Upcoming Urban Development Projects in Mexico

Published on January 21, 2026 and written by Cyril Jarnias

In Mexico, the urban issue is no longer just a matter of land use planning: it has become a central lever for social, climate, and economic policy. Affordable housing, transportation renovation, major railway corridors, linear parks, mixed-use neighborhoods, smart cities… a new generation of projects is attempting to correct two decades of sprawl, speculation, and social fragmentation. Behind these announcements lies a single challenge: transforming an urban model that has produced millions of distant housing units, saturated infrastructure, and increasing pressure on water, air, and land.

Good to know:

Housing demand is estimated at around 8 million units, and nearly one in four homes is considered inadequate. Future projects intersect housing programs, new mobility infrastructure, public space initiatives, and “smart city” strategies.

A national shift toward social housing and densification

For years, federal policy supported the massive production of housing developments on the outskirts, often without services or transportation. The result is well-known: nearly 650,000 abandoned or never-occupied houses, millions of residents forced into long and expensive commutes, and a surge in car-related emissions. The new cycle of urban development projects seeks to counter this model.

The Housing for Well-being Program: 1.1 million new homes

At the heart of this reorientation is the Programa de Vivienda para el Bienestar (Housing for Well-being Program), which sets a goal of 1.1 million new homes over the 2024‑2030 six-year term (an increase from the initial target of one million), accompanied by more than 1.5 million improvements to existing homes. The intention is explicit: to increase the supply of affordable housing, given that for low-income households, housing can consume up to 60% of gross income.

This program is organized around two major public housing operators, with a clear division of target populations.

Infonavit, the country’s largest housing credit institution and the third largest in the world, has seen its target raised by 100,000 units to reach 600,000 homes. These 60 m² homes are designed to be safe, efficient, comfortable, and well-served: access to basic services, green spaces, sports and social facilities, and, crucially, proximity to employment zones. This represents a break from the “bedroom communities” built dozens of kilometers from urban centers.

500000

Conavi aims to build 500,000 social housing units, primarily targeting the elderly, single-parent families, people with disabilities, indigenous populations, and youth.

The projected unit costs for these homes range between 700,000 and 1.2 million pesos, with financing in the form of zero- or low-interest loans, repayable over 15 to 20 years. Income ceilings for accessing zero-interest loans are set at approximately twice the minimum wage, around 17,000 pesos per month, in order to reach the most precarious workers who have been largely excluded from mortgage credit until now.

Housing, employment, and territorial planning

The program is also conceived as an economic driver. For the launch year alone, the construction of 200,000 homes is expected to generate 600,000 jobs. During a specific phase announced for 52,345 homes distributed across 25 states, projections indicate 235,000 direct jobs and 353,000 indirect jobs.

Beyond the numbers, the program’s geography is strategic. Construction sites are announced in 25 states, from north to south – Baja California, Sonora, Oaxaca, Quintana Roo, Veracruz, as well as Zacatecas and Tamaulipas – with a national land reserve of 2,260 hectares across 322 sites. For 2024, 125,000 homes are planned on these reserves, with, on 93 sites representing 400 hectares, the decision to allocate 20% of the land for affordable rental housing for youth. This is a significant change in a country where only 16% of the housing stock is rental.

A response to past excesses: from illegitimate debt to urban proximity

This new program also comes as a form of reparation. Before 2018, more than 4 million mortgage loans were deemed “unpayable.” Public Housing Institutes, widely criticized for corruption, produced developments without services, far from urban centers, sometimes uninhabitable without a car. The current government has frozen repayment on 2 million Infonavit loans and has already granted benefits (rate reductions, lower monthly payments, or balance write-offs) to 574,000 borrowers, with an additional 1.426 million people slated to receive other forms of support.

Note:

The reform authorizes the purchase of already-serviced land to build social housing anchored within accessible urban fabrics. The new criteria require a 30-minute walking, 20-minute cycling, or 45-minute public transport proximity to essential services, aiming to combat urban sprawl.

Affordable housing as urban policy: Mexico City and its rental strategy

While federal programs provide the framework, it is in the major metropolises that the concrete application of the new urban model is playing out. Mexico City, a city of nearly 9 million inhabitants (22 million in the metropolitan area), is both the main laboratory and the greatest challenge.

A market under extreme pressure

Data compiled by platforms like Propiedades.com or firms like 4S Real Estate paints an unequivocal picture: soaring rental values, rapid capitalization in certain neighborhoods, a surge of gentrification in central areas.

