The recent decision by the Supreme Court of Mexico to impose a cap on residential rents in Mexico City has sparked significant debate regarding its impact on housing affordability and investment in the real estate market. The move has been met with concern by some experts, who argue that the cap could exacerbate the existing informal rental market, where an estimated 96% of rental offerings in the city are unregulated. This situation raises questions about the effectiveness of such measures in addressing housing needs for the majority of the population.

Proponents of the rent cap cite the urgent need for more equitable housing solutions, particularly as the demand for affordable housing continues to outpace supply. With expectations that the middle class will grow to encompass over 3.8 million households by 2030 amid an estimated deficit of 9.4 million housing units, critics of the cap warn that simplistic solutions based solely on price regulation may not suffice to meet these demographic challenges.

Additionally, the ongoing challenges include a significant slowdown in the construction of new housing, particularly in the mid-range sector, which limits supply for an increasingly urban population. The interplay between rent controls, informal housing markets, and construction levels points to a complex landscape that policymakers must navigate as they seek to foster both equity and growth in the housing sector.