From the Top Down: The Governance of Urban Development in ... · (UGBs) across almost 400 Mexican towns and cities with more than 15,000 inhabitants. It is important to emphasize

IMFGperspectives

No. 29 / 2020

From the Top Down: The Governance of Urban Development in Mexico Alejandra Reyes

About IMFG

The Institute on Municipal Finance and Governance (IMFG) is an academic research hub and non-partisan think tank based in the Munk School of Global Affairs and Public Policy at the University of Toronto.

IMFG focuses on the fiscal health and governance challenges facing large cities and city-regions. Its objective is to spark and inform public debate, and to engage the academic and policy communities around important issues of municipal finance and governance. The Institute conducts original research on issues facing cities in Canada and around the world; promotes high-level discussion among Canada’s government, academic, corporate, and community leaders through conferences and roundtables; and supports graduate and post-graduate students to build Canada’s cadre of municipal finance and governance experts. It is the only institute in Canada that focuses solely on municipal finance issues in large cities and city-regions.

IMFG is funded by the City of Toronto, the Regional Municipality of York, The Regional Municipality of Halton, Avana Capital Corporation, and Maytree.

Authors

Alejandra Reyes is Assistant Professor of Urban Planning and Public Policy at University of California Irvine’s School of Social Ecology. She was the 2018–19 postdoctoral fellow at the Institute on Municipal Finance and Governance. She received her BA in Architecture at the University of California Berkeley and an MS and PhD in Community and Regional Planning at the University of Texas at Austin. Her academic interests lie at the intersection of housing and urban development, policy and governance, and socioeconomic disparities.

Acknowledgements

The author would like to thank Enid Slack, Tomas Hachard, and Philippa Campsie for their insightful comments and edits on previous drafts of this paper.

Institute on Municipal Finance and Governance (IMFG)Munk School of Global Affairs and Public Policy University of Toronto1 Devonshire PlaceToronto, Ontario, Canada M5S 3K7email: [email protected]://www.munkschool.utoronto.ca/imfg

Series editors: Philippa Campsie and Tomas Hachard

© Copyright held by author

ISBN 978-0-7727-2500-4 ISSN 1927-1921

Executive Summary

Despite decentralization efforts in Mexico during the late 20th century, federal and state-level policy has continued to take precedence over local governance. Local governments in Mexico have limited financial and institutional capacities and are seldom able to guide urban development and construction processes. The result of this top-down approach has sometimes been sprawling and unsustainable development patterns, particularly during the 2000s, when federal and several state governments backed large housing developments at the edges of urban centres. These developments placed a burden on local governments to provide adequate levels of infrastructure and services.

More recently, however, the federal administration advocated densification strategies, including the implementation of Urban Growth Boundaries (UGBs) around 394 Mexican cities or towns with more than 15,000 inhabitants – including 74 metropolitan areas. This paper describes the experience of some of Mexico’s largest cities in implementing nationally mandated urban growth policies, in particular the top-down nature of these new policies and the lack of local consultation in their implementation. Furthermore, given initial opposition from private developers, the boundaries have shifted in subsequent years, thus continuing to privilege development interests above the production of affordable housing and more sustainable development patterns.

IMFG Perspectives

– 1 –

While these figures point to the increasing importance of cities, they mask the fact that “no standardized international criteria exist for determining the boundaries of a city and often multiple different boundary definitions are available for any given city.”1 This confusion is compounded by the sprawling development patterns many cities have experienced over the last few decades, particularly as the populations of metropolitan areas grow faster than those of city centres.

Mexico typifies this pattern. Its population has increasingly concentrated in large metropolitan regions, which have not only increased in number, but also in size, in that they are increasingly composed of a larger number of municipalities. This trend has been particularly notable since the 1990s. The number of metropolitan regions in Mexico has increased from 37 in 1990 to 55 in 2000. The most significant increase occurred in the number of metropolitan municipalities within metropolitan regions in the country, which grew from 155 in 1990 to 345 in 2005.

The historical origins of this growth are varied. Although in the 1960s and 1970s informal housing developments began to form in the peripheries of the largest Mexican cities, a series of structural reforms in the 1980s and 1990s accelerated housing and urban development in peri-urban regions surrounding most cities. These reforms expanded

Photo by Sarah Karlson via Flickr https://bit.ly/3faK8Gd

From the Top Down: The Governance of Urban Development in MexicoIntroduction

According to 2016 United Nations projections, by 2030, urban areas will house 60 percent of the global population, with about a third of that population living in cities with at least half a million inhabitants. Similarly, by that time about 662 cities worldwide will have at least a million residents.

From the Top Down: The Governance of Urban Development in Mexico

– 2 –

mortgage access, promoted privatization and development of rural communal lands, and were intended to grant municipal governments greater administrative capacities to, for instance, manage urban growth and development.

In fact, however, municipal governments lacked the financial resources to build the capacity to guide and regulate the rampant development that much of their territories subsequently experienced, particularly during the 2000s. In parallel, state-level development plans often promoted and expedited the construction of large housing projects. This new set of reforms propelled housing investment, particularly for lower-to-middle income housing construction. Yet speedy and mass-production processes also led to the poor execution of housing and infrastructure projects and to sprawling and unsustainable development patterns.2

In response to sprawling development patterns and following the global trend of promoting compact and connected urban development, in 2013 the federal government established three Urban Growth Boundaries (UGBs) across almost 400 Mexican towns and cities with more than 15,000 inhabitants. It is important to emphasize that UGBs were not implemented by local governments, but imposed on cities by the federal government. Furthermore, in 2016, as part of the UN Habitat III commitments, the National Law of Human Settlements, Land Use Planning and Urban Development enabled the creation of an intermediate (that is, metropolitan) model of political and administrative centralization to support local governments in their urban development responsibilities when their capacities are limited.3

This paper analyzes the influence of local (public and private) stakeholders on the drawing and implementation of the Urban Growth Boundaries, and their experience with this federally mandated urban and metropolitan development policy in terms of how suitable and effective they have perceived it to be. The paper also sheds some light on the local implications of this densification policy.

