More Americans live and work in Mexico, so what about locals?

Derrick Morgan moved to Mexico during the pandemic after a solo trip.

“I fell in love with the culture, the people, everything about the city,” said the 31-year-old lawyer and self-proclaimed “digital nomad.”

Warm weather and relaxed Covid restrictions played a part in his decision to spend more time there after his first visit in late 2019. He now lives and works in Mexico City during the fall and winter – he qualifies himself -even from “snowbird”. — and he’s staying in short-term rental properties. The most attractive factor? It’s cheaper to live there than when he’s in his Chicago condominium.

“I was living in an apartment as nice as my condo but for a third of the price. You can’t really beat that,” Morgan said, noting that the cost of living in Mexico in general was almost half of what it is in the United States.

Mexico City has seen an influx of people migrating to the historic metropolis, especially during the pandemic when remote work made it possible to work from different locations. Currently, 1.6 million Americans live in Mexico, according to the State Department, and Mexico City is the fifth-ranked destination for digital nomads in the world, according to nomadlist.com.

While foreigners have reaped the benefits of cheaper housing by spending money on the local economy, some critics say it has created more inequality for local Mexicans who feel overpriced.

The influx of expats with high purchasing power has led to viral videos of local residents condemning them for the rising cost of living and gentrification in the capital.

Mexico City resident Martin Naranjo drew attention to the issue in a TikTok video, decrying that taco stands and local-owned bodegas are turning into yoga studios and cafes in some areas. He spoke of people having to move away from the city to find affordable rent, food and entertainment as prices have soared in recent years.

He cited signs with foul language that have been posted in Mexico City neighborhoods addressing foreigners who are “new to the area” or work remotely. As he noted, the signs have gone viral on social media.

Morgan said he’s seen these signs posted weekly in areas where he lives, though his experiences have been largely welcoming.

Some locals believe there is little correlation between rising prices and the influx of Americans, with some saying the effects of having more foreigners are generally positive.

Hector Romero, a partner at Peter & Romero, a Mexico City-based real estate firm, has seen an increase in the number of foreigners seeking to live in the capital since the pandemic, with young professionals at the forefront of the movement.

Regions are experiencing an economic revival, he said, as newcomers have high disposable income.

He pointed out that Mexico City is not cheap, but compared to other countries where digital nomads migrate from, it is much more affordable.

“If you earn your salary in US dollars, pounds or Canadian dollars, you better live in Mexico City.” said Romero.

As for rent prices, they had risen before foreigners flocked to the city, he said.

“I think it’s a false dichotomy, saying ‘I can’t rent now because there are more foreigners,'” Romero said. He believes that the backlash towards the newcomers is based on the alarmism of the inhabitants who see their visibility increased.

“It’s more related to income than nationality,” he said. He thinks those areas with higher numbers of digital nomads are already economically out of reach for most residents.

But not everyone agrees with this assessment.

Jesús González, 40, works in marketing. He has lived in La Condesa for 16 years and works in Roma, both considered upscale neighborhoods.

“I know there has been a great migration of people who have left and foreigners are coming to take their place,” he said. “I know a lot of neighbors who no longer live in the neighborhood because of rising rents…I know people who had mortgages but they had to sell them, they couldn’t keep paying.”

Due to rising prices and the pandemic, some locals have left Mexico City for nearby alternatives such as Cuernavaca or Puebla, where there are larger properties with deeper discounts.

According to González, foreigners are buying properties, and not just in upscale neighborhoods.

“In my experience, it has nothing to do with social status. (Foreigners) are buying anything from penthouses to small apartments… They’re interested in the glamor of buying apartments in these historic areas,” he said.

Government of Mexico: yes to more “nomads”

Last month, Mexico City Mayor Claudia Sheinbaum announced that the city had signed an agreement with Airbnb to increase the number of digital nomads coming to live and work there, a partnership supported by UNESCO.

At a press conference, she said the city hasn’t seen a link between more Airbnb rentals and higher rental prices, adding that most digital nomads choose to stay in expensive neighborhoods, such as than Condesa, Roma and Polanco, which already had high rents.

Sheinbaum said his administration is aware of the concerns and will continue to monitor the situation.

One of the most popular ways for foreigners to generate income in the city is by buying properties and renting them out as Airbnbs.

“For me, it’s now cheaper to live in an Airbnb than to rent,” said González, who thinks expats have a grip on the cost of living in the area.

Beyond housing

González believes the effects are not limited to the housing market. He notes that in addition to residential properties, the newcomers are now operating commercial businesses which have also been successful.

The wave of newcomers increased trade, stimulated new businesses, and increased wages for some locals. But, he added, in the process of gentrification, some win and some lose.

“I say we should see the influx of foreigners from two angles: it benefits a lot – full restaurants, high trade, cafes. It’s a positive development,” González said. “On the other hand, the formula is simple: the economic power is totally different from the local population, so they come to take over.”

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