I just read about the rent cap in Mexico City, and honestly, I think the Supreme Court has good intentions but is choosing the wrong tool to solve the problem. We all know that housing in Mexico City is practically inaccessible. Prices are sky-high, and young people just starting to work simply cannot afford to buy. Rents are also no joke—they have skyrocketed and are eating up the budgets of any family.

The measure they just approved aims to limit rent increases to inflation. Sounds good in theory, right? But here’s the problem: if investors know they won’t be able to raise rents in real terms in the future, why would they build more housing to rent out? Profitability drops, projects slow down, and there ends up being less supply. And when supply decreases, guess what happens to prices... they go up even more.

What worries me is that this could create a counterproductive effect. Landlords will set higher initial rents from the start to compensate for that future restriction. So, those who are already renting today benefit, but those looking for housing in a few years will face higher prices. This especially affects young people, who rely most on the rental market.

Additionally, if real incomes are limited, property owners will invest less in maintenance and upgrades. Historically, rent controls have led to deterioration of the housing stock. Mexico has gone through this before, and it didn’t work. The United States also has documented cases where controls benefited current tenants but reduced overall supply and made access more expensive for new entrants.

The real solution lies in increasing the housing supply, especially social housing. We need to facilitate vertical construction in well-connected areas, simplify procedures, review urban regulations that limit density. It’s also crucial to regularize the existing housing stock. Cities with more affordable housing are precisely those that allow more construction, not those that control prices without letting supply adapt.

I understand the legitimate concern about accessibility, but if we choose the wrong instruments, we risk making the situation worse instead of better. The rent cap may seem like a quick fix, but in the medium term, it will probably end up making housing even more expensive and closing doors—especially for those who need it most.