This study focuses on the 14 largest Mexican metropolitan regions, each of which has 1 to 5 million inhabitants. It does not include Mexico City, because it is a case of extreme metropolitan fragmentation that requires its own separate analysis. The city-regions under study are concentrated in north and central Mexico, except for Merida to the southeast in the Yucatan peninsula. Three are border towns: Tijuana, Juárez, and Mexicali; two are northern cities: Monterrey and Torreón-Laguna; the rest are in central Mexico: Guadalajara, Puebla, Toluca, León, Querétaro, San Luis Potosí, Aguascalientes, and Cuernavaca. Only one of these 14 metropolitan areas crosses state boundaries: Torreón-Laguna, which is in the states of Coahuila and Durango (Figure 1).

Table 1 provides information on the cities under study. What it does not show is that the cities that have recently grown most rapidly are Monterrey and to a lesser degree, Querétaro and Mérida. Most other cities have experienced a relatively linear population growth trajectory since the 1990s, although a few have experienced a deceleration in their growth since the 2000s, particularly Juárez and, to a lesser degree, Tijuana.

The variation in metropolitan fragmentation is also notable. Juárez and Mexicali have large populations but are composed of only one municipality. At the other extreme is Puebla, with 39 constituent municipalities. The cities have enlarged their territories, however, at different times. While Puebla has the largest number of municipalities, it did not add to them in the last decade. The same may be said of Tijuana, Juárez, León, San Luis Potosí, Querétaro, Aguascalientes, Mexicali, and Cuernavaca.

The opposite is true of Monterrey, which grew from 13 to 18 municipalities and Mérida, which grew from 5 to 11 in the 2010s. In the middle are Guadalajara, which grew from 8 to 10 and Toluca and Torreón, which only added one municipality each to their territories. As Table 1 shows, densities also range from 56 inhabitants per hectare in Mérida to 126 in León. In the past decade, however, densities have decreased in Guadalajara, Mérida, León, and Mexicali.

This paper also presents a discussion from a survey of local and state planning officials and housing construction chambers. These surveys assess the effectiveness of the UGBs in halting sprawl, promoting sustainable development and affordable housing, guiding urban planning, and facilitating institutional coordination, and suggest who has had the most influence in the drawing and implementation of these boundaries. They were conducted via email or by phone and represent the official or institutional vision of the public offices and the state chambers surveyed. Twenty-two interviewees participated from 12 of the 14 metros. Seven represent local planning offices, nine represent regional or state-level planning or urban development ministries, and six represent state/regional construction chambers.

The Development of Urban Growth Boundaries in Mexico

Figures 2 and 3 show the Urban Growth Boundaries for Guadalajara and Monterrey, the second and third largest cities in the country. (Note that although they are called “boundaries,” they actually function as concentric zones.) Initially, Urban Growth Boundaries were calculated through a mathematical formula to promote densification and housing development within already built-up urban areas.

IMFG Perspectives

– 3 –

Figure 1. Study’s 14 metropolitan regions

Table 1. Population, number of municipalities, and densities for metro areas under study

Metro and State Population Municipalities Density (pop/ha)

1 Guadalajara, Jalisco 4,887,400 10 123

2 Monterrey, Nuevo León 4,689,600 18 108

3 Puebla, Puebla 2,942,000 39 76

4 Toluca, Estado de México 2,202,900 16 64

5 Tijuana, Baja California 1,840,700 3 85

6 León, Guanajuato 1,768,200 2 126

7 Juárez, Chihuahua 1,498,500 1 68

8 Torreón-Laguna, Coahuila-Durango 1,342,200 5 76

9 Querétaro, Querétaro 1,323,600 5 96

10 San Luis Potosí, San Luis Potosí 1,159,800 3 106

11 Mexicali, Baja California 1,147,000 1 59

12 Mérida, Yucatán 1,143,000 11 56

13 Aguascalientes, Aguascalientes 1,044,000 3 105

14 Cuernavaca, Morelos 1,006,000 8 71


– 4 –

The first or core (red) boundary (UGB1) concentrates

employment, meaning that it has a higher proportion of employees relative to the resident population per census tract (or AGEBs – Basic Geostatistical Areas). Each AGEB also needs to have at least 250 employees. As the maps of Guadalajara and Monterrey show, tracts in both peripheral and industrial areas can meet these criteria. UGB

1 census

tracts must also have at least one elementary school within a radius of 1 kilometre, a secondary school less than two kilometres away, and a health clinic within a 1.5-kilometre radius.

The second (green) ring (UGB2) is composed of census

tracts with densities of at least 20 houses per hectare, water, and drainage access for at least 75 percent of the already built housing, and the same criteria as UGB

1s regarding

schools and health centres. Only 20 percent of a lot needs to fall within UGB

1 or UGB

2 to be considered within its

boundaries.

