2016 Urban Georgraphy Delgadillo: Selective modernization of Mexico City and its historic center.

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URBAN GEOGRAPHY, 2016 http://dx.doi.org/10.1080/02723638.2015.1096114

Selective modernization of Mexico City and its historic center. Gentrification without displacement? Victor Delgadillo

Department of Urban Affairs and Political Science, Universidad Autónoma de la Ciudad de México (Autonomous University of Mexico City), Distrito Federal, México

ABSTRACT The logic behind recent processes of urban restructuring in Mexico City is market-oriented. This has increased land and housing prices and has made it more difficult for low-income populations to remain in revalued central areas. This article (1) reviews the grow­ing academic debates about the emergence of gentrification pro­cesses in Mexico City and Latin America, where the forms, timing, and intensity of gentrification are different from those in cities of the Global North; (2) analyzes public policies that since the year 2000 have focused on an intensive, compact, and sustainable urban development, and have been oriented toward the selective mod­ernization of the more profitable urban areas; and (3) analyzes the “rescue” of the historic center of the city and the construction of two megaprojects. The question of, and debates about, gentrifica­tion that apparently occurs without displacement is central to these three issues.

ARTICLE HISTORY Received 1 May 2013 Accepted 7 August 2015

KEYWORDS Mexico City; gentrification; historic center; megaprojects; displacement

Introduction

Mexico City has undergone processes of deep urban transformation since the early 1990s. These changes have been in line with market-oriented urban development and state-entrepreneurial urban administrations that favor private real estate. In this paper I argue that recent public policies and private investments have selectively modernized the most profitable urban spaces in Mexico City (from the historic core to parts of the south and west of the city), and have contributed to a rise in land and housing prices. This change has displaced—and continues to threaten to displace—those low-income populations that inhabit these areas: however, this displacement is not always direct. Concerns for the environment and for economic growth have provided local govern­ment with arguments in favor of several policies aimed at a “return to the center” and urban development that is “competitive”, “sustainable”, and “compact”. Under these labels, several residential and service-oriented megaprojects have been carried out on unused land in obsolete industrial areas. Other megaprojects include large-scale trans­port infrastructure, the most recent being toll roads under concession to the private sector. Some central and historic neighborhoods in the city have been remodeled for

CONTACT Victor Delgadillo [email protected] © 2016 Taylor & Francis

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use by the middle class. Frequently, these policies and megaprojects generate social discontent and in some cases they have displaced the original populations either as a pre-condition or as a consequence of the remodeling process.

The main goal of this paper is to show how recent urban trends, public policies, and private investment are producing an exclusive and exclusionary city where low-income populations have been displaced from central areas of the city toward an expanding periphery.

First I analyze growing academic debates on the emergence of gentrification in Mexico City and Latin America more broadly (including its different forms, periods, and intensities in comparison to the same phenomenon in the so-called Global North). I pay special attention to the debate about gentrification without displace­ment, which some Mexican and Latin American authors claim is occurring and represents, according to them, the biggest difference with the gentrification processes of the Global North. Next, I analyze the policy of population densification in inner city areas (first called Bando 2 and currently branded as compact city policy by the public authority), which has been the basis for the recent development of several megaprojects. By September 2014 different foreign and domestic investors had built 35 megaprojects and towers in Mexico City: 6.5 million square meters1 in total were built. In this paper I only have space to discuss two of the largest and most representative megaprojects, namely New Polanco and Mitikah Progressive City. The paper focuses especially on the selective rehabilitation of the historic center. Since the 1990s public policies have tried to incorporate the private sector in their “rescue” efforts in this area, recognized by UNESCO as a cultural World Heritage site. In 2002, Carlos Slim, the second richest person in the world, decided to participate in this (in his own words) “honourable task” with the support from local and national governments (Fundación Carlos Slim, 2011). He bought several buildings and created a philanthropic foundation and a real estate company, which includes 51 buildings valued at 781 million Mexican Pesos (USD$60 million) (CENTMEX, 2007). However, this investment is just a small fraction of the mag­nate’s real estate portfolio in Mexico City.

The three cases I discuss in this paper (see map in Figure 1) can be understood as gentrification processes, in which low-income populations are being displaced as a pre-condition or exclusionary effect of public and private investments. This article draws on the following operative definition of gentrification: a process where particular urban land is subjected to large-scale capital investment (promoted or supported by the government) with the aim of developing businesses and areas of consumption (residential, commerce, services) aimed at groups of the population with higher incomes than the previous residents and users of that space. This produces an increase in urban rents and, in many cases, the direct or indirect displacement of low-income populations, although displacement may also occur afterward (Casgrain & Janoschka, 2013; Delgadillo, 2014; González, 2010; Hiernaux, 2013; López-Morales, 2013, 2011).

The purpose of this article is to show that gentrification is the result of public efforts that seek the transformation of the city to increase its economic competitiveness through entrepreneurial urban policy prescriptions. The different cases addressed here

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Figure 1. Mexico City: recent urban projects and policies. Source: Author.

display diverse, yet simultaneous, processes of selective modernization in Mexico City that can be seen as evidence of different types of gentrification.