Across Mexico City’s 16 alcaldías (boroughs), all have seen their rental values increase over the past five years, with spectacular rises: +22% in Iztacalco and Cuajimalpa, +21% in Xochimilco, +19% in Iztapalapa, +15% in Azcapotzalco, Venustiano Carranza, and Magdalena Contreras. Some neighborhoods like Del Valle Norte, Narvarte, or Roma Norte have seen capital gains of 28 to 31%.

Over the same period, the average home price in the metropolitan area increased by about 36%. In this context, the OECD notes that more than half of all mortgage credit is captured by the richest 20%, while nearly a quarter of the housing stock is considered substandard and overcrowding is among the highest in the club of developed countries.

Public rental housing program in Mexico City: 20,000 homes in six years

Faced with a shortage of over 50,000 rental units and a largely unregulated private market (only 16% of the stock is rented), the city has launched a public rental housing program with a target of 20,000 affordable units over the six-year term.

Example:

The program’s first phase, with over 600 million pesos in public investment, plans the construction of 1,000 homes in the launch year. The first deliveries are expected between late 2025 and early 2026. Projects are concentrated in central city areas particularly affected by gentrification and tourist pressure, such as Cuauhtémoc, Miguel Hidalgo, Azcapotzalco, Doctores, as well as Buenos Aires, Tacuba, and El Rosario.

A first building of 120 apartments of 60 m², constructed on the former site of the Yale factory facing Plaza Tlaxcoaque in the historic center, serves as a showcase. Four additional projects underway in Doctores, Buenos Aires, Tacuba, and El Rosario are set to deliver more than 550 additional homes. This is in addition to the rehabilitation of 300 homes damaged by the 2017 earthquakes.

Tip:

The architecture of these complexes marks a break from the isolated tower model by integrating **Integrated Care Systems**. These systems include daycare centers, community kitchens, collective dining facilities, laundromats, and multipurpose spaces. They are designed to lighten the domestic workload, particularly for women, and to strengthen neighborhood life.

In social terms, access is targeted: households without property, families earning up to three minimum wages, youth, single mothers, the elderly, informal workers, displaced families. Rents for the most modest households are capped between 2,000 and 3,000 pesos, levels compatible with one or two minimum wages, and will not exceed 30% of income for those with higher resources.

Bando 1: regulating rents and refocusing social housing

The rental strategy fits into a broader framework called “Bando 1, for a livable and affordable city with identity and local roots”, which revisits and corrects the experience of Bando 2 from the early 2000s (densification of central boroughs under the López Obrador era, transforming former industrial land into mixed-use neighborhoods, like Nuevo Polanco with its over 8,000 apartments).

Housing Policy – Bando 1, Article 14

This article proposes a set of concrete measures to regulate the rental market, protect tenants, and reorient social housing policy.

Capping Rent Increases

Limiting rent increases to the previous year’s inflation rate.

Reasonable Rent Index

Creating a specific index to regulate rents in high-pressure areas.

Tenant Rights Mediator

Establishing a mediator dedicated to defending and informing tenants.

Fair Rent Law

A bill aimed at ensuring fair and reasonable rents.

Social Housing in Central Neighborhoods

Reorienting social housing policy toward city centers rather than outskirts.

The framework also includes expanding the public rental program, tax incentives for developers agreeing to rent at moderate prices, a Land and Housing Observatory, and a Community Roots program to support long-term residents facing speculation dynamics.

Implicitly, this plan acknowledges the relative failure of a previous initiative: a scheme launched in 2019 to incentivize private developers to build 7,500 to 10,000 affordable homes in gentrifying areas through tax exemptions and fast-tracked permits. By the end of 2024, only 253 affordable homes had been approved in three towers. Hence the shift toward a much more active public operator.

Rail, metros, cable cars: the city through transportation

Mexico’s urban transformation is not solely about housing. It also relies on a profound reconfiguration of mobility infrastructure, key to reducing inequalities in access to opportunities, greenhouse gas emissions, and car dependency.