The third (blue) area (UGB3) is meant to act as a buffer

to contain sprawl. Its width depends on the size of the city or town. Cities with more than a million inhabitants, for instance, have UGB

3s with a 900-meter radius, and only 10

percent of a lot needs to fall within the UGB3 to be included

within such a boundary.4

It is important to note that development is not prohibited outside these boundaries. Rather, it is encouraged within them through low-income housing subsidies and housing mortgages. Subsidies are granted through a point system to housing units that accumulate at least 350 points.

Social housing located within UGB1 gets 400 points and

within UGB2 gets 350 points, thus automatically qualifying

for a subsidy. Housing within UGB3 gets only 250 points,

but the use of eco-technologies grants 100 extra points and multi-family housing units get 230 points. Thus, much of the low-income housing within any of the zones defined by the boundaries is likely to qualify for subsidies.

Figure 2. Guadalajara, Jalisco, and its UGBs

IMFG Perspectives

– 5 –

On average, subsidies are of about $60,000 pesos per unit (about CAN $3,400), which accounts for about 20 percent of a low-income house selling price.5 Similarly, Mexico’s National Mortgage Institute (INFONAVIT) is the largest in the country and one of the largest in the world, thus fuelling significant housing development.

In 2013, given the initial opposition to UGBs by private developers, Mexico’s Urban Development Ministry also developed a National Registry of Territorial Reserves (known as RENARET for its acronym in Spanish) to determine the quantity, quality, and location of land owned by real estate companies. This database was built through the voluntary and confidential participation of these companies.

Most of the lands were subsequently incorporated within UGBs, effectively redrawing the boundaries and increasing the amount of developable land, putting into question the effectiveness of the UGBs in containing sprawl. A parallel concern is that the land and housing subsidies granted within the UGBs to encourage infill development have been absorbed by landowners and housing developers looking to benefit from land price increases and speculation processes.

Figure 3. Monterrey, Nuevo León, and its UGBs

Box 1. Urban Growth Boundaries in other jurisdictions

Although Urban Growth Boundaries have never been implemented at the national level, a few states in the U.S. have experimented with growth management tools to mitigate the negative socioeconomic and environmental impacts of suburbanization since the 1970s. City governments have a longer history of such policies. For example, London instituted a metropolitan greenbelt in the 1930s.6

In general, boundaries have been established to preserve environmentally sensitive land and promote denser development at urban cores. Yet, many oppose boundaries for their potential for increasing land and housing prices due to the restriction in the supply of developable land. 7 In King County, Washington, for instance, land price increases were significant, although housing prices were kept stable through policies that incentivized the increase in supply, such as minimum density requirements, zoning for multifamily housing, and the enabling of accessory dwelling unit construction.8


– 6 –

Critiques and Challenges of Urban Growth Boundaries in Mexico

One of the first critiques of UGBs in Mexico was the methodology used to calculate and draw them, particularly since they often include areas that are still remote and disconnected from the rest of the built-up city.10 There is no real consensus either in favour or against their definition and methodology and purported objectives. Tania Guerrero argues that the implementation of Urban Growth Boundaries throughout the country represents a radical shift in terms of the level of government involvement in regulating and guiding housing and urban development.11 Similarly, Paavo Monkkonen and

Paloma Giottonini describe them as one of the main urban management strategies in the last two decades.12 A more critical perspective, however, is offered by Anavel Monterrubio. While investigating Mexico City’s current experience with UGBs, she underscores the private investment and real estate interests that UGBs serve by providing a certain degree of development certainty and higher profit margins through the procurement of financial incentives to maintain housing production levels.13

A related question is whether UGBs are effectively halting sprawl and improving housing access and urban development conditions. Some large-scale developers in the country opposed the implementation of UGBs and lobbied for an agreement with the federal administration to include most of their private lands – 67,000 hectares in 2013 – within such boundaries. Thus, the UGBs formula had to be “softened” to include the majority of these properties, since the initial formula excluded nearly 70 percent of such private lands. Individual cases brought by the development community to the National Housing Commission were also evaluated until 2017. Moreover, in Mexico City’s metropolitan region, Guerrero notes that there is no significant difference between the subsidies granted to properties within the different boundaries, which is incentivizing most development to occur in the third boundary, where land is cheapest but development is less consolidated.14

One of the most significant challenges to implementing densification strategies in most places is that of land availability and costs at urban cores and other accessible locations. In Mexico, housing construction is notably limited within UGB

1s and there has been a noticeable decline in

housing construction within UGB2s in the last decade. Since

most of the developable and affordable land is in peripheral areas that correspond to the third urban growth boundary, this is where most new housing has been built (see Figure 4).

In 2018, 50.2 percent of all housing built in the country was built within UGB

3s, and an additional 12.6 percent

beyond the boundaries, while only 13.6 percent was built in UGB

1s and

23.6 percent in UGB2s.

Figure 5 highlights the limited amount of available land, nationally, within each of the three defined areas.

Given these challenges, the remainder of this paper further examines the effectiveness of the Urban Growth Boundaries as densification strategies and the influence of local governments and other stakeholders in their development.

Box 2. Mexico City’s densification strategies in the 2000s

An interesting national precedent to urban growth management policies occurred in the country’s capital while most Mexican cities were experiencing unprecedented housing development and territo-rial expansion. In the 2000s, the government of the then Federal District (now Mexico City) undertook a series of densification strategies and allocated a record amount of resources to low-income housing con-struction and rehabilitation at the urban core.