This paper is part of a broader investigation into urban transformations in 10 central neighborhoods in Mexico City. In this research, I use quantitative and qualitative methods, namely analysis of population and housing statistics, constant monitoring of the real estate market, and urban conflicts in the press, and on-location fieldwork— including interviews—among other sources. I have also considered information and data obtained from previous studies.

Gentrification without displacement?

Several researchers have shown that gentrification is undergoing a process of mutation in the twenty-first century and that the “classical” definition (the rehabilitation of old neighborhoods in central areas which are in decay, the traditional narrative of gentrifica­tion in the Global North) no longer describes current processes, as gentrification now encompasses new territories and forms, and has expanded throughout the world (Lees, Bang, & López-Morales, 2015; Lees, Slater, & Wyly, 2008; Smith, 2002). It is beyond the scope of this article to scrutinize the considerable literature produced in Europe and North America (although Lees et al., 2008, 2010; do that); nevertheless the concept of gentrifica­tion is increasingly used, and has been reappropriated, redefined by several scholars, and disputed by conservative researchers and public authorities in Mexico City. This Mexican discussion is helpful in understanding similar debates in other Latin American cities, which highlight the sizeable and multidimensional differences between the Global North and the Global South (see Hiernaux, 2013; Janoschka, Sequera, & Salinas, 2014; López-Morales, 2013; 2011).

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Yet the main focus of this article is not to evaluate the contribution of Latin American researchers to our understanding of the process of gentrification, nor to review their efforts at applying the concept to their cities. Indeed, Janoschka et al. (2014) provide a thorough review of this literature, showing that gentrification in Latin America has been studied in relation to four fundamental processes: (1) symbolic gentrification, the improvement of urban spaces with public resources, with the aim of attracting private investment (renovation of historic centers, public security, the relocation of informal street vendors); (2) neoliberal gentrification policies, the range of state policies that favor private profit in selected urban territories and that attract new users; (3) gentrification driven by the real estate market, particularly in central and peripheral urban areas; and (4) social movements and protests that oppose gentrification processes.

Janoschka et al. (2014) and Delgadillo, Díaz, and Salinas (2015), amongst others, show that gentrification has grown considerably in Latin America and explore a diverse range of urban restructuring processes occurring in different parts of its cities. Mexican researchers have thus far responded to the concept of gentrification in three different ways: rejection, mechanical adoption, and critical adaptation. However, this is a rapidly moving debate. Some authors who now observe these processes previously argued that gentrification did not occur in Mexico City. Their argument was that population densification and urban “rehabilitation” policies in the historic center and inner city areas targeted uninhabited buildings in neighborhoods that had been largely aban­doned, and that new residents arrived without displacing other populations (Delgadillo, 2005). These studies, however, did not take into account some subtler forms of indirect or exclusionary displacement that are described in the English literature (Davidson & Lees, 2005; López-Morales, 2013; Marcuse, 1985; Slater, 2009) and even in some Mexican work (see for instance Delgadillo, 2015).

In 1993, Peter Ward claimed that gentrification was not happening in inner city areas of Mexico City (and he also included Buenos Aires, Montevideo, Rio de Janeiro, and Sao Paulo as part of his analysis) in the same way that it had happened in the United States or the United Kingdom (Ward, 1993). For Ward, the rent gap was not large enough to attract investors, partly due to the powerful and lucrative economic activity based on services and craft production, which prevented the middle class from being interested in those areas for residential purposes. Carrying this argument forward, pioneering work by Hiernaux (2003) suggested that gentrification may happen in the near future because conditions were changing: the government had attracted private investment to some of the older neighborhoods, and middle-class youth (educated abroad and able to speak other languages) used these areas for recreation and con­sumption. Indeed, Melé (2003) and Streule (2008) argued that a specific local variant of gentrification, previously identified by Jones and Varley (2001), was occurring. They point to deteriorated urban areas, previously occupied by low-income groups, where increasing land values led to new land uses destined for higher-income groups, regard­less of specific use (residential, commercial, or services). The student collective Taller del Mapa al Aire (Workshop on Aerial Mapping) (2009) highlighted the “order and simplicity” (Clark, 2005) of a process that expels the poor from the renovated historic center in order to capture the rent gap (Smith, 1996), namely the differential between current land rent and a much higher potential rent, driven by the advantages of

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location, infrastructure, services, and public construction regulations, and captured by privately led redevelopment (López-Morales, 2013). The rent gap grows when capita­lized rent prices fall, or when the potential rent increases due to public policies or regulations.

Additional research on inner city neighborhoods in Mexico City (specifically the Roma and Condesa neighborhoods) describes the gentrification process in classical terms, as a 1990s urban rebirth—not planned by the government—that represents a “creeping type of operation” (González, 2008, p. 191) where young people found affordable accommodation in an attractive urban setting to live and work. They then became interested in investing there (Quiroz, 2012; Salinas, 2013), even expanding real estate businesses and service activities to neighboring areas. However, those pioneers, at the beginning of the process, did not displace any residents.