A national rail plan: from Mexico City to Nogales and Nuevo Laredo

The previous administration had put rail back at the center of the game with the Tren Maya and the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT). The new presidency, via its “100 Steps for Transformation” program, confirms and amplifies this strategy with three new major passenger rail corridors:

– a train connecting Mexico City, Felipe Ángeles Airport (AIFA), and Pachuca;

– a Mexico City – San Luis Potosí – Monterrey – Nuevo Laredo axis (toward the US border);

– a Mexico City – Querétaro – Guadalajara – Tepic – Mazatlán – Nogales line (toward the north Pacific coast).

In total, over 3,000 km of new lines are envisioned, in four phases, to reconnect entire metropolises and regions to passenger rail. The Mexico City–Querétaro train, declared a national priority, alone is expected to connect 22 municipalities and directly benefit more than 30,000 daily commuters, representing an influence population of 5.6 million inhabitants.

The government also aims to double the volume of freight transported by rail over long distances (over 400 km), for example by integrating freight operations on the Tren Maya, completing the rail link between the Dos Bocas refinery and the CIIT network, or the famous Line K between Ixtepec and Ciudad Hidalgo, on the border with Guatemala.

Mexico City: metro modernization and the “El Insurgente” commuter rail

At the metropolitan level, one of the largest investment packages concerns the Mexico City Metro, operated by the Sistema de Transporte Colectivo (STC). The 2025 budget includes a historic allocation of 23 billion pesos for modernizing lines 1, 3, 9, and A, which will bring a new control center, 5,000 surveillance cameras, renovation of escalators, elevators, station facades, as well as major work on maintenance workshops (Pantitlán, El Rosario) and control systems.

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The transportation network carries nearly 6 million passengers per day.

Simultaneously, the Mexico City–Toluca commuter train, named “El Insurgente,” is finalizing its static and dynamic tests on the Santa Fe–Observatorio section. Once fully open (57.7 km, seven stations), it is expected to reduce travel time between Toluca and the capital from 2h30 to about 40 minutes, with estimated ridership of over 100,000 users per day. Four stations on the State of Mexico side are already operational (Zinacantepec, Toluca Centro, Metepec, Lerma) and three strategic stations are set to open on the capital side: Santa Fe, Vasco de Quiroga (connecting to the future Cablebús 3), and Observatorio, which will become a giant multimodal hub (metro line 1, line 12 extension, bus terminal, CETRAM).

Monterrey: the monorail revolution

In the north, Monterrey is heavily investing in its Metrorrey system with lines 4 and 6, elevated monorails under construction for commissioning before the 2026 World Cup. Line 6 is shaping up to be a structuring axis: 17.6 km, 18 stations, connecting Monterrey to Guadalupe, San Nicolás de los Garza, and Apodaca, with transfers to lines 1, 3, 4, and 5. The goal is to exceed 120,000 daily users.

Good to know:

The construction contract was awarded to the international consortium Mota‑Engil de México / CRRC Hong Kong, illustrating the growing importance of such partnerships in Mexican urban transportation. Local authorities envision a future extension of the line to the international airport, making it a central axis of metropolitan mobility.

Cable, trolleybus, tram: increasingly multimodal mobility

Beyond heavy rail and metro, a series of guided transport projects complement the urban arsenal: additional Cablebús lines in Mexico City (lines 4, 5, and 6 are in execution or bidding phases), the Ixtapaluca trolleybus project, expansion of Bus Rapid Transit (BRT) networks in Monterrey and Guadalajara, trams, and CETRAM (multimodal transfer stations) like the one at Observatorio.

These projects are supported by federal instruments like the Federal Program for Support to Mass Transportation (PROTRAM), financed by the National Infrastructure Fund (FONADIN), and by the National Public Works Bank (Banobras), which finances and structures projects. The legislative context is also favorable since the inscription of the human right to mobility in the Constitution (2020) and the adoption of the General Law on Mobility and Road Safety (2022), which creates a National Mobility System.

Public spaces, parks, and nature in the city: the city as resilience infrastructure

Mexico’s urban transformation is not just about concrete and rails. It is also embodied in a multitude of public space projects, linear parks, urban forests, and micro-interventions in popular neighborhoods, with a dual objective: improving immediate quality of life and strengthening climate resilience.

From La Viga to Chapultepec: the new generation of urban parks

The Parque Lineal La Viga, developed in 2015 in eastern Mexico City, is emblematic of this approach. On 16,500 m², this linear park was designed as a tool to combat flooding, water shortages, and heat islands. Up to 60% of its surface functions as a rainwater catchment system, which is then treated for potable or domestic use. Nearly 500 residents participated in its design, and approximately 4.6 million people can access it within 30 minutes by public transport.

