Mexico Plans To Curb Airbnb Registrations Amid Housing Crisis

Key Takeaways

• Mexico City is contemplating regulations for short-term accommodations due to concerns over rising costs and housing availability.
• Mayor Claudia Sheinbaum emphasizes regulating short-term rentals to balance tourism benefits and affordable housing for residents.
• Potential regulations may require platforms to register, share property details, and handle tax collection for property owners.

Mexico City, Mexico–The mayor of Mexico has announced that the government is considering regulations on registrations of short-term accommodations in the city after public unrest due to rising costs, according to a report published on Bloomberg.  

Impact and Proposed Measures

Authorities have been led to believe that one of the primary factors driving up the rents in Mexico City and its neighbourhood is the sudden rise in short-term accommodations, especially Airbnbs.

Per the report, Mexico City’s mayor, Claudia Sheinbaum, has emphasized the importance of striking a balance between the benefits of short-term rentals for tourism and the need to ensure affordable housing for residents. 

“We’re not against the sharing economy,” she said in the report, “but we need to regulate it so it doesn’t become a problem.”

This decision marks a stark reversal from the Mexican government’s recent partnership with Airbnb in the latter’s ‘Live and Work Anywhere’ initiative.

Mexico has become the second country (joining Portugal) to restrict the registration of short-term rentals since the mass influx of tourists to the city has been pricing out locals and driving them towards rural areas.

Reactions and Enforcement

The new regulations may require all short-term rental platforms to register with the government and provide information on the properties listed on their platform, including the owner’s name, address, and tax identification number. Platforms will also be required to collect and remit taxes on behalf of the property owners.

Mexico City, among the leading destinations for remote workers worldwide, has seen the median monthly rent prices increase from about $800 to $1800. Neighbourhoods such as Condesa and Polanco have seen a steeper rise, soaring beyond $2,000 monthly.

The regulations aim to tackle concerns that short-term rentals are driving up housing prices and consequently reducing the availability of long-term rentals in the city. 

By requiring greater transparency and accountability from rental platforms, the government hopes to better understand short-term rentals’ impact on the housing market.

According to Inside Airbnb data, there are over 25,000 active listings in Mexico City, with most properties offered as entire homes or apartments.

The regulations have been met with mixed reactions, with some property owners and rental platforms expressing concerns over the impact on their businesses. 

However, others have welcomed the move, citing the need for greater regulation to protect the housing market and prevent the displacement of residents.

The new regulations will come into effect soon and mandate rental platforms to comply with the new requirements. Failure to comply could result in fines or even the suspension of operations in Mexico City.

What We Think

Mexico City’s move to consider regulations on short-term accommodations reflects a growing global concern about the impact of platforms like Airbnb on housing markets. While seeking a balance between tourism and housing needs is crucial, the proposed regulations aim to ensure greater transparency and accountability.

By requiring platforms to register and share property information, the government hopes to assess and address the impact on housing availability. This decision, though met with mixed reactions, underscores the necessity of balancing economic opportunities with local housing concerns to sustainably manage city growth and protect residents’ access to affordable housing.