In this sense, González (2010) speaks of “light gentrification” where new private invest­ments that capture urban rents do not lead to population expulsion. In such locations there is a new range of cultural and culinary activities and new options for living arrangements, as well as services that are directed at higher-income groups (tourists, users, and residents), which coexist with a range of traditional services that meet the needs of the local popula­tion. In a similar vein, Hiernaux (2013) speaks of “creole gentrification” in the center of some Mexican cities where urban models imported from the Global North have been adapted to the different local realities of the Global South. One implication is that the process of gentrification is triggered by different factors: the most striking difference between Mexican cities and those of the Global North (González, 2010; Hiernaux, 2013) is the limited scope of the former to attract new residents, and the significant (albeit almost invisible) presence of low-income immigrants residing in urban centers in deteriorating, precarious, and/or overcrowded dwellings. This explains the coexistence of consumer services for high-income groups and traditional services for low-income groups, as well as no visible direct displacement of original inhabitants.

This debate about gentrification without displacement reflects the heterogeneity of historic centers in Latin America, inheritors of socio-spatial segregation where slum dwelling coexists alongside revalued buildings. This contrast, together with the diversity socioeconomic strata often located cheek by jowl, is found in historic centers such as those in Santiago de Chile, populated by migrants mainly from Peru and Colombia (Borsdorf & Hidalgo, 2013); Buenos Aires, which attracts migrants from Paraguay and Bolivia (Rodríguez & Fischnaller, 2014); and in some of the new loft apartments in the Colonia Roma in Mexico City that stand next to sites occupied informally by indigen­ous migrants from other Mexican States (Delgadillo, 2014). Borsdorf and Hidalgo (2013) show that the presence of slums (concentrations of cheap boarding houses) on the micro scale in Santiago de Chile is not an obstacle to gentrification. They also recognize that real estate reinvestments are at an initial stage, and that it is not known whether the slums will stay or be replaced.

Disputed cities, disputed concepts

As an echo of the Hamnett (2008) and Slater (2009) debate, in Latin America not only cities are disputed, but concepts and theories too. Some authors argue that gentrifica­tion does not expel people, but puts different social groups close to each other and thus

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creates a possibility for social mixing (Sabatini, Sarella, & Vázquez, 2009). Rojas, Eduardo, & Emiel (2004) suggests that the poor residents are not displaced in a coercive way, but that their displacement is voluntary: they leave because they have improved their socioeconomic conditions and buy land or houses in the periphery or elsewhere, similar to the model of residential and socioeconomic mobility proposed by Turner (1968) in the 1960s. In the same vein, sources from different levels of government in Mexico City argue that gentrification is positive and inevitable. The Miguel Hidalgo Delegation authority (2012) states on its website that gentrification rehabilitates, revitalizes, and rejuvenates neighborhoods and does not expel anyone. In this version no one is displaced and no one needs to move to go to buy bread. In November 2014, in a web-blog discussion of Milenio Newspaper (2014), the former head of the Urban Development Office of Mexico City argues that gentrification is an inevitable process with some negative collisions, but many creative forms and positive impacts for cities and its inhabitants, for instance greater security and better services for consumers (who can pay for it).

Two of the elements that clearly define gentrification are the social class dimension and social displacement (direct or indirect). However, gentrification processes happen at different speeds, rhythms, and intensities, and thus social displacement can be either a condition for gentrification to occur or the result of investments that have been made. In this sense, Slater (2009), drawing heavily on Peter Marcuse’s (1985) work, identifies four types of displacement: direct displacement, when owners or tenants suspend payments, when rents are increased, and when the state expropriates or evicts; con­secutive displacement, generated by urban deterioration; exclusionary displacement, when the new land-related services are inaccessible to the low-income population; and, finally displacement through pressure, due to rising living costs.

Those, and other causes and types of displacement, have been recognized by Mexican and Latin American authors since the 1990s: displacement is occurring, and there is little evidence that gentrification is occurring by way of the disappearance, through social change, of the social classes originally inhabiting the gentrifying neigh­borhoods, as Hamnett (2008) has observed in Britain. Direct displacement is caused by many factors: liberalization of frozen (control of low) rents (established in the 1940 decade); economic difficulties leading to evictions because of mortgage default; eviction for trespassing private or public properties; evictions to further the execution of urban renewal projects, such as the creation of public parks and squares or expanding streets; homeless displacement because of media events (Olympic games, the soccer World Cup); or the visit of distinguished figures (presidents, the Pope). Other direct displace­ments are caused by disasters (earthquakes, floods), which represented an opportunity to “solve” the problem of the poor in urban peripheries, through public aid (see Delgadillo, 2015). However, from our perspective, the most common displacement type in Mexico City, in the twenty-first century, is the exclusionary one, as new real estate and services are unaffordable for resident populations.

Mexico City: urban trends and urban policies

Although Mexico has historically been home to a highly unequal society in socio­economic terms, the situation has been exacerbated by the rollout of neoliberalism. Between 2008 and 2012, the number of poor people (whose income does not meet their

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basic human needs) grew from 49.5 to 53.3 million (i.e. from 44.2% to 45.5% of the Mexican population) (CONEVAL, 2013). According to the World Bank (2014), the highest 10% of the Mexican population earns 38% of the total income, while the lowest 10% of the population earns just 2%. In addition, in 2007 about 9.5 million Mexicans resided in the United States (8.6% of the country’s population) because of the high unemployment rate in Mexico, which rose to 4.8% in 20072 (Ordaz & Ruiz, 2011). However, Ordaz and Ruiz (2011) estimate that 27.1%—or over 11.5 million—of eco­nomically active people work in the informal sector.

