Latin America Gentrified: How A Rent Gap Can Change Everything
Gentrification is affecting many Latin American cities. As residents push back, there are worries that existing residents and cultures alike will be erased.
MEXICO CITY — In Latin American cities such as Medellín, Buenos Aires and Mexico City, real estate rental prices have increased considerably, with values even above inflation. The problem arises as a consequence of the construction, and remodeling of old buildings or houses, in neighborhoods located on the outskirts of large cities which have been left in the hands of real estate developers or businessmen. One of the main impacts of these decisions is an increase in social inequality.
Gentrification occurs when low-income or middle-class residents are displaced by a population with greater economic power. The wealthier people then settle in neighborhoods that are often considered "disreputable", according to Carla Escoffié, a lawyer specializing in human rights and housing issues.
“They arrive in these places and begin to impact the consumption dynamics, the price of rent, cost of living and other factors. They generate a revaluation, then prices start to rise until the original population begins to be displaced symbolically and economically,” says Escoffié.
New forms of inequality
The impact of gentrification is difficult to measure, but it is already visible in different parts of Latin America. Experts have identified neighborhoods such as Lastarria in Santiago de Chile (Chile), Bogotá's Chapinero, San Felipe, La Candelaria, and La Perseverencia (Colombia), Buenos Aires's Palermo (Argentina), Las Mercedes in Asunción (Paraguay), and neighborhoods in Mexico City, such as Roma, Mérida and around Parque Morelos in Guadalajara (Mexico).
In Colombia, Medellín is emerging as a new focus of gentrification, together with the municipalities of Envigado and Guatapé. Experts attribute the phenomenon to the high influx of foreign tourists, who accounted for 53.1% of total visitors in 2022 alone, according to Cotelco figures. (Cotelco is the association of hotels and tourism in Colombia.)
In the case of Guatapé, the construction of a social housing building in a traditional area was approved. These properties were designed for families with difficulties accessing housing, but with prices starting at 159 million pesos (around US$ 9 million), when typically prices in the area are never above 120 million pesos (less than US$ 7 million).
Mexico City is also at further risk of gentrification after the government signed an agreement with UNESCO and Airbnb last October to promote "digital nomad" tourism.
The criticism is not directed at the buyers and their origins, but rather at the way they ramp up prices
In the Mexican capital, 2023 began with an 16% average increase in housing prices. In some areas, the increase has already reached 64% in recent years.
"Something has to be done in terms of regulating the housing agreement. Despite the fact that during the pandemic demand dropped, tenants preferred to keep their homes empty instead of lowering prices," says Max Jaramillo, an expert on social inequalities in Mexico.
The problems with digital nomads
Gentrification also translates into inequalities. Melina Pekholtz, codirector of Territorio Paralelos in Paraguay, argues that for a city to be safe and livable, it is necessary for the upper, middle and lower classes to interact in the same space and converge in public where everyone should be equal.
“We need to understand that we cannot create ghettos, that we cannot create neighborhoods for the rich and neighborhoods for the poor because that generates vulnerability, social gaps and violence,” she said.
Since there is such a large housing deficit, people cannot become independent.
On the other hand, those who oppose these real estate projects have been criticized and branded as xenophobic as most of the occupants are foreigners. The criticism is not directed at the buyers and their origins, but rather at the way they ramp up prices for locals. "We cannot ignore the fact that the foreigners are arriving from the global north. From the United States, Canada and Europe. There is an imbalanced dynamic simply because of their purchasing power," says Escoffié.
Foreigners are arriving in Mexico City, Buenos Aires, or Medellín, for short periods of time or permanent stays, to live in areas from which the local population have been physically and symbolically displaced.
March against the adjustment to social assistance programs, Buenos Aires
The impact on the most vulnerable
The people most affected by this phenomenon are those in vulnerable situations.
"Since there is such a large housing deficit, especially of affordable housing, people cannot become independent. Women are often force to continue living with their extended families, or remain in violence situations if they have abusive partners," says Melina Pekholtz.
Many of the people displaced from these neighborhoods, where they had been living for years, have taken to the streets to protest the lack of state regulation and show their indignation. For example, in Mexico City, there have been protests against the agreement reached with Airbnb.
"People forget that for the person it is not just about leaving the physical house, it is about leaving a place tied to their family and neighborhood community," says Max Jaramillo.
Supporting people, not investments
Gentrification must be analyzed beyond the four walls of the building from which people are being displaced, because along with it, cultural and traditional practices are also being marginalized.
Jaramillo explains that the resistance to these projects is based on a defense of dignity and what is built in the territory: the social and community fabric.
Experts agree that state intervention is necessary for a sector that is not operating under the logic of the free market. It is also urgent to evaluate of the impacts of this type of project before their approval. Warning show that rents will continue to rise if dynamics that are happening in these areas are not controlled.
It is a call for respect to the dynamics and customs of citizens and their spaces. Instead of allowing investment that displaces people and their culture, we should invest in support and guarantees for those who already live in these places.
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