One of the best features of such strategies was the involvement of residents and neighbourhood orga-nizations in housing design and construction pro-cesses. The local administration (2000–2006) also implemented an Urban Growth Boundary – Bando 2 – to incentivize housing development at the urban core and limit it in peripheral and conservation land. However, there was no coordination with other state and local governments, which contributed to the proliferation of housing developments beyond the political boundaries of the Federal District in adjacent states and their municipalities. The absence of speculation controls also allowed for sharp land price increases in the urban core, effectively limiting subsequent affordable housing production. Bando 2 was thus abolished during the subsequent local administration.9

Since most of the developable and affordable

land is in peripheral areas that correspond to

the third urban growth boundary, this is where

most new housing has been built.

IMFG Perspectives

– 7 –

Table 2: A Spectrum of voluntary governance arrangements

More formal

More formal

Statement of shared principles A brief expression of shared principles or goals to guide collaboration.

MOUsA more detailed, generally non-binding document describing a relationship of goodwill between the parties for a specific project or broader initiative.

ContractsA binding legal agreement between parties (for joint ventures or shared services, for example), often project-specific, narrowly defined, and time-limited.

Partnership agreementsBi- or multi-lateral agreements that formalize broader partnerships (for example, around an issue like regional economic development), with participants accepting common terms and obligations for action.

Joint local organizationA joint municipal corporation, agency, or non-profit host organization, with a formal mandate and resources to lead regional planning and service coordination in specific areas (for example, in land use or emergency services).

Source: Adapted from Spicer (2015). 0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

U1 U2 U3 Outside

Figure 4. Housing built by growth boundary in Mexico

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

2014 2015 2016 2017 2018

UGB 1 UGB 2 UGB 3

Figure 5. Territorial reserves throughout Mexico (hectares)


– 8 –

Similarly, the proportion of UGB3 lands differs widely.

This factor, one would imagine, could determine the ability of different cities to develop more of their housing within core UGBs, yet, as we will discuss below, this is not always the case. This inconsistency may point to differences in local development policies and permitting practices as well as regional preferences for different housing typologies and development trends.

A second interesting comparison is how much UGBs have changed during the last federal administration. At the federal level, there are inflection points, most notably, between 2014 and 2015 and from 2017 to 2018, indicating an increase in the amount of available land per UGB (see Figure 5).

Table 3 indicates the number of hectares of land added in each city to the three boundaries during the last federal administration. While some metros have a particularly low reserve of urban core land, which may have justified such shifts, other shifts might not have been as appropriate. It is also important to note that most of these shifts occurred along UGB

3, meaning that this is the area that increased in

size (hectares) most significantly.

UGB3s had particularly notable increases (Table 4).

Guadalajara began with an UGB3 of 2,307 hectares, which

expanded to 3,869 in 2015, a 68 percent increase. Similarly,

Metro Comparisons

The metropolitan regions under analysis exhibit some important commonalities and differences, most notably in terms of the distribution of territorial reserves in their Urban Growth Boundaries, how much these boundaries have changed over the past few years, their different patterns of development within the UGBs, and their proportions of single or multi-family housing. This section will focus on comparisons among metros, and conclude by summarizing some key findings per city.

UGB3s account for most of the developable land across

the 14 metros and UGB1s are the most constricted areas

in terms of hectares available for development. Yet there are some notable variations, as some cities are particularly constricted within their UGB

1s. The total amount of

developable land within the three boundaries also varies widely by metro, ranging from 686.3 hectares in Puebla to 14,319 in Monterrey, by far the largest metro in terms of territory (see Table 2).

Monterrey, Tijuana, and Aguascalientes have the most significant opportunities to develop at their urban cores, given their land availability in these areas. Meanwhile, Puebla, San Luis Potosí, Cuernavaca, and to a certain degree Mérida, have almost no developable land within their UGB

1s.

Furthermore, Puebla, Toluca, and San Luis Potosí also have limited land availability along their UGB

2s.

Table 2. Territorial reserves per metropolitan area in 2018 (hectares)

UGB1

% UGB2

% UGB3

% Total

Guadalajara 142 3.0 725 15.3 3,860 81.7 4,727

Monterrey 855 6.0 2,066 14.4 11,397 79.6 14,319

Puebla 11 1.6 89 13.0 586 85.4 686

Toluca 89 12.0 49 6.6 606 81.5 744

Tijuana 300 7.9 135 3.6 3358 88.5 3,793

León 61 3.6 200 11.8 1437 84.7 1,698

Juárez 75 3.4 791 36.2 1319 60.4 2,185

Torreón 74 3.4 942 43.1 1,168 53.5 2,184

Querétaro 111 4.7 367 15.5 1,881 79.7 2,359

San Luis Potosí 13 0.5 102 4.2 2322 95.3 2,437

Mexicali 58 7.5 138 17.7 585 74.8 81

Mérida 37 0.9 1050 25.5 3029 73.6 4,116

Aguascalientes 352 17.8 175 8.8 1,456 73.4 1,983

Cuernavaca 1 0.1 257 28.4 647 71.5 905

IMFG Perspectives

– 9 –

after some of that land was developed, there was a further increase of 13 percent from 2017 to 2018. Toluca had two increases of 32 and 34 percent, respectively. Tijuana, however, surpasses both cities, with increases of 259 and 130 percent, respectively. León follows with a 66 and an 8 percent increases; Aguascalientes with a 48 and a 21 percent increases; and Cuernavaca with one major shift from 2016 to 2017 of 55 percent. While not as pronounced, Monterrey also had two important increases of 33 and 7 percent, respectively. More moderate increases were experienced by Puebla, of 20 and 14 percent; Querétaro, 2 percent from 2015 to 2016; San Luis Potosí 13 and 0.5 percent; Mérida 14 percent and Mexicali 8 percent.

