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Not long ago we published a post about the potential negative impact that the major influx of digital nomads has had on Lisbon, Portugal, and how locals are starting to pull up the welcome mat. Now it seems that Mexico City, a very popular digital nomad destination, especially with Americans, is doing the same.
Housing Prices Skyrocketing
One graffiti artist sprayed a huge “Gringo Go Home” sign in Roma, one of Mexico City’s most popular areas for tourists and digital nomads. Many others have taken to social media to share similar attitudes.
The reason for the current shift in public attitudes is fast-rising housing prices. However, the arrival of more foreigners is not the main reason why housing prices have shot up by 247% in Mexico over the last 15 years. This is supported by the fact that housing prices in Mexico City have been increasing at a lower rate since the pandemic, while the number of digital nomads is on the rise.
Economists suggest that the real reason behind the housing crisis is a lack of housing, exacerbated by government policies that severely limited home construction in the early 2000s. Mexico needs to be building about 50,000 homes a year to meet demand, but they are only reaching a fraction of that number. And affordable housing is rare, making up only about 12% of new builds in Mexico City. But this builder choice is not down to digital nomads, but the high cost of building meaning that builders need high returns.
This combines with other issues such as high poor tax incentives and lack of city planning to make Mexico City increasingly unliveable. Read more here. On the plus side, the less liveable the city, the fewer digital nomads.
How Many Digital Nomads are in Mexico?
Exactly how many digital nomads are in Mexico, and are there enough to be a major disruptor? Well, Mexico has a population of around 130 million, and Mexico City a population of around 9 million. It is estimated that in 2020, there were around 6.3 digital nomads in Mexico. That is about 0.04% of the population, which is a more significant number than it sounds.
What does this mean? According to the government of Mexico City, in 2021 alone, digital nomads left an economic footprint of 3.9 billion pesos (S$523.4 million), which was 15% of the city’s total tourism revenue.
While digital nomads may not be the main driver pushing local Mexicans put of the housing market, locals lucky enough to own homes can make three times the income from rental, even with high turnover rates and periods of vacancy.
Another result of this is gentrification, but this is mostly limited to three or four of the 300 neighborhoods in Mexico City, such as Roma and Condesa. While this means that a limited number of locals are affected, it can see people pushed out of communities that their families have lived in for generations, and that is a big problem. The local government does recognize this issue and is trying to encourage visitors to choose some of the less popular areas.
So, it seems that while digital nomads are affecting in economy of Mexico City in both positive and negative ways, some of their impact could be controlled through better legislation. This is something that the government has been slow to pursue because they make big tax revenues through short-term rentals, charging directly via the Airbnb website, minimizing tax evasion for other types of rentals. However, they are now actively looking for solutions and consulting with other cities around the world who have struggled with the same issue.
Hopefully, this will lead to long-term solutions, but in the short term, there are groups of locals who will continue to struggle and will continue to hold digital nomads at least partially responsible.
Should Digital Nomads Travel to Mexico?
With all this in mind, should digital nomads be traveling to Mexico right now? Mexico is a wonderful destination for digital nomads for many reasons, which we have previously discussed here, but what about the ethics of the choice?
Well, as a digital nomad, you can bring a boost to the local economy, if you do it the right way. Consider the following.
- Try not to stay in the most popular digital nomad neighborhoods that are already overrun and look for other options. Skip Roma and Condesa. Check out San Angel and San Rafael.
- Look for locally owned accommodation, so that you are supporting local families rather than businesses that have bought up property in the area and are contributing to higher housing prices.
- Learn the local language! One complaint that many citizens of Mexico City have is that they now hear English everywhere. Show respect for the local community and culture by speaking Spanish whenever possible.
- Buy local. And this doesn’t mean visiting the Vegan restaurant in the center of the city that may not be locally owned. Frequent small local stores and food vendors so that your tourism dollar contribution goes directly into the hands of the people in your local community.
- Remember that Mexico is not a third world country, but a quickly growing economy with an emerging middle class and a vibrant culture. While making positive decisions to support locals, keep your privilege in check.
A few simple decisions can mean that you can enjoy traveling in Mexico as a digital nomad without feeling like you ae contributing to a bigger problem.
How to Travel to Mexico
Mexico does not have a digital nomad visa, but it does have options for people who want to stay for several months. You can travel in Mexico as a tourist for up to six months or apply for a temporary residence permit for sic months, which can be renewed for up to four years, at which point you can apply for permanent residence.
To qualify for the visa, you need to be able to show economic solvency, which is a minimum income of around US$58,000 per year, or US$ 3,450 per month.
