Mexico City suburb enjoys major housing boom

TECAMAC, Mexico — Outside Melesio Rivero’s City Hall office, workmen shouldering bags of cement squeeze

by well-dressed developers waiting for building permits. Dust and the rap of hammers filter through a building under sudden expansion.

The planning maps spread out on Mr. Rivero’s desk show why. In the past two decades, Tecamac has grown from a scattering of farm towns into a Pittsburgh-size city of 350,000.

Tecamac is also a showplace for the explosion in large-scale housing construction since President Vicente Fox took office in December 2000 — a result of loan programs that take advantage of interest rates lowered by years of fiscal austerity.

Most people in Mexico City, 20 miles to the south, couldn’t find Tecamac on a map. But by 2020, Mr. Rivero said, the capital’s urban sprawl will turn Tecamac into a suburb of 1 million people.

“This is the natural point for growth. That’s the tendency. It’s irreversible,” said Mr. Rivero, a Tecamac native who is deputy director for planning.

On the southern edge of Tecamac, the Sadasi development company is building Los Heroes, a middle-class neighborhood with broad streets lined with 30,000 identical two-story attached houses of 670 square feet each.

Within a few years, Mr. Rivero said, the area will have 100,000 homes.

Many Mexicans are disappointed with Mr. Fox’s achievements since he became president in 2000 as an outsider promising a virtual revolution after 71 years of single-party rule.

But the housing boom stands out as a clear accomplishment. Mr. Fox boasts that the main federal housing lender, Infonavit, will have made 2 million loans during his administration, surpassing the total of its prior 28-year history.

The Fox government has granted 1.6 million housing credits through its first four years and hopes to reach 750,000 credits per year by the end of his term in 2006.

That would accommodate population growth and start to erase a 4 million-unit backlog of substandard or overcrowded housing, said Carlos Gutierrez, head of the government’s National Commission for the Promotion of Housing.

The loans, grants and subsidies come in a growing array of programs, some of which allow people who have earned points for years of work to avoid down payments altogether.

By lending would-be homeowners the money to buy their own homes, rather than doing the building itself, the government has encouraged “a very strong, very solid private market,” Mr. Gutierrez said.

The industry has been growing by up to 20 percent a year, and Mr. Fox said overall housing investment in 2004 was $11.5 billion.

Mexico’s private banks also are starting to creep back into the housing market that they abandoned after a credit crisis sent some interest rates up past 100 percent a year in 1995.