Thinking about using a new property purchase as an Airbnb in Mexico? You may want to familiarize yourself with the anti-Airbnb initiatives gaining momentum here first.
In this article, I’ll examine the current restrictions on Airbnb in Mexico City, proposed restrictions in Guadalajara, and where and why there’s been blowback. In part two of this series, coming soon, I’ll do a health check on Airbnb investments in popular tourist towns across Mexico.
A Housing Crisis in Mexico City Leads to Xenophobic Protests
Local housing activists have held two small but angry demonstrations against gentrification and over-tourism in Mexico City this month. They’ve captured global media attention for acts of vandalism and xenophobia, which are not typical of Mexican protests.
Participants carried signs that laid bare their frustration with foreign visitors and residents, e.g., “You’re a colonizer not a fucking ‘expat” and “Expat = Gentrifier.” President Sheinbaum has been quick to condemn the overtly xenophobic messages while expressing sympathy with their cause.
What Caused This Housing Crisis?
It’s pretty easy to blame Airbnb and the crowd it brings in. If you spend any time in the affluent neighborhoods of CDMX, you see how digital nomad gringos flock to the same places, often making zero effort to learn the language or adapt to the local culture. Though it doesn’t describe them all, I’ve witnessed it countless times.
Digital nomads in CDMX are now so numerous and spending such large sums of money that they’ve steadily altered the character and spirit of these places. Don’t take my word for it, just listen to longtime locals.
But that’s not the whole story.
Recently, academics have pointed to government policies and political goals that have contributed to massive housing inflation in Mexico City over the past two decades.
For one, Mexico’s federal government has a long history of promoting tourism to diversify the economy, create jobs, and attract foreign capital. During the pandemic, this effort was privatized and became a “Visit Mexico” campaign managed from an office in New York City.
It was hugely successful at bringing more foreign visitors to Mexico.
While promoting Mexico to the world, CDMX failed to expand its housing stock much in recent years. The same academics found that new home construction in Mexico City lagged all other Mexican states between 2010 and 2020.
And when housing in the city’s most desirable neighborhoods got scarcer, prices surged. That’s Economics 101.
On top of these factors, CDMX’s political leaders were staunchly pro-Airbnb, until it became a political liability.
During Claudia Sheinbaum’s tenure as mayor from 2018-2023, the city rolled out the red carpet for digital nomads. Back in 2022, when asked about rapidly rising rents in the neighborhoods attracting digital nomads, Sheinbaum said her government saw no direct connection between Airbnb activities and housing inflation.
So I guess it’s no surprise that there were zero restrictions on the booming short-term rental industry until 2024. In fact, Sheinbaum’s position allied her with wealthy Mexican property owners who were freely jacking up rents to whatever the market would bear.
It was a curious stance for a supposedly populist party. All told, these actions helped usher in the gringo wave that no one seems to want now. And it’s a good example of … You reap what you sow.
The Anti-Airbnb Movement in Mexico City (CDMX) Brings About Some Restrictions
Last year, the CDMX government under new mayor Clara Brugada (also of the Morena party) realized the locals had had it and something needed to be done.
In 2024, a cap of 180-nights per year was adopted for all STR units in Mexico City, which effectively limited occupancy to an annual maximum of ~ 50%. New regulations also required owners to inform their neighbors when running a STR, register with the city, and report occupancy rates of their unit(s) every 6 months to the Ministry of Tourism.
The hope is that these restrictions will encourage some property owners to shift units to long-term rentals or sales, alleviating soaring housing costs. There are fines and penalties for violations.
According to Homie.mx, the 50% occupancy cap makes it difficult for many property owners to turn a profit on their STRs. They peg the breakeven rate north of 60% occupancy.
To be fair, the owner’s residency status has a huge impact on the profit potential of an Airbnb. This is because anyone with an RFC number and tax residency status pays lower rates on their STR profits due to Mexico’s progressive tax system.
Plus, the Mexican government generally taxes the crap out of short-term rentals, with foreign owners often paying 20%-30% in taxes on those earnings.
Too Little, Too Late?
Despite the new restrictions, rents continue to rise in CDMX’s most coveted neighborhoods. According to El Economista, average monthly rents in Roma Sur have hit $42,800 MXN in 2025, while in Hipódromo they’re averaging nearly $30,000 MXN monthly.