Mexico City, also known as Federal District (DF), is part of a Metropolitan Region engulfing a continuous urban area and a few more dispersed settlements. These include 16 administrative districts in the DF (called Delegations), 59 municipalities in the State of Mexico, and one in the State of Hidalgo. At present, the population of the metro­politan area is 20 million people, of which only 8.6 million live in the DF while the rest live in other metropolitan municipalities.

The metropolis has undergone major urban development processes: on the one hand, the metropolis has experienced population loss in its center since the 1950s; this trend had become more prominent by the end of the twentieth century. This population loss is due to the expansion of activities in the tertiary sector in the more accessible areas of the metropolitan center; land-use changes from residential to commercial; the physical deterioration of the building stock; the absence of housing policies; and increased housing supply at the outer reaches of the city (Delgadillo, 2008). There have been, since the year 2000, some policy attempts to mitigate this trend. Yet, the formal and informal expansion of urban and suburban sprawl due to access to cheap land (PUEC, 2011, p. 13) has overwhelmed policy attempts to slow it down. Indeed, during the past decade, federal government housing policy has encouraged formal subdivisions in the city outskirts, and has voraciously consumed peripheral land to host residential housing units set in enormous housing estates (Delgadillo, 2014).

The Federal District (DF), which consists of the city center as well as the metropo­litan area’s more central parts, has been unable to retain its population. However, a close scrutiny of population changes within the metropolis seems to suggest that population losses have been selective, driven by increasing land and housing costs that push low-income populations to neighboring municipalities in the metropolitan area. This is further explained below.

First, between 1990 and 2010 the population growth in the DF was only 615,000, while population in the metropolitan region increased by four million. During the same period, eight of the 16 Delegations that make up the DF registered population losses totaling 435,045 inhabitants. The other eight Delegations, despite having poor infrastructure and services, and an urbanization ban due to their designation as ecological conservation areas, registered population gains of 1,050,345 inhabitants.

Second, between 2005 and 2010, the number of people who were originally from the DF but resided in the more peripheral areas of the State of Mexico rose from 255,000 to 382,202 (INEGI, 2005 and 2010). It is interesting to note that the Mexico City Government is aware that 100,000 people leave the DF each year due to the increasing costs of land and rents (La Jornada, 01/10/2013), and that “during the real estate boom” 370,000 families left the DF to live in the cheaper neighboring State of Mexico, despite having to commute to the DF every day to work, study, or shop (La Jornada, 07/02/2014).

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An urban policy of (re)densification

Responding to this peripheralization, the local government of the Federal District implemented, between 2000 and 2006, a policy known as Bando 2. The Bando 2 restricted the growth of the city in nine of the 16 Delegations and encouraged popula­tion growth in the four central Delegations.3 It restricted urban development through­out the city and restricted permits for new housing units to the four central Delegations (Benito Juárez, Cuauhtémoc, Miguel Hidalgo, and Venustiano Carranza). This central city area had lost 1.2 million residents between 1970 and 2000. The aim of the Bando 2 was to attract people to the central area and avoid uncontrolled suburban development and the (often informal) urbanization of lands with ecological value (Tamayo, 2007). However, this pragmatic urban policy was extraneous to the existing legal framework (particularly the local byelaws and the Urban Development Programmes, none of which forbade housing construction on urban land in the DF), and did not cover other areas that had also undergone population decline and loss of housing stock (by 2000 eight Delegations had lost population and not just these four).4

The Bando 2 created its own administrative and fiscal instruments to support the construction of housing and social housing by private and public sectors, respectively. These instruments were based on the following tax exemptions or advantages aimed at property buyers or redevelopers:

(1) Tax exemption of up to 100% for property acquisition, and payment for utilities (water and drainage), building permissions, and land-use procedures.

(2) The existing legal obligation for developers to provide parking places for resi­dential projects was lifted.

(3) The establishment of a single office to process different permits that usually are processed in various public offices. These permits include land-use licenses, alignment, property registration numbers, construction licenses, and feasibility estimates relating to introducing water, drainage, roads, soil uses, and service access.

A review of the statistics between 1990 and 2010 shows that, in the four Delegations covered by the policy, there was a population decline of 209,130 and an increase in the number of housing units of 66,489. This apparent contradiction might be explained by the fact that the resident population continued to be expelled by increasing land and housing rents, while new in-movers were made up of younger individuals or families with fewer members and more purchasing power. However, from 2000 to 2010, both population and housing increased in the areas covered by Bando 2 (as Table 1 and Figure 2 show).

During the period the Bando 2 was in operation, in the whole central city area, 33,497 housing units were built. Most of these were constructed by the private sector aimed at middle-income groups and in areas where infrastructure, services, public gardens, and public spaces were already available for newcomers (SEDUVI, 2006).

One immediate consequence of this policy was a large increase in the cost of housing in the inner city. In 2000 the average sale price of a housing unit was seven hundred thousand pesos; by 2008 it had risen to more than two million pesos5 (Benlliure, 2008).

