Building Rights for Funding Housing Reconstruction: Mexico City’s after the 2017 Earthquake

Abstract

On September 19, 2017, one of the most destructive earthquakes in Mexico’s history occurred. Mexico City was the most affected region in the country due to the loss of human life, the destruction of public infrastructure, and the damages and loss to thousands of housing across the whole socioeconomic structure. The magnitude of the disaster exceeded the scarce local public resources available to reconstruct the city. As a result, many homeowners faced the collapse or demolition of the buildings in which they lived. City authorities mobilized building rights as an in-kind public resource to co-fund the reconstruction of many buildings.

This chapter documents the case and explores some foundational questions: How to finance the reconstruction of those homes? Why do practitioners choose to use building rights? What is the institutional design and performance of this tool? What are the results? This research includes a review of documents and interviews with key actors. It shows preliminary but positive results and illustrates the implementation challenges when using additional building rights to finance building reconstruction in developing countries. The Mexican City pioneer experience shows a feasible recovery based on an equal financial alternative for local governments in similar conditions.

This research was partially funded by the Lincoln Institute of Land Policy. The working paper WP21JF1 and Fuente’s Master Thesis offered important inputs for this chapter.