Development patterns also vary significantly from one metro to the next, although there are some interesting commonalities, such as the fact that most housing in the 14 metros has been built in UGB

2s. This pattern differs from

those implied by national-level statistics, which is arguably a good thing characterizing these metropolitan regions. Nevertheless, there is a lot of variation among the 14 metros in terms of housing built outside the three boundaries, from 1.1 percent in Juárez to almost 36 percent in Cuernavaca (Table 5).

Table 5 ranks the 14 metros according to the share of housing built per UGB. As we can see, and notably despite

limited land availability, Puebla tops the list of housing development within its UGB

1, although the units created

may well be unaffordable housing.

Table 3. Additional hectares of land incorporated in each UGB per city (2014–18)

UGB1

UGB2

UGB3

Total

Monterrey 22 1,126 3,598 4,746

Tijuana 77 107 4,235 4,419

Guadalajara 60 509 2,015 2,584

Cuernavaca 0 566 332 898

Aguascalientes 0 140 721 861

León 0 49 670 719

Mérida 0 28 368 396

San Luis Potosí 0 86 287 373

Toluca 31 34 308 373

Querétaro 0 281 40 321

Puebla 0 8 170 178

Mexicali 0 0 45 45

Torreón 5 4 34 43

Juárez 0 0 0 0

Table 4. Percentage increases along UGB3s

2014–16 2016–18

Tijuana 259 130

Guadalajara 68 13

León 66 8

Aguascalientes 48 21

Monterrey 33 7

Toluca 32 34

Puebla 20 14

San Luis Potosí 13 0.5

Mexicali 8

Querétaro 2

Cuernavaca 55

Mérida 14


– 10 –

Despite a few notable exceptions, there continues to be a clear bias against multi-family housing construction in certain Mexican cities (see Table 6). Between 2013 and 2018, 46.1 percent of housing units built in Guadalajara were multi-family units, compared with 59.4 percent in Puebla and 45.2 percent in Tijuana. At the other end of the spectrum, Juarez did not build any multi-family units during the same period, and in Mexicali only 1.2 percent of its built housing was multi-family housing, similar to Torreon’s 3 percent. This meant that the average multi-family percentage among the 14 metros was 20.7 and the median barely 12.6.

Each metropolitan area under consideration has further specific characteristics. Guadalajara, the largest metropolitan area under study at close to 5 million inhabitants, added 2 municipalities and decreased its density (inhabitant per hectare) in the last decade, from 125 to 123 persons per hectare. Nevertheless, despite the fact that Mexican cities have relatively low densities when compared

to other Latin American cities, Guadalajara has a relatively high density with respect to the other cities under study, close to that of Mexico City’s metropolitan region.15 As previously mentioned, this city also has one of the highest percentages of multi-family housing construction in the country, although during the past federal administration (2013–18), it built only 3.8 percent of its housing within its UGB

1.

Monterrey follows Guadalajara in population size. It added five municipalities to its metropolitan region (for a total of 18), but multi-family construction accounted for

only 4.6 percent of new built housing from 2013 to 2018. Given that both cities are similar in population, it is interesting to contrast their different housing development patterns. The low rates of multi-family construction in Monterrey stand out because this industrial

and manufacturing metro is currently growing more rapidly than Guadalajara. It is not surprising, therefore, that it has lower densities and a more rapid rate of urban expansion.

Despite a few notable exceptions, there

continues to be a clear bias against multi-

family housing construction in certain

Mexican cities.

Table 5. Housing development per boundary (%), 2013–18

UGB1

UGB2

UGB3

Outside

Querétaro 2.8 Toluca 21.6 Juárez 1.1 Juárez 1.1

Guadalajara 3.8 Cuernavaca 27.3 Torreón 13.1 Mérida 1.5

Monterrey 5.8 Tijuana 38.0 San Luis 17.5 Aguascalientes 2.3

Aguascaliente 6.3 Querétaro 40.5 Puebla 20.2 Mexicali 2.4

León 7.8 Guadalajara 54.1 Cuernavaca 23.2 Puebla 2.5

Toluca 7.9 Puebla 54.5 Monterrey 24.5 Torreón 3.6

Mérida 8.5 San Luis 56.0 Tijuana 24.6 León 5.4

Torreón 8.7 Mexicali 56.4 Guadalajara 24.9 Monterrey 12.0

Tijuana 11.9 Monterrey 57.6 Mexicali 24.9 San Luis 14.3

San Luis 12.2 León 59.7 León 27.1 Guadalajara 17.3

Cuernavaca 13.8 Mérida 62.7 Mérida 27.3 Tijuana 25.2

Mexicali 16.2 Aguascalientes 63.4 Aguascalientes 28.1 Querétaro 25.4

Juárez 19.0 Torreón 74.6 Querétaro 31.5 Toluca 35.6

Puebla 22.7 Juárez 78.7 Toluca 34.9 Cuernavaca 35.7

Average 10.5 53.2 23.1 13.2

IMFG Perspectives

– 11 –

Furthermore, despite the amount of developable land within its UGB

1, it built only 5.8 percent of its housing within this

boundary (see Tables 2 and 5).

Puebla, third on our list, has a population of about 3 million. This city is not growing rapidly any more, but it is an already large and fragmented metro composed of 39 municipalities. Yet, despite the fact that it has relatively limited reserves at the urban core, it has the highest multi-family construction rate of all the 14 metros, the highest percentage (22.7 percent) of units built within its UGB

1, and

the fifth-lowest percentage of units built outside of all UGBs, 2.5 percent.

