estate Stress Zones."

In neighborhoods such as Roma, Condesa, and Cuauhtémoc, the goal is to curb involuntary displacement and strengthen the community fabric.

On July 16, 2025, Mexico City Mayor Clara Brugada presented Proclamation 1, "For a Livable and Affordable City with Local Identity and Roots."

It is a plan with 14 measures to combat gentrification and regulate rents in Mexico City.

This is made public 12 days after the public demonstration against gentrification in Mexico City, which took place on July 4, 2025, in the Roma and Condesa neighborhoods.

This protest was allegedly organized by residents and activists seeking to highlight the impact of rising rents and real estate speculation in these areas, which has led to the displacement of indigenous communities.

At the time, the acts of vandalism and violence attracted attention, which were not consistent with the profile of the area's residents, who are genuinely dissatisfied.

The event was widely covered in traditional media and social networks.

Just a few days after that seemingly "explosive" social event, this plan was made public, with income regulation as its central focus.

It is presented as an attractive and beneficial plan that will benefit those who have the least.

It is proposed as a public policy that seeks to make the human right to housing effective.

However, indexing rents to inflation is worrying because of its negative impact on private property and the free market.

The Mexico City government, headed by Clara Brugada, intends to regulate rents and adjust them to inflation in Mexico City.

He proposes the creation of a rental price index and a "new fair rent law."

It also includes the regulation of platforms such as Airbnb and the promotion of public housing.

The official discourse attempts to distance itself from the history of the failure of populist politics.

"Frozen rents will not be applied, as in the past, when they caused urban decay.

But excessive increases will not be allowed either; inflation will remain the limit," the head of the capital's executive branch stated.

Section 1, with its central idea of regulating rents, is not new.

It was presented in August 2024 by the then Head of Government of Mexico City, Martí Batres, and announced during the conference of the president, at that time, Andrés Manuel López Obrador.

On that occasion, the capital's government submitted a bill to regulate housing rentals in Mexico City.

It stipulated that rents for apartments or houses could not exceed the annual inflation rate.

The arguments were and remain practically the same:

“Stop the excessive increase in rent costs and protect the poorest families” and “combat gentrification in Mexico City.”

They are part of the same plan.

They propose: a Reasonable Rental Price Index: to stabilize rents in areas of high real estate pressure.

Regulation of Temporary Accommodation Platforms, with an objective methodology to control short-stay rentals, especially on platforms like Airbnb, which have more than 26,000 homes in central areas.

A Fair, Reasonable, and Affordable Rents Act, through a law to regulate and stabilize rental prices, balancing the rights of tenants and landlords.

Tenant Rights Ombudsman: A public body will be created to offer legal defense, mediation, and sanctions against illegal evictions and abusive practices in the rental market.

Land and Housing Observatory: A body will be established to systematize and analyze data on prices, contracts, and real estate market trends, providing legal support for regulations.

In short, the capital's government will control the rentier market in the capital of the Republic.

What the capital's plan doesn't address is the much more pernicious gentrification that Mexico City is experiencing: the gentrification that in just a few years has turned thousands of square meters of the capital into informal warehouses and distribution centers for imported goods.

In time.