More Americans live and work in Mexico, so what about the 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-described “digital nomad.”

The warm weather and relaxed Covid restrictions played a role in his decision to spend more time there after he first visited in late 2019. He now lives and works in Mexico City during the fall and winter — he calls himself of the “snowbird” — and lives in short-term rental properties. The most enticing factor? It’s less expensive to live there than when he’s in his Chicago condominium.

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

Mexico City has seen an influx of people immigrating to the historic metropolis, especially during the pandemic, when telecommuting allowed working from different places. Currently, 1.6 million Americans live in Mexico, according to the State Department, and Mexico City is the fifth-ranked destination for digital nomads worldwide, according to nomadlist.com.

While foreigners have reaped the benefits of cheaper housing as they pump money into the local economy, some critics say it’s creating greater inequality for local Mexicans who feel drained.

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

Mexico City resident Martin Naranjo drew attention to this issue in a TikTok video, complaining that local taco stands and bodegas are being turned into yoga studios and cafes in some areas. He talked about people having to move further from the city to find affordable rent, food and entertainment as prices have risen in recent years.

He cited profanity-laced signs posted in Mexico City neighborhoods aimed at foreigners who are “new to the area” or work remotely. As he noted, the signs have gone viral on social media.

Morgan said he had seen these signs posted every week in areas where he lived, though his experiences were 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 real estate firm based in Mexico City, has seen an increase in foreigners wanting to live in the capital since the pandemic, with young professionals at the forefront of the movement.

Areas are seeing an economic boost, he said, as new arrivals have high disposable income.

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

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

As for rental prices, they were rising before foreigners flocked to the city, he said.

“I think it’s a false dichotomy, to say, ‘I can’t rent now because there are more foreigners,'” Romero said. He believes the reaction to the newcomers is based on the alarm of locals who see their increased visibility.

“It’s more about income than ethnicity,” he said. He believes that those areas with the highest number of digital nomads are already financially out of reach for most locals.

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 upper-class neighborhoods.

“I know there’s been a lot of migration of people leaving and foreigners coming in and taking their place,” he said. “I know a lot of neighbors who don’t live in the area anymore because of the rent increase … I know people who had mortgages but had to sell them, they couldn’t keep up the payments.”

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

According to González, foreigners are buying property, and not just in higher quality areas.

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

Mexico City Government: Yes to More ‘Nomads’

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

At a news conference, he said the city hasn’t seen a connection between more Airbnb rentals and higher rent prices, adding that most digital nomads choose to stay in expensive neighborhoods like Condesa, Roma and Polanco that already had high rents.

Sheinbaum said her administration was aware of the concerns and would continue to monitor the situation.

One of the most popular ways foreigners 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 believes expats are choking 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 new entrants are now operating commercial businesses that have also prospered.

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

“I say we have to look at the influx of foreigners from two angles: it benefits a lot — full restaurants, high-end shops, coffee shops. This is a positive development,” González said. “On the other hand, the formula is simple: The economic power is completely different from the locals, so they come in and take over.”

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