Toluca in central Mexico has a population of slightly more than 2.2 million, 16 municipalities, and a density of only 65 inhabitants per hectare. It is tied, along with Cuernavaca (with just over 1 million inhabitants), for the highest percentage of housing built outside all UGBs: 35.7 percent.

León (1.8 million inhabitants) is notable for having the highest density of all metros and a relatively low percentage of its housing built outside its three boundaries between 2013 and 2018.

Querétaro (1.3 million inhabitants) is a relatively average metro, with a density close to average, as its percentage of multi-family housing construction and housing construction along its UGBs

2+3, yet it built very little housing within its

UGB1 and an above-average percentage outside all three

boundaries.

San Luis Potosí (1.15 million inhabitants) is notable for the limited amount of developable land available at its urban core, yet it was able to build 56 percent of its housing within its second boundary between 2013 and 2018.

Aguascalientes (1.04 million inhabitants) is perhaps only notable for its relatively low housing construction outside its boundaries. And before moving on to northern and border towns, it is notable that Mérida, our only southern city, has the lowest density of all the metros, 56 inhabitants per hectare, and the highest number of municipalities added from 2010 to 2015: six (for a total of 11).

Tijuana (1.8 million inhabitants) stands out for being the only northern metro with multi-family units accounting for close to half its new housing stock. Perhaps more significant, however, have been increases in the number of developable hectares along the city’s UGB

3 from 2014 to 2015, and then

again from 2017 to 2018 (see Figure 6).

Conversely, Ciudad Juarez (1.4 million inhabitants) provides an interesting comparison. It has no multi-family construction, nor has it increased its territorial reserves during the last federal administration (see Figure 7). Yet it had the highest percentage of housing units built within its UGB

1

and UGB2, and the lowest percentage of units built on UGB

3

and beyond.

The comparison of these last two border cities suggests a marked difference in market conditions, development patterns, and practices. Although Tijuana’s housing construction sector has had a particularly hard decade, its housing demand has been and continues to be stronger than that of Juárez, a city that has struggled with high levels of crime and violence for several years. The strength of the real estate sector in Tijuana since the 1990s is apparent in Figures 6 and 7 and in the notable difference in terms of the leverage that the private sector had in Tijuana to redraw their UGB

3.16

UGB shifts and negotiations between private developers and the federal housing commission constituted a recurring theme in the survey responses, which will be discussed in the following section.

Discussion of Survey Responses

In order to assess the effectiveness of the UGBs, a survey was sent out to local and state planning officials and housing construction chambers. In total, 22 participants responded from 12 of the 14 metros under study.

One of the survey questions asked participants to state what group had the most influence over densification policies. According to 54 percent of the surveyed participants, the

Table 6. Multifamily construction from 2013 to 2018 as a percentage of total construction

Guadalajara 46.1

Monterrey 4.6

Puebla 59.4

Toluca 16.1

Tijuana 45.2

León 37.0

Juárez 0.0

Torreón 3.0

Querétaro 21.8

San Luis Potosí 7.8

Mexicali 1.2

Mérida 8.1

Aguascalientes 9.1

Cuernavaca 30.0


– 12 –

stakeholders with most influence were developers, followed by the federal government, according to 29 percent of the respondents. Similarly, 53 percent of the respondents claimed that developers were also the main beneficiaries of these policies. The survey questions also asked respondents to rate the performance of Urban Growth Boundaries according to six criteria.

Respondents were asked to give a score between 1 and 10 to each of the survey questions (see Table 7), 1 indicating the poorest performance. Overall, the boundaries received low grades. Their best grade is 5.4 out of 10 for UGBs’ ability to aid local governments better guide and plan for urban developement, while the worst grade, 4.1, for their ability – or lack thereof – to promote affordable housing production.

Respondents were also asked to provide a qualitative response backing their scores. Most representatives from local

and state governments argued that even the implementation of the initial formula used to draw these boundaries had one major flaw: the lack of local consultation and understanding of local conditions. They also noted that because of the limited amount of developable land at the urban core, and the lack of speculation controls and land and fiscal mechanisms, land prices have increased considerably, rendering affordable housing production more and more difficult in core and accessible areas.

Moreover, when the boundaries shifted, there was again almost no local consultation. Lobbying efforts and negotiations largely occurred between the federal government and developers and landowners who requested the shift of the boundaries in their cities. And although UGBs include certain services, they were not defined in relation to essential components such as transportation and mobility, or in

5000

1,0001,5002,0002,5003,0003,500

2014 2015 2016 2017 2018

Figure 6. Tijuana’s territorial reserves (hectares)

Figure 7. Juarez’s territorial reserves (hectares)

0

500

1,000

1,500

2,000

2014 2015 2016 2017 2018

IMFG Perspectives

– 13 –

order to promote mixed uses or other neighbourhood-level improvements. Finally, although UGBs have arguably promoted coordination between different government levels and institutions, this coordination, most local governments argue, has been top-down and dictated mostly by federal agencies and the private sector. This again highlights the persistent limited ability of local governments in Mexico to influence and guide urban development.

In summary, the most significant issues of the strategy under study, as highlighted by most survey participants, have been (1) the boundary shifts that bring into question who has the leverage to influence urban development and access its benefits (including land and housing), and (2) the lack of local input to draw, redraw, and complement UGBs according to the specific needs of each city.

