Mexico's Housing Boom Becomes a Bust Jonathan Levin - Bloomberg
go to original May 20, 2013

Megalopolis - Nezahualcoyotl (Oscar Ruiz)

MEXICO CITY – Arturo Sandoval, 25, a homeowner in one of Mexico’s low-income developments outside the capital, commutes two hours each way to his job at a Mexico City soap factory.

In the Parque San Mateo community where Sandoval bought his home from builder Desarrolladora Homex for about $29,000, neighbors play soccer in the street between rows of abandoned properties.

His commute starts with a van to the station, then a bus into the city. Whenever he works late, he often misses the last van and has to walk the final stretch. Life in the housing development “isn’t everything they said it would be,” he said.

San Mateo’s deserted homes are evidence of the exodus from commuter towns that sprang up across Mexico during the last six-year presidential administration as a record 3 million government-backed mortgages and housing credits helped turn builders into billionaires.

Now, with foreclosures at a record, President Enrique Pena Nieto’s 5-month-old government is trying to reverse course on urban sprawl by shifting subsidies to encourage apartment development in cities.

Builders that specialized in the old strategy are struggling to adapt.

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