The economics of gentrification

MXPE Weekly Essentials ft. nationalising trust funds, massive investment in troubled Sinaloa, and other highlights in Mexican politics, policy, and markets from the past week.

MXPE Weekly Essentials. Only the most important news in Mexican politics, policy, and markets from the past week.

Narratives about gentrification are naturally politicised—and not for the reasons people claim them to be.

Last week’s protests against “gringos” buying up housing in Mexico City weren’t the culmination of some urban process that led to an explosion of citizen anger. These marches—small in size but particularly violent in nature—were caught in the cross-currents of issues that inflame passions local and global alike.

The Palestinian flags and the destruction specifically of a Starbucks (seen as a “funder of Zionism”) is not accidental. The protesters see the “occupation” of Mexico City as synonymous to that of Gaza. Now, the interpretation that these people are actually third columnists organised by Iran, as some analysts have suggested, seems like a logical jump too far.

Annoyingly, these protests and the commentary around them have not been particularly useful at resolving or even identifying the causes of gentrification in Mexico City, as well as other metro areas like Querétaro, Monterrey, and Mérida. The Mexico Political Economist has been covering the topic for a long while now and it is disappointing to see that even expert commentators still cannot see the socio-economic wood for the political trees.

“The arrival of the Americans” is a useful bogeyman that obfuscates a deeper socio-economic process behind gentrification which has been decades in the making: