By Jamaal Glenn *
In February of this year, an American startup founder visiting Mexico tweeted a photo of a gorgeous, plant-framed, stucco walkway in the Roma Norte neighborhood of Mexico City: “Do yourself a favor and remote work in Mexico City — it is truly magical ✨” read the photo’s caption. The seemingly benign, now-deleted tweet quickly went viral, less for its aesthetic and more for its controversy. What seemed intended to be harmless, instead sparked outrage and debate online from Mexicans, and others, collectively expressing frustration at the influx of foreigners working remotely in Mexico City. “Please don’t,” replied one Mexican resident. “This city is becoming more and more expensive every day in part because of people like you, and you don’t even realize it or care about it.”
I found myself walking down similarly beautiful corridors on my second-ever visit to Mexico City in September. I arrived there from New York City as part of a US-Mexico Foundation-facilitated delegation of Americans working at the intersection of the public and private sectors in a program called the U.S.-MEXICO 360.
Like the controversial tweet’s author, I found the city delightful and easily imagined myself living and working remotely there. Searches for “Mexico remote work” on TikTok show countless montages of young English-speaking American workers voicing over glamorous, sound tracked point-of-view videos of themselves teleworking, eating, and exploring their way through the country.
Buoyed by its affordability, Mexico has long been a top global tourist destination. The overall cost of living in Mexico is nearly 50 percent less than in the U.S, and the country ranks 88 out of 137 in a global cost of living ranking. With 45 million international visitors in 2019, Mexico trailed only France, Spain, the U.S., China, Italy, and Turkey.
The Covid-19 pandemic has given rise to a new class of global-digital nomads who are spending more time in and permanently relocating to many of their favorite tourist destinations. As a result, smart policymakers in these places are preparing for a global competition to attract remote talent.
As much as any country, Mexico can be among the biggest winners of this new era if it chooses. But doing so will require a reconciliation of the tensions the country is facing around population growth, along with housing policies and investment that help ease those tensions.
Mexican policymakers have started to leverage the country’s other economic, cultural, and natural assets, to actively attract this growing group of people who are free to live anywhere. Mexico is one of more than 30 countries with some version of a formal short-term worker visa program. Visitors who make at least US $2,500 per month can stay for up to 12 months with the option to renew, while Americans can stay for up to six months with no visa. These policies are one factor in making Playa del Carmen and Mexico City the third and sixth fastest-growing remote work hubs worldwide, respectively, over the last six years.
Yet, digital nomadism can be divisive, especially when local citizens deal with issues like lack of affordability and underdeveloped infrastructure.
But digital nomads don’t just bring gentrification. They also bring an economic and innovation boon for local economies. Research has shown that skilled migrant workers import new and unique knowledge that does everything from increasing the rates of entrepreneurship to boosting the filing of new patents.
Mexico, like many places, needs to make investments that allow its economy to benefit from being a talent magnet while also working to mitigate its highest costs. The first place to start is by adopting more thoughtful land use policies, as well as digital nomad visas. That means allowing for, and promoting, the building of affordable, densely-built housing where supply is responsive to demand.
A 2022 MIT study on Latin America’s housing challenges makes the case that Mexico’s housing supply needs to be better planned, denser, and more formal. I agree.
During my time there in September, much of Mexico City felt less dense than I had hoped for a metropolitan area of 21 million people. Density, after all, lowers per capita carbon footprints and decreases infrastructure costs. My feeling was also informed by my last two years developing a framework, as part of a group of civic experts, on how cities should best deal with growth. Among other things, we conclude that the best cities — what we call ‘NOVA Cities’ — should be “compact, dense, committed to multimodal transportation, with mixed-use housing and no single-family zoning within one kilometer of heavy transit infrastructure.” Unfortunately, neither Mexico City nor any other major Mexican city is there yet.
The MIT study predicts that Mexico needs to build 800,000 housing units per year over the next 20 years, at the cost of nearly 4 percent of GDP, to keep up with demand. Albert Saiz, the director of MIT’s Urban Economics Lab and the author of the study, told the Mexico Daily Post that “the prevalence of self-built, one-family homes is a bigger problem than the growing numbers of ‘digital nomads.’”
That lack of density also contributes to housing unaffordability for locals. Mexico City, home to 16 percent of the country’s population, has an average home price between six and 15 times greater than the average income. That is at least 20 percent higher than the global median for cities and at least twice the international affordability standard price-to-income ratio of three. Overall, Mexico’s home prices are more than eight times greater than the average income.
More innovative housing policies won’t solve all the problems of population growth, and remote-working arrivals can bring both promise and problems. In the long run, Mexico’s digital nomads will bring more good than bad, and land use policies that increase density and affordability will benefit Mexicans even if the country decides to close its doors to the remote-work relocation revolution. But Mexico can, and should, embrace this new era and build enough dense housing supply to make it work for everyone.
* Jamaal Glenn is an investor, writer, and university professor living in New York City. He has also an alumni of the U.S.-Mexico Foundation’s USMX360 program. The US-Mexico Foundation is a binational non-profit organization dedicated to fostering bilateral cooperation and improving the understanding between the United States and Mexico by activating key people in the relationship that once were dormant. Twitter: @usmexicofound