Nonetheless, some positive aspects were highlighted in several survey responses. UGBs brought the issue of sprawl to the forefront of policy discussions and strategies in Mexico and attempted to promote more sustainable development through a tool that local governments can use to manage sprawl. Second, they have promoted coordination, albeit top-down, between different government levels and institutions. This coordination has allowed a few local governments to take further initiatives to better guide and contain urban growth and expansion. Third, although creating new low-income housing in urban core areas has proven almost impossible, some middle-income housing is being built and

promoted through subsidies, although these subsidies are mostly being absorbed by developers.

The private sector, represented by regional construction chambers, surprisingly did not have significantly different responses from other surveyed participants. They highlighted the continuous sprawling development characterizing some regions due to the relaxed nature of the UGBs, although some highlighted that this was particularly a result of informal settlements, while others recognized that sprawl was worse before their implementation. Perhaps since large-scale developers specialized in affordable housing construction

in the 2000s, they also highlighted that its support and production had significantly slowed down in recent years, admittedly due to speculation and high land prices. Furthermore, the private sector also highlighted the lack of local consultation during

the drawing and implementation of UGBs, although they recognized that certain developers have been able to influence the later shifts and inclusion of their lands.

Final Observations

While the federal rhetorical shift in Mexico towards promoting densification and compact and connected development may have helped some local governments guide their urban growth and development more effectively, the top-down nature of these new policies and the lack of local consultation to implement the UGBs exposes the political and administrative centralization still prevalent in Mexico, as well as the extent to which federal and state-level

Table 7. Quantitative survey responses

Survey Question Response Scores (average)

Have UGBs aided local governments in better guiding and planning for urban development? 5.4

How effective have UGBs been in containing urban sprawl? 5.3

Have the UGB shifts and negotiations been positive? 5.2

How effective have UGBs been in promoting more sustainable development patterns? 4.9

Have UGBs promoted institutional and metropolitan coordination among different government levels? 4.9

Have UGBs helped promote affordable housing production? 4.1

Have UGBs promoted housing construction in better or more accessible locations? 4.6

What stakeholders have had the most influence in the shifting of UGBs?Developers (54%)

Federal Government (29%)

What stakeholders have UGBs benefited? Developers (53%)

Cities (24%)

The lack of local consultation to implement the UGBs exposes the political and administrative centralization still prevalent in Mexico.


– 14 –

policies continue to overshadow local administrative and fiscal capacities. Despite being a federalist country, Mexico continues to centralize many of its functions and policy. On the other hand, local governments have been slow to innovate fiscal, regulatory, and land-use mechanisms to improve their finances and capacities, and to manage adequately matters such as urban development.

Furthermore, while in essence the federal urban development strategy shifted significantly during the last administration, in practice it continued to privilege a housing model that prioritized development interests above the production of affordable housing and a more effective strategy to guide development patterns. The lack of linkages between federal strategies, such as a one-size-fits-all initial UGB formula, and local plans and conditions (such as the location of environmentally sensitive areas), led to many limitations. Similarly, without the inclusion of other strategies at the local level, such as speculation controls and other fiscal mechanisms (such as land value capture), land prices will increasingly limit affordable housing production.

Notably, despite the federal policy shift towards densification, housing finance for new construction continued to be privileged above all other housing strategies, such as housing rehabilitation, which tends to benefit lower-income households who would otherwise be unable to purchase a new housing unit. In parallel, low-income housing finance has declined significantly in the last decade, while upper-middle income housing production has been on the rise (see the Appendix).

The author is at work on a deeper case-study analysis of Guadalajara, Monterrey, and Tijuana that will analyze the evolution in the governance models of these metros throughout the last two decades and examine specific local and metropolitan initiatives – or the lack thereof – in these

contexts. While recognizing constitutional, legislative, fiscal, and political differences, it will be interesting to determine whether, as in the U.S. case for instance, federal policies and fiscal incentives have strengthened metropolitan institutions and strategies.17 While globally, effective metropolitan governance has been hard to achieve, increasingly pressing and shared issues are making more and more cities join forces to address and collaborate on joint or metropolitan agendas.

Guadalajara’s IMEPLAN (Metropolitan Planning Institute) in particular, offers an interesting example of intermunicipal coordination shifting to a more autonomous and unique governance structure in the country, and possibly beyond, through the aspiration of creating a “fourth tier of government” at the metropolitan level. At the centre of such discussions, however, is the aspiration of discouraging the top-down nature of urban governance in Mexico and democratizing it by incorporating a larger number of stakeholders.

So far, one thing that has worked in Guadalajara’s favour is the support of its state government (Jalisco). Yet, the fair inclusion of civic society, not only the business community, will be paramount to ensuring a more democratic governance structure. Furthermore, Mexico’s peripheral and poorer municipalities have historically had much less leverage to participate in metropolitan decisions.

Finally, the delineation of what such metropolitan governance should or will be able to accomplish is also contentious, particularly in relation to certain topics, such as affordable housing promotion, land use and fiscal policies, and redistributive strategies. Thus, equity in metropolitan decision-making, as well as efficiency, in relatively fragmented contexts is a central interrogation of the next stage of this study.

IMFG Perspectives

– 15 –

$-

$50,000

$100,000

$150,000

$200,000

$250,000

1996 2001 2006 2011 2016New Construction Used Housing Improvements

Housing �nance in Mexico (in millions of pesos)

Source: Sistema Nacional de Información e Indicadores de Vivienda

Housing �nance in Mexico (per income sector in minimum salaries)

Note: Minimum salaries are used to refer to different income sectors in Mexico, with 0-4 representing low income,4-9 representing moderate income, and 9+ representing upper-middle income and above.Source: Sistema Nacional de Información e Indicadores de Vivienda.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0 - 4 4 - 9 9 + (Minimum Salaries)

Appendix


– 16 –

Endnotes1 United Nations, World Urbanization Prospects: The World’s Cities in 2016 (New York: UN Department of Economic and Social Affairs, Population Division, 2016), p. 1.