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Table 1. Population and housing in the central city 1990, 2000, and 2010. 1990 2000 2010

Delegation Population Housing units Population Housing units Population Housing units

Benito Juárez 407,811 115,319 360,478 113,741 385,439 141,117 Cuauhtémoc 595,960 159,410 516,255 147,181 531,831 173,804 Miguel Hidalgo 406,868 99,335 352,640 94,475 372,889 120,135 Venustiano Carranza 519,628 117,820 462,806 116,986 430,978 123,317 Total Central City 1,930,267 491,884 1,692,179 472,383 1,721,137 558,373 Federal District 8,235,744 1,798,067 8,605,239 2,103,752 8,851,043 2,132,368

Source: Author’s results based on data from INEGI.

40,000

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Benito-Juárez Cuauhtémoc Miguel Hidalgo Venustiano Carranza

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Benito-Juárez Cuauhtémoc Miguel Hidalgo Venustiano Carranza

Figure 2. Increase–decrease of population and housing in the central city 1990–2010. Source: Author.

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Since then, the new supply of housing has excluded the low-income population. This is within the context of Mexico City, where a “social interest” (subsidized) house or apartment must, according to law, have a maximum purchase price of fifteen times the minimum wage. This equates to an average purchase price of 354,561 pesos (24,000 dollars at 2015 exchange rates), far below market rates. Seventy-five percent of the workers registered with the National Housing Institute for Workers (INFONAVIT) in Mexico City have exercised their right to a housing loan to purchase a unit somewhere in municipalities outside of the DF in the State of Mexico, where land costs are cheaper (Morteo, 2005). The real estate publication Metros Cúbicos (July–August 2013) reported that housing prices in Mexico City had the effect of doubling and tripling housing prices in the neighboring municipalities, except those included in the Bando 2 zone (see Table 2). Bando 2 also opened the way for new real estate developments that increased building densities in the central city. This is discussed in the following section.

The rescue of the historic city center and megaprojects

In the context of multiple urban problems, the Mexico City Government initiated, in conjunction with its social policies (focused only on the poorest population), a series of urban policies aimed at maintaining the “adequate functioning” (in the local governments’ words), of the southwestern areas of the city. It undertook the selective modernization of central urban areas, through megaprojects, reinforcing the insular nature of the urban structure and its fragmentation (Duhau & Giglia, 2008). With the slogans “sustainable urban development”, “compact city”, and the “rescue” of the World Heritage, the urban areas in the south and west of the city were given advantages for privately led redevelopment. The following are some of the most recent and significant examples of these urban policies and megaprojects.

Mitikah progressive city

This is a controversial megaproject by the Ideurban Group and Prudential Real Estate (US and Mexican capital) in the Benito Juárez Delegation, which is conve­niently located and has good transportation facilities. The project is situated on an unused urban plot, a parking lot, and includes the provision of a clinic, a hotel, 500 luxury apartments, a commercial center, cinemas, offices, a heliport, and under­ground parking for more than 2000 cars. It comprises seven 12- to 30-storey buildings, and one 70-storey tower designed by the Argentinean star architect

Table 2. 2013 housing sales prices in Mexico City and the State of Mexico. Mexico City State of Mexico

House value Size (M2) Price* $/M2 Size M2 Price* $/M2

Lowest 62 104,557.38 1,686.41 49 30,169.15 615.70 Average 88 220,756.31 2,508.59 91 101,520.62 1,115.61 Highest 152 389,509.46 2,562.56 176 267,427.54 1,519.47

Source: Own results based on data from Metros Cúbicos, July–August 2013. Note: * US dollars (considering 13 Mexican pesos for each US dollar).

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César Pelli. In 2009 and 2010 the original residents of the adjacent neighborhood, Xoco, received many offers for their properties. Hitherto, zoning in this project area was for mixed housing to a maximum height of six stories. In 2012 the inhabitants demonstrated against the physical impact of the project on their church and houses. Afterward they complained about the discretionary way that land-use regulations had been modified for the project and the impunity of both the real estate company and the civil servants involved in its administration. The officer who approved the environmental statement procedure for the project is a founder, a partner, and was the director of the private company that undertook the environmental impact study for the project,6 an example of endemic—and unpunished—corruption.

The residents of the Xoco neighborhood sued the state to cancel or reduce the scale of the megaproject. According to interviews I conducted in October 2014, between 2009 and 2014 property taxes increased by 500% and the cost of welfare services for the low-income and original residents tripled. These residents feared they would be displaced by the impact of the mega construction. They also faced considerable disadvantage as their efforts to confront the colluding powers of real estate business and the authorities were unsuccessful (see Figures 3). However, in July 2014 a decision by a Mexico City court decided in favor of the Xoco neighbors and stopped—momentarily—construction of the buildings. However, the local gov­ernment acted quickly to defend the “legality” of the construction in the name of job creation and urban competitiveness, and construction resumed.

Figure 3. Mitikah seen from the church, and a protest poster. Photos: Author. Note: The protest banner says: “Urban Development Office (SEDUVI) understand, Xoco neighbourhood is not for sale”. Middle: “I am the mega-destruction”. Bottom: “It builds 181 flats of impunity”.

