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A new approach to urban transport and housing in Mexico

A residential area of Mexico City

Mexico’s urban areas generate 90% of the country’s GDP and house four-fifths of the population. In the COVID-19 pandemic, they have also been the hardest hit.  

For many on low incomes in Mexico’s cities, good quality housing in wellconnected neighbourhoods was already out of reach before the crisis, with many living in inadequate housing on the outskirts of sprawling cities with poor transport links.  

The consequences of poor urban mobility such as air pollution and congestion cost an estimated 3–5% of the country’s GDP each year. 

Now the pandemic has highlighted the vital importance of improving Mexico’s urban housing and transport, as people urgently need safe, functional homes and good access to services and jobs. 

Although urban housing and transport have traditionally been siloed, the Coalition’s new policy paper, Compact, connected, clean and inclusive cities in Mexico: An agenda for national housing and transport policy reform, tackles the issues together. 

Urgent need for policy reform 

Despite recent investments in urban transport and housing by Mexico’s government, the current policy approach is not working, as the paper’s co-author and LSE Cities Policy Fellow Catarina Heeckt explained 

“The national government’s urban housing subsidies have typically gone towards low-quality housing developments built on cheap land on the outskirts of cities,” Catarina said. “What’s more, less than 10% of federal transport funding is spent on public and active transport, even though these modes account for more than half of all trips.” 

As a result, poorer residents living on the edge of sprawling cities are forced to rely on crowded and unreliable minibus services – or walking long distances – to access jobs, education and healthcare.  

“COVID-19 has made these inequalities worse,” Catarina added. “Crowded low-income neighbourhoods have the highest infection rates, with many living in cramped housing without access to water and sanitation. 

Many on low-incomes can’t work from home and don’t own a car. Women have particularly suffered, as they typically shoulder the burden of caring responsibilities and are less likely to drive.” 

An opportunity for change 

COVID-19 recovery efforts provide a vital opportunity to address these problems.  

Oscar Huerta Melchor, co-author of the paper and OECD Policy Advisor explained: “The policy responses and recovery packages adopted in the coming months could shape Mexican cities’ economies, social fabric and environmental impact for decades to come.” 

He added, Budgets may be tight, but there are a range of practical solutions that Mexico’s government could adopt right now to improve urban areas. As our paper shows, these reforms have enormous potential to impact on equality, sustainability and economic growth.” 

The paper recommends policies that Mexico’s national government could adopt to boost the country’s COVID-19 recovery and protect its cities into the future, including: 

  • Adopt a national urban policy that includes clearly defined roles and encourages coordination between different sectors (housing, transport and land use) and levels of government. 
  • Improve the quality of existing housing and surrounding public space, rather than focusing on new builds. 
  • Ensure affordable housing options in central urban areas with good transport for those on low-incomes, helping to build inclusive cities. 
  • Increase the proportion of federal funding spent on public and active travel rather than car-based mobility by investing in dedicated bus lanes, wider sidewalks and protected bike lanes. 
  • Support city governments, particularly those that may lack the resources and capacity, to develop comprehensive urban mobility strategies that meet the needs of their residents.

 A path to a more resilient economy 

The climate emergency and the COVID-19 pandemic both require urgent actions by the Mexican government that should not be seen as mutually exclusive. There is overwhelming evidence that policies to curb dangerous climate change also benefit human health, increase inclusive urban growth, and contribute to a more resilient economy. 

Oscar concludes, “The potential benefits of our proposed policies to Mexico’s economy are significant. 

Not only will these reforms increase productivity and help people access jobs, they will also improve health and wellbeing through tackling obesity and air pollution. At the same time, by preserving green space and reducing greenhouse gas emissions they’ll bring environmental benefits too.” 

The paper seeks to support Mexico in driving an overarching national vision for sustainable cities. By realigning investments and focusing key institutions on a shared agenda, the reforms could put Mexico on a path to more sustainable, inclusive future 

Read the full paper.


Research programme:Policy