The Role of Housing Finance in Mexico's Vacancy Crisis

UCLA Ziman Center Working Paper Series

28 Pages Posted: 18 Apr 2016

See all articles by Paavo Monkkonen

Paavo Monkkonen

University of California, Los Angeles (UCLA)

Date Written: April 16, 2014


In the wake of the housing market crash in the United States in the late 2000s, images of abandoned homes on the urban periphery of American cities dominated international media coverage. This narrative of peri-urban over-extension was used by media documenting the housing crisis in Mexico, despite the profound differences in context, namely the role of the government in housing finance. This paper disentangles the issue of Mexican housing vacancy from surface similarities with the US through an examination of vacancy rates within cities in Mexico, and tests of four hypotheses about their determinants using data from the 2010 Census of Population and Housing. Results confirm that violence related to the drug war, international migration, and housing finance are associated with vacancy. However, more housing finance is strongly related to higher vacancy in the central city but not in the urban periphery. In spite of the existence of vacancy in newly built houses, the expansion of credit for new housing in Mexico has been most significant for the role it has played in hollowing out the central city. The paper concludes with a review of policies to address the vacancy crisis in Mexico and a framework of best practices.

Keywords: Housing Vacancy, Housing Finance, Mexico, INFONAVIT

JEL Classification: O18, R00, R31

Suggested Citation

Monkkonen, Paavo, The Role of Housing Finance in Mexico's Vacancy Crisis (April 16, 2014). UCLA Ziman Center Working Paper Series, Available at SSRN: or

Paavo Monkkonen (Contact Author)

University of California, Los Angeles (UCLA) ( email )

405 Hilgard Avenue
Box 951361
Los Angeles, CA 90095
United States

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