The potential benefits of Claudia Sheinbaum’s government’s housing program, which seeks to create one million homes, are very relevant, but its successful execution faces significant challenges, according to an analysis by Moody’s Local Mexico.
Among the challenges is the creation from scratch of a new state company that has the material and human resources adequately trained to successfully execute a project of that magnitude.
Another is to develop efficient and transparent processes to ensure an effective and low-cost operation, including the acquisition of land, the purchase of materials and the adoption of modern construction methods that contribute to cost reduction.
Likewise, the firm considered it essential to establish a clear and fair mechanism for the allocation of homes.
Read: An Infonavit builder does not solve the low housing affordability: BBVA México
He indicated that the Sheinbaum government must design a self-sustaining funding scheme for the project, so that as loan payments are collected, new homes can be built, maintain a permanent inventory and provide additional financing, ensuring the transexennial continuity of the program.
He explained that the strategy for land acquisition is key to the success of the housing program, since one of the main challenges lies in the high cost of land in urban areas with access to essential services.
He specified that although the government initially plans to use state and federal land reserves, it must also develop a mechanism for the acquisition of land at reasonable prices, thus facilitating the execution of the project.
Warns of additional pressure on land prices
He said it is important to consider that the housing program could generate additional pressure on land prices due to the government’s need to acquire large areas, which would position the administration as a significant competitor in the search and acquisition of suitable land. for construction.
On the other hand, the plan could generate a considerable increase in the supply of new housing, exerting downward pressure on real estate prices, mainly in those that are within the same range as the houses built under the program. that is, between 700,000 and one million 100,000 pesos.
Read: Infonavit is not capable of creating housing: construction industry
He added that there is still not enough information to evaluate the impact that the program will have on private developers, but he sees the possibility that opportunities will arise if the government construction company chooses to collaborate with them on real estate projects.
“Given its magnitude (of the program), we consider that companies that have resources and experience in the construction of large projects, such as Javer, Vinte, Ara, Cadu or Ruba, could benefit from having a participation in the construction of the developments. real estate,” he said.
He pointed out that a successful execution of the program would make it possible to reduce the strong backlog of houses in Mexico, which according to Inegi figures from 2020, implies a deficit of 8.2 million homes, while according to the National Housing Commission, two years ago 8.9 million of homes had a housing gap, that is, precarious materials and poor access to basic services.
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