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The new Polanco

The Polanco neighborhood is known as the home to rich Mexican people, particularly those of Jewish and Lebanese origin. In the 1940s a large industrial area was constructed in the northern part of this district and became obsolete by the 1990s. The derelict land had strategic importance due to its central location in what was previously the edge of the city, and was further attractive because it was within Polanco. The old Chrysler, General Motors, and Vitro factories were demolished between 2004 and 2005, and were subsequently sold under the precepts of the Bando 2. Construction began on several megaprojects with mixed uses (offices, housing, services, and commerce). One of these, Plaza Carso or Slim City, comprised two million square meters and included 430 luxury apartments, two museums, a shopping center, a theater, a hotel, and three blocks of office buildings, occupied by companies owned by Carlos Slim (TELMEX, TELCEL, INBURSA, and CARSO) (Real Estate, Market & Lifestyle, 2014). There are other megaprojects in the area benefitting from international investments: City Towers, Grand Polanco, La Quadra, Parques Polanco, and Polárea.

Recently the residents of adjoining districts have expressed discontent. In 2012 residents from the Irrigación district complained about the effect of the megaproject on traffic and urban services. Furthermore, at the same time as new high-rise buildings are constructed and factories await demolition, a small low-income settlement still exists. Built by the original residents of the area, it is located along a street called Cerrada de Andromáco, at the center of the redevelopment frenzy (see Figure 4). There have been some attempts by investors in the area to eliminate this space as they claim it is a “pocket of poverty” (Delgadillo, 2014). During a visit in November 2014, around

Figure 4. Cerrada de Andromáco Street. Exterior and interior views. Photos: Author.

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five residents prevented me from taking photos of “their” street and houses, and they asked me (with fear and anger) “who is your boss who wants to buy our houses?”.

The local government recently developed a program for the “improvement” of the Cerrada de Andromáco Street. This appears to be a program to make the self-built houses “invisible”. In addition, the cost of water and property taxes has increased. Meanwhile, the residents have expressed their fear of displacement as their houses are surrounded by luxury constructions.

The cyclical7 rehabilitation of the historic center

The political cycle of “recovery” of the historic center began in 1967. By now there have been seven generations of public programs whose actions have taken place mainly in the same area (Delgadillo, 2005). One key policy was passed in 1980, and this is the creation of Mexico City’s Historic Center Zone, which covers 668 street blocks, 9,263 plots of land, and measures 9.1 square kilometers. It is divided into two subareas: the first, called perimeter A, is where most historic buildings are concentrated; the second, called perimeter B, is a transitional zone between the old city and the new one (Delgadillo, 2005). The historic center has the largest concentration of historic monu­ments in the country and is the main central space in the metropolitan area. It is an important commercial center specializing in services and activities that have importance at a regional scale. It is also an accessible area, and this generates a floating population estimated at more than one million people per day. It is a small area with great social, political, and media visibility, and has a strong symbolic significance for Mexicans.

In the context of neoliberal reform at the beginning of the 1990s, the program called Échame una manita! (“Lend me a hand”) (1991–1994) aimed at promoting private sector participation to “save” the heritage of the building stock, add value to the Business District (34 blocks in the historical center), and relocate street vendors to 28 modest shopping centers (plazas comerciales).

The historic center has always been characterized by deep contrasts. At the begin­ning of the twenty-first century the southern and western zones were in a better condition than they were in the 1990s as several buildings had been restored, and the lower floors were used as shops, offices, commercial outlets, banks, and cultural centers for high-income clients (although the higher floors remain underutilized). Tourists visit the zone, it has lost more population than the other central areas, and it is the place where the millionaire Carlos Slim invests most (Delgadillo, 2005). The northern and eastern zones are characterized by the poor condition of their buildings and public spaces: this may reflect the fact that there was no program of urban heritage rehabilita­tion in these areas until 2007. The families here are low-income, and a large amount of informal economic activity occurs in the area in parallel with the formal trading sector.

Socioeconomic differences between residents of the historic center are wide: 52% of the resident population earned less than twice the minimum wage in the year 2000. In 2002 Carlos Slim initiated his project to “recover” the historic center when he pur­chased 63 buildings destined for a variety of activities (Delgadillo, 2005). The area underwent a major process of population loss. Between 1990 and 2010 it lost 36,965 inhabitants and gained 7,083 housing units, to move from 194.544 to 157.579 inhabi­tants and from 48,511 to 56,594 dwellings. Recently, however, in the period 2005 to

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2010, the area modestly increased its population by 5,506 inhabitants (as well as adding a further 14,340 housing units). By the year 2010, the area housed 1.78% of the Federal District’s population and 2.06% of its housing stock (Delgadillo, 2014).

A key change occurred in 2001 when Carlos Slim decided to invest in the “rescue” of this World Heritage preservation district, supported by the local and federal govern­ments. The local government implemented the Historic Center Rescue Program (Programa de Rescate del Centro Histórico 2002–2006). The same territory was targeted for “rescue” as had been a decade before. In the new program, the federal and local governments created a Consultative Board for the Rescue of the Historic Center (Consejo Consultivo para el Rescate del Centro Histórico), where intellectuals and artists had a voice, although it did not include any local residents. The program also estab­lished an Executive Committee, which was made up of three federal cabinet officials, three local government secretaries, and four “representatives” of civil society (one journalist, one historian, a Catholic archbishop, and Carlos Slim). The Mexican mag­nate was President of both the Board and the Committee. The Executive Committee defined public security and the fiscal incentives for the recuperation of the historic center (Delgadillo, 2005).