2 R. Eibenschutz Hartman and C. Goya Escobedo, C., Estudio de la integración urbana y social en la expansión reciente de las ciudades en México, 1996–2006: dimensión, características y soluciones (México D.F.: Cámara de Diputados, Secretaría de Desarrollo Social, Universidad Autónoma Metropolitana, Miguel Ángel Porrúa, 2009); González Hernández and Guadalupe Margarita, “Vivienda de interés social y utilidad: estudio de caso en la ciudad Zacatecas-Guadalupe, 1990–2010,” paper presented at the Congreso Nacional de Vivienda 2013, México D.F., March 2013; Paavo Monkkonen and B. M. Paloma Giottonini, “Repensar la contención urbana en México: Del control del crecimiento a la promoción del crecimiento de calidad,” in J.A. Montejano Escamilla and C.A. Caudillo Cos (eds.), Densidad, Diversidad y Policentrismo: ¿planeando ciudades más sustentables? (Mexico City: Centro de Investigación en Geografía y Geomática, 2017); OECD, OECD Urban Policy Reviews: Mexico – Transforming Urban Policy and Housing Finance (Paris: OECD, 2015); Susanne Soederberg, “Subprime housing goes south: Constructing securitized mortgages for the poor in Mexico. Antipode 47(2), 2015: 481–499; Alejandra Reyes, “Housing access and governance: The influence and evolution of housing organizations in Mexico City,” Cities 74, 2018: 327–333; Peter M. Ward, Edith R. Jiménez, and Mercedes Di Virgilio, Housing Policy in Latin American Cities: A New Generation of Strategies and Approaches for 2016 UN-HABITAT III (London: Routledge, 2015).

3 M. Rivero, E. Moreno, and M. de los Á. Velázquez, Los Perímetros de Contención Urbana: Nuevo marco decisional, 56–81 (Ciudad, Género, Cultura y Educación en las Regiones, 2018).

4 Cities with 500,000 to 1 million inhabitants have UGB3s with

a radius of 800 m, those with populations of 100,000 to 500,000 have UGB

3s with a radius of 700 m, towns with populations of

50,000 to 100,000 have UGB3s with radius of 600 m, and those

with fewer than 50,000 inhabitants have UGB3s with a radius of

500 m.

5 SEDATU [Secretariat of Agrarian, Land, and Urban Development], Modelo Geoestadístico para la Actualización de los Perímetros de Contención Urbana (Mexico City, 2018).

6 Shishir Mathur, “Impact of urban growth boundary on housing and land prices: Evidence from King County, Washington,” Housing Studies, 29(1), 2014: 128–148; R. Munton, London’s Greenbelt: Containment in Practice (London: Allen & Unwin, 1983).

7 G. Knaap, and A. Nelson, “The effects of regional land use controls in Oregon: A theoretical and empirical review,” The Review of Regional Studies, 18(2), 1988: 37–46; T. Miller, “Must growth restrictions eliminate moderate-priced housing?” Journal of the American Planning Association, 52(3), 1986: 319–325.

8 Mathur, “Impact of urban growth boundary,” 2014.

9 Claudia Puebla, “Los programas de vivienda,” in Sergio Tamayo (ed.), Los desafíos del Bando 2: Evaluación multidimensional de las políticas habitacionales en el Distrito Federal 2000–2006, 115–164, (México D.F.: GDF, Seduvi, Invi, CAM, UACM, 2007); Reyes, “Housing access and governance,” 2018

10 Tania Guerrero, “Perímetros de Contención Urbana ¿La Vivienda como Herramienta para Ordenar la Ciudad?” paper presented at Tercer Seminario Internacional Repensar la Metrópoli, Universidad Autónoma Metropolitana-Xochimilco, 2018; Monkkonen and Giottonini, “Repensar la contención urbana en México,” 2017.

11 Guerrero, Perímetros de Contención Urbana, 2018.

12 Monkkonen and Giottonini, “Repensar la contención urbana en México,” 2017.

13 Anavel Monterrubio, “Tensiones y contradicciones en torno de la producción de vivienda de interés social en la Ciudad de México. El caso de la NGO 26,” Revista Legislativa de Estudios Sociales y de Opinión Pública 10(19), 2017: 35–68.

14 Guerrero, Perímetros de Contención Urbana, 2018.

15 Mexican cities are much less dense than Brazilian and Colombian cities, in particular, but also than less populated European cities like Paris, Athens, or Barcelona, albeit denser than most North American cities.

16 Alejandra Reyes, “Mexico’s housing paradox: Tensions between financialization and access,” Housing Policy Debate 30(4), 2020: 486-511,, Special issue: “The Financialization of Home in the Global South.

17 Enid Slack, Metropolitan Governance: Principles and Practice, discussion paper IDB-DP- 659 (Washington: Inter-American Development Bank, 2019).

Appendix

IMFG Perspectives

– 17 –

WEB www.munkschool.utoronto.ca/imfg/

TWITTER @imfgtoronto

Documents

From the Top Down: The Governance of Urban Development in ... · (UGBs) across almost 400 Mexican towns and cities with more than 15,000 inhabitants. It is important to emphasize