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OECD Urban Policy Reviews: Mexico 2015

Transforming Urban Policy and Housing Finance

image of OECD Urban Policy Reviews: Mexico 2015

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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Cities, housing and pensions in Mexico: An opportunity to bolster growth and well-being

This chapter analyses the main trends and challenges for urban areas in Mexico, with particular emphasis on housing, and their implications on the country’s economic, social and environmental outcomes (e.g. urban sprawl, congestion and social segregation). Specifically, this chapter addresses: i) the diverse factors contributing to Mexico’s economic under-performance relative to other OECD countries; ii) the country’s rapid urbanisation rate, which has increased opportunities for city dwellers but meanwhile has not translated into expected productivity gains; and iii) the range of policy challenges facing cities.

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