The renovation of public space in 34 square blocks was financed by the local government, and it also included the construction of Plaza Juárez, which is home to the nation’s Tribunals, the Foreign Relations Secretariat, and a museum. Close by, in the area surrounding the public garden La Alameda, a five-star hotel and a convention center were built. These have drawn the attention of academic specialists who consider that these developments represent the beginning of a scaling-up of urban renovation to include large-scale residential buildings and recreation facilities, attracting foreign companies, the return of high-income groups to the center, and the displacement of lower- and moderate-income groups (Davis, 2005).

Additionally, the former Mayor of New York, who adopted a policy of “zero tolerance” to crime, became an advisor to the Mexico City public security program. According to Davis (2007), the zero-tolerance program in Mexico was more “political flag waving” than an efficient solution to delinquency. In the context of Giuliani’s recommendations, on 5 May 2004 the Mexico City Legislature passed the Civic Culture Law (Ley de Cultura Cívica), which grants powers to the local government to evict people from the streets for engaging in informal and suspicious activities (Delgadillo, 2005).

As previously mentioned, between 2002 and 2004, Carlos Slim purchased 63 buildings8 (Delgadillo, 2005) in the southwest part of the historic center. Here there were no social displacements, because those buildings were uninhabited. The purpose of the purchases was to develop commercial outlets, services, and housing for youth, and also to house some offices of Slim’s telecommunication corporations (see Figure 5).

Until then, all activity deriving from the public programs for the “recuperation” of the historic center were carried out in less than 10% of its total area. However, the Historic Center Recovery Program 2007–2012 extended the territory for the recovery of building heritage to include some neighborhoods in the north and the east. This Program created the Historic Center Authority (2007) and introduced the fourth line of the Metrobus urban transport system, which links the historic center with the international airport. At the same time, the local authority relocated (yet again)

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Figure 5. Historic Center: Buildings bought by Slim. Source: Author.

15,000 street vendors who occupied 87 streets. The vendors took their trade indoors to 36 commercial plazas handed over to them through government programs. This has been described by Walker (2008) as evidence of gentrification, and for Janoschka et al. (2014) it represents symbolic gentrification, preparing the field for private investment.

However, these informal vendors have not been sent to the city outskirts. They are organized in strong quasi-corporations that are linked to political parties. They have resisted being moved out of the historic center and have negotiated relocation within the same area. Whilst his can be considered as a symbolic preparation for private investment, it can also be construed as a type of resistance to gentrification: the street sellers’ organizations are strong enough to resist being sent to the city’s periphery. They may give up working in the street, but not working in the historic center.

During 10 years of “rehabilitating” the historic center, the Historical Center Real Estate company, owned by Carlos Slim, has renovated 620 apartments in 55 buildings (Fundación Carlos Slim, 2011). However, the historic center has many other small investors and housing construction companies that are active in perimeter B, where they can construct new buildings on plots without historic value. Those investors and companies are not interested in rehabilitating existing buildings. Between 1998 and 2001 private investors constructed 10 buildings with 579 housing units in perimeter B. These were on unused plots, or replaced buildings with no heritage value (Delgadillo, 2005). It should be noted that the legal norm that preserves the built heritage acts against capturing the rent gap, as it prevents structural substitution and prevents the large-scale modification of historic buildings.

In the Slim-dominated part of the Historic Center there is a particular street, Regina Street, that has been transformed into a cultural corridor and has become an interesting urban and social laboratory, mainly due to the coexistence of unlikely groups: as close neighbors, the new middle-class residents and consumers share spaces with the old low­income residents. This is not very common in a city as segregated as Mexico City. The street became fashionable in 2002 when several renovation works were carried out in conjunction with its pedestrianization, the creation of a public garden, the relocation of street sellers, new security measures, new cultural activities, and new coffee shops, restaurants, and galleries. (Figures 5, 6). Carlos Slim purchased 19 buildings in this area (six on Regina Street and 13 on adjacent streets), and several of these were renovated and put on the market as housing for new middle-class residents. The

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Figure 6. Regina Street in the 1970s and in 2011. Archive and Photo: Author.

reconstruction program, called Renovation of Popular Housing, had rehabilitated and reconstructed 36 social housing buildings in the same area after the 1985 earthquakes.

Publicity advertising apartments for sale in Regina Street started to appear in 2011. Some of these were social housing units located in historic buildings that were reno­vated after the 1985 earthquakes. At the same time (2011) the real estate website Live in the Center (Vivir en el Centro), published by the Historic Center Trust, advertised 85 properties for rent and sale. Three of these were located in Regina Street. By August 2013 there were 54 advertisements, of which seven were on Regina, with sales prices ranging between 600,000 pesos (60 square meters) and 1,440,000 pesos (70 square meters).9 In October 2014, among other housing on offer, there was a loft in Regina 57 (70 square meters) sold for 2,480,000 pesos.10 These prices are out of reach for the low-income population.

