In 2022, housing costs reached their highest levels in 17 years. The President of the Center of Economic Studies, Luis Roberto Valero Berrospe, stated that this issue started to worsen in 2019 when the solutions offered back then were not working against the economic reality of the state.

He said that in the 1990s, most Baja Californians had their own homes, since access to mortgage credits was relatively simple due to high wages. After several unsolved economic crises, however, the percentage of families who pay rent has grown “without any real policies to revert this situation”.

He highlighted that demand figures confirm this as, between 2012 and 2022, they dropped by 36% while credits at the National Institute of Housing Funds for Workers (INFONAVIT) “followed the same trend”. In 2022, the lowest numbers of financing in 17 years occurred with 19,270 formalized credits, 28% less than in 2021.

In addition, the specialist highlighted, 67% of requested credits were to improve housing, an area that, between 2014 and 2022, increased by 170%, while the purchase of housing contracted by 70% during this same time period. These improvements, he said, are related to expansions to provide recently married children with spaces, as they are unable to buy homes or have to deal with very high rent prices with low wages.

Luis Roberto Valero Berrospe highlighted that inflation also reached housing prices in 2022, as it reached its highest level in 17 years (12%), which meant there was a close well above general inflation of 8.72% in the state. This situation complicated even more the access of Baja Californians to buy their own homes.

The President of the Center of Economic Studies pointed out that the average home price of more than one and half million pesos increased by 148% in the last seven years; compared to 2021, the increase was 47%, while wage poverty reached its highest historic level in the formal sector with 509,820 jobs with a maximum wage of 2 minimum wages. This number represents half of the working force, “which confirms that growth and development are moving in different ways.”

He claimed that low wages have consequences regarding housing payments and INFONAVIT closed 2022 with the highest numbers of overdue portfolios. By credit numbers, it reached 37,718, 91% more than in 2018, and 2.1% compared to 2021. By amount, the number increased to 13,650 million pesos, 109% more than 2018 and 5.8% more than in 2021. “Obviously, people don’t stop paying just because they feel like it and, in this case, we cannot just blame the pandemic,” he said.

Valero Berrospe stated that it is true that there is cheap housing in Baja California, but long-term it ends up being more expensive because they are located far away from work centers and the costs of moving in hours is very high. He explained that the Bank of Interamerican Development pointed out that since two decades ago Mexicali and Tijuana “show some of the most atrocious examples of chaotic urbanization”, to which one can add the dismal traffic engineering. Urban traffic jams have cost Tijuana more than 2,700 billion pesos, the fifth highest number in the country, according to IMCO.

Besides, transportation costs have gone up and there they are an abysmal service that reflects on more than 1,000 yearly hours wasted in moving from place to place and private vehicles being driven; in addition, there are also food costs, which means workers are not able to go back home to eat. The final result is that they abandon the houses they were assigned to.

He stated that four out of ten workers are informal and that 50% of formal workers earn a maximum of 2 minimum wages. In addition, buying a new home costs a lot because it needs furniture: closets, kitchens, bathrooms, floors, etc. This is why he recommended that the state creates urban reordering programs, decentralizes job offers with company relocations, and improves road infrastructure, among other issues that contribute to the current chaos.

“People’s quality of life is not fixed with handouts and incomplete housing programs as it is being done recently,” he concluded.