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OECD Urban Policy Reviews: Mexico 2015

Transforming Urban Policy and Housing Finance

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In parallel to a sweeping structural reform agenda, Mexico announced in 2013 a new approach to housing and urban policy. Calling for a more explicit qualitative focus on housing and the urban environment, the policy shift is a welcome development. Mexico urbanised more rapidly than most OECD countries in the past half-century, in part as a result of the expansion of housing finance led by INFONAVIT and facilitated by policies aiming to expand access to formal housing. Yet the quantitative push for formal housing came with quantitative costs: inefficient development patterns resulting in a hollowing out of city centres and the third-highest rate of urban sprawl in the OECD; increasing motorisation rates; a significant share of vacant housing, with one-seventh of the housing stock uninhabited in 2010; housing developments with inadequate access to public transport and basic urban services; and social segregation. How can the Mexican authorities “get cities right” and develop more competitive, sustainable and inclusive cities? How can they improve the capacity of the relevant institutions and foster greater collaboration among them? How can INFONAVIT ensure that its lending activities generate more sustainable urban outcomes as it also fulfils its pension mandate and help Mexicans save more for retirement?

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Assessment and recommendations

Since the signing of the “Pact for Mexico” (Pacto por México) in December 2012, Mexico has undertaken an ambitious, cross-cutting structural reform agenda – encompassing labour, fiscal, financial, energy, education and telecommunications reforms – that is aimed at boosting the country’s competitiveness and economic growth. Housing and urban policy is considered a priority within this reform agenda. The authorities seek to reduce the housing deficit that affects roughly 31% of Mexican households and to correct the inefficient development patterns of recent decades. This new approach to housing and urban policy differs from those of the recent past by shifting from quantitative objectives for housing to a more qualitative focus on housing and the urban environment. These objectives are made explicit in the National Housing Programme for 2014-18, which aims to: i) provide decent housing for Mexicans; ii) responsibly address the housing gap; iii) transition toward a smarter, more sustainable urban development model; and iv) improve inter-institutional co-ordination. The National Urban Development Programme (Programa Nacional de Desarrollo Urbano 2014-2018, PNDU), released in parallel, includes objectives to control urban sprawl, promote well-being and sustainable mobility, and avoid the development of irregular and informal settlements, among others.

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