The Population Census registers that between 1990 and 2010 the number of inha­bitants in the Regina neighborhood fell from 8,354 to 5,122 residents and the number of housing units fell from 2,133 to 1,555. However, between 2000 and 2010 the decline slowed down considerably, with losses of 649 residents and 36 housing units.

It remains to be seen how this neighborhood will develop in the future. How long will traditional residents resist the displacement pressures? Whether or not middle­and high-income youth are interested in living in social housing that was rehabili­tated and reconstructed after the 1985 earthquakes, the new bars, restaurants, cafes, and housing are expensive for the old residents. This constitutes a typical form of gentrification, as identified by Jones and Varley (2001) since the 1990s in Latin American historic cores.

Conclusions

Climate change, sustainable development, and economic competitiveness (accompanied by job creation) are public discourses that legitimate private business in Mexico City. For instance, the urban redevelopment policy Bando 2 was allegedly created to halt urban expansion in ecologically sensitive areas and enable low-income groups to access housing. However, it ended up increasing the cost of central land and housing for these

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groups (thereby exacerbating pressure on the sensitive outlying areas), and it enabled the private sector to construct housing for higher-income groups, besides opening the way for recent urban megaprojects. Thus the policy spearheaded displacements due to exclusion, as the majority of the population cannot afford the housing units produced in the central city.

The common denominator of the recent urban megaprojects, despite their different characteristics and dimensions, is the role the local government has played in their development and the pursuit of profit by real estate capital, which regards the city as a money-making machine. Public policy and private investors have made Mexico City significantly more expensive, and have even made it inaccessible for low-income populations, turning it into an insular and even more unequal society. Planning and urban laws have been modified and oriented to enable the maximum exploitation of urban rents.

The classification of gentrification studies in Latin America by Janoschka et al. (2014) is useful provided that the highlighted processes are not considered to be sequential. That is to say, symbolic gentrification is not necessarily the first step toward public policies for gentrification, nor is it a prior stage to market-led gentrification. Their classification is useful if it is considered as porous, and with processes that are juxtaposed. In this sense, I would argue that the historic center of Mexico City represents a type of gentrification that has been copromoted by the state and the market, whose emblematic figure is one single investor who has “recuperated” the World Heritage in the historic center, even if the sprawling real-estate interests of the Mexican magnate are dispersed throughout the metropolis.

Finally, exclusionary displacement seems to be the current and widespread expression of gentrification processes in Mexico City. Indeed, recent private investments facilitated by public policies are made in sparsely populated, uninhabited, and seemingly empty territories, so that no large-scale evictions occur, specific cases notwithstanding: the Mitikah and New Polanco megaprojects, as well as the historic core’s “rescue”, were constructed or undertaken on unused land, in long-depopulated areas and on the sites of obsolete factories. However, as Davidson and Lees (2005) argue, this is also a form of gentrification and a clear example of exclusionary displacement, as the new housing is not accessible to population groups who could have afforded the areas (and neighboring spaces) before the Mitikah and Ciudad Slim redevelopment took place. The issue is not so much one of a disgruntled local population, but the impact of these developments in the future. Overall, the revaluation and gentrification processes occurring in selected urban areas of Mexico City are not positive, as some authorities and local officials try to show or as some scholars assume: these processes expel some, and exclude many, resident people. The great challenge is to shed light upon the quasi-invisible displace­ment and social exclusion of low-income people that public policies and private investments make, under the discourse of ecological and competitive urban development.

Notes

1. These are corporate buildings, residential complexes, retail, and mixed-use megaprojects (housing, trade, and services) (Real Estate, Market & Lifestyle, 2014).

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2. This unemployment rate is low relative to Western standards, reflecting the very low official participation rates in Mexico and the high prevalence of insecure and casual employment. It is the upward trend that is of note. In Mexico, the government recognizes as unemployed those economically active people who have lost their formal job, but not those who have never worked in the formal economy.

3. About the other three Delegations nothing was mentioned. However, those Delegations were used to build social housing by the local government.

4. In addition to the four central Delegations, the following Delegations also underwent population decline: Azcapotzalco, Coyoacán, Iztacalco, and Gustavo Madero.

5. In this period the inflation rate was of 54.23%, while the workers’ income increased by 39%.

6. In the history of Mexico City one can usually find that private investors work as public officials in some administrations, and vice versa. There are fluid relationships between the public and private spheres, always in benefit of the investors. So entrepreneurial urbanism is nothing new in this city.

7. Since 1967 each designed or elected government has “rescued” the historic center. So the last four democratic governments have invested four times in this urban territory.

8. Carlos Slim invested 375.2 million pesos in the purchase of 31 buildings. Information about the costs of the other 32 buildings is not available.

9. Between 48,000 and 115,000 dollars. 10 Around 198,400 US dollars.

Acknowledgment

The author is very grateful to the anonymous reviewers and also to the guest editors for their comments and observations.

Disclosure statement

No potential conflict of interest was reported by the author.

Funding

This research was supported within the 7th European Community Framework Programme [FP7­PEOPLE-PIRSES-GA-2012-318944] by a Marie Curie International Research Staff Exchange Scheme Fellowship, titled “CONTESTED_CITIES: Contested Spatialities of Urban Neoliberalism, Dialogues between Emerging Spaces of Citizenship in Europe and Latin America”.

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