To those on the ground, it can be hard to see any impact from the new restrictions. I’ve visited Mexico City multiple times in the past year, and continue to see property ads on buildings in these neighborhoods posted in English, which gives you a good idea of who’s targeted with these nosebleed rents.
Mayor Brugada’s New Housing Plan Looks to Take Things Further
Following this month’s protests, Mayor Clara Brugada announced a “master plan” a few weeks ago to further combat gentrification.
Her proposal targets 11 neighborhoods that have seen the most price escalation and displacement in recent years. According to city officials, it includes the Hipódromo, Condesa, Juárez, Roma Norte, Roma Sur, Doctores, and Buenos Aires neighborhoods in Cuauhtémoc, Miguel Hidalgo Escandón, and San Miguel Chapultepec’s first and second sections.
The plan includes rent control (capping rent increases at or below the inflation rate), investment in thousands of units of public housing in these neighborhoods, and additional unspecified regulations on short-term rentals.
After living in San Francisco for years under rent control policies, I have zero confidence in that strategy as a way to contain rents. It distorts the market and magnifies housing scarcity.
In any event, Brugada’s plan will be discussed at future forums and working groups around the city. It remains to be seen how much of it will be enacted, and when.
Guadalajara is Waking Up to Airbnb Challenges Too
Though nowhere near as organized as CDMX, local politicians are beginning to advocate for new measures to increase long-term affordable housing options for residents. They cite cost-prohibitive rents in neighborhoods with heavy concentrations of Airbnb listings.
A young politician named Mariana Casillas recently introduced a proposal to rein in short-term rentals. As a member of the Futuro Party, Casillas is advocating for new restrictions due to what she sees as their negative impact on locals’ quality of life.
She claims that 1 in every 3 homes in the central Obrera neighborhood is a short-term rental on Airbnb. (This neighborhood sits just west of Colonia Americana in Guadalajara and is ground zero for digital nomads and tourists.)
In addition, citing statistics from INEGI, Casillas says Jalisco now has 450,000 vacant homes (15% of the total housing stock), while 95,000 families in Guadalajara cannot find affordable housing.
Up to now, rules on Airbnb and other short-term rental properties in Guadalajara have been minimal. Being registered and permitted is all that’s asked, and STR owners acknowledge that enforcement is rather lax.
If passed, Casillas’s proposed reforms would impose a:
- 100% surcharge on property taxes on homes left empty for more than a year, with exemptions for things like temporary relocation for work, health, or education needs. For individuals, the law would apply to more than 3 empty homes. Real estate companies would be penalized for having only one vacant property.
- Cap the number of nights an Airbnb can be rented at 180 per year, as in CDMX.
- Ban all new residential properties from short-term rental platforms. To be considered “newly built,” a property must be less than 5 years old.
Airbnb/STR Restrictions That Could Actually Help
No one asked me, but if I were designing a new policy, I’d require all Airbnb operators in Guadalajara to apply for new licenses and set a limit on the number granted per neighborhood. After all, if certain parts of town are already saturated, it makes no sense to “grandfather in” all the existing STR properties.
It would also be beneficial to focus the restrictions on “whole residences” rather than rooms in owner-occupied homes. This would enable ordinary people who just want to earn a little money on the side to keep renting out unused space in their homes, since these activities don’t displace other locals.
Cities could also ban individual owners from listing more than a few properties on STR platforms to eliminate corporate participants. These large-scale activities by deep-pocketed investors are a bigger driver of displacement.
On the other hand, the occupancy rate has no bearing on the core problem — it only serves to make the STR market less attractive to all players. And frankly, it strikes me as impossible to enforce given that owners can list on multiple platforms.
Conclusion
I think it will be an uphill battle for Casillas’s proposal in Jalisco. The Morena Party isn’t in charge in Jalisco like it is in CDMX.
Here, locals openly admit that the ruling Movimiento Ciudadano Party is heavily involved in real estate speculation. Plus, the city’s top employer has a major stake in seeing this gravy train continue.
Regardless of what happens, this initiative is a sign of growing discontent among residents of Guadalajara. And an indicator that the tide may be turning against STRs.