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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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Executive summary

Mexico has undertaken ambitious housing and urban policy reforms in parallel to its adoption of a series of structural reforms emerging from the Pacto por Mexico. Responding to the country’s rapid urbanisation in the second half of the 20th century, previous housing policies were successful in reducing the country’s quantitative housing deficit and making home ownership increasingly accessible to all income levels. The rapid expansion of housing finance, led by INFONAVIT – the country’s largest provident housing fund – and facilitated by public policies aiming to expand access to housing, made formal housing a reality for an ever larger share of the population. By early 2013, INFONAVIT had assisted more than 7 million workers acquire decent housing, and today roughly one in four homes in Mexico is financed by INFONAVIT.

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