The project aims to increase green space per inhabitant from 5 to 10 m² in the area, by adding about a hundred trees and increasing vegetated surfaces by 22%. It is precisely this kind of prototype that convinced the City to finance a park twice as large in Iztapalapa, one of the capital’s densest and most vulnerable territories.

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Annual number of visitors hosted by the Bosque de Chapultepec, a 686-hectare park undergoing revitalization.

Small parks, big effects: from La Campana to neighborhood pockets

In popular neighborhoods, often absent from major master plans, transformation sometimes takes a much more discreet but equally structuring form. In La Campana, a precarious settlement in the Monterrey metropolitan area perched on slopes overlooking the city, the NGO Barrio Esperanza has been developing “pocket parks” since 2015 by reclaiming vacant lots and abandoned land into playgrounds, neighborhood squares, and small gardens, using salvaged or donated furniture and play equipment. These spaces, modest in size, nonetheless reconfigure daily life: places for meetings, sports, and socializing, in a context marked by violence and a lack of amenities.

The municipality relies on the MexPOS tool, developed from the analysis of 944 sites, to guide its interventions. The results highlight a strong contrast between central spaces, often better maintained and perceived as safer, and the peripheries, more neglected and vulnerable.

Mexico City Public Space Authority

Federal public space programs: 1,300 projects in marginalized areas

At the federal level, a Public Space Program managed by the Ministry of Agrarian, Territorial and Urban Development (SEDATU) has completed nearly 1,300 public spaces in just over two years, primarily in the country’s most marginalized areas. These include parks, plazas, libraries, sports or cultural facilities, often coupled with land regularization projects or consolidation of self-built neighborhoods. The goal is to provide settlements lacking water, drainage, or roads with a first layer of social infrastructure, breaking with the idea that popular peripheries only deserve minimal interventions.

Smart cities and digital: Mexican cities in the age of data

Alongside physical construction sites, another level of transformation is unfolding, more discreet but just as decisive: the digitalization of the city, driven by “smart city” strategies in Mexico City, Guadalajara, Monterrey, Querétaro, Puebla, Tequila, or Cancún.

Mexico City, a connected but unequal capital

Mexico City concentrates about 31% of the country’s foreign direct investment, has a Public Innovation Agency that reduced the number of administrative procedures from 2,100 to 530, and manages a mobile app used by over 5 million people. The city also offers free Wi‑Fi through more than 31,000 access points, has deployed over 15,000 security cameras under the “Ciudad Segura” program, and operates a Risk Atlas with 22 information modules and 1,862 geographical entities, consulted more than 75 million times since 2019.

In terms of mobility, it combines over 316 km of bike lanes, a bike-sharing system (Ecobici), and a galaxy of transport modes (metro, Metrobus, trolleybus, light rail, Cablebús). INEGI data indicates that about 80% of the 130 million daily trips in Mexico are made by public transport.

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More than half of the capital’s population lives in income poverty.

Guadalajara, Monterrey, Querétaro, Puebla: thematic laboratories

In Guadalajara, the Ciudad Creativa Digital (Digital Creative City) seeks to combine audiovisual industry, information technology, and compact urbanism with smart electrical grids and adaptive public lighting. The city is also testing real-time traffic light systems and open data platforms for urban planning.

In Monterrey, projects focus on smart water management (IoT sensors on networks to reduce leaks and optimize distribution) and AI applied to optimizing public transport. The city promotes green buildings through regulatory and tax incentives, in a region subject to extreme water stress and record heatwaves.

Good to know:

Querétaro is considered Mexico’s first smart city. This status is embodied notably in the Ciudad Maderas project (municipality of El Marqués), an integrated ecosystem mixing technology companies, educational institutions, commerce, housing, and a 20-hectare nature reserve. The city also relies on the QuerétaroCiudadDigital app to streamline public services. Furthermore, the region is a major hub for data centers, hosting about 65% of national capacity.

In Puebla, the BarrioSmart project and the pilot neighborhood of Atlixco focus on connectivity (free Wi‑Fi), video surveillance for bike lanes, smart lighting, and connected management of waste and public transport.

Cancún and the “Smart Forest City”: green utopia or preview?

In the Cancún region, the Smart Forest City Cancun masterplan, led by the firm Stefano Boeri Architetti, proposes a new city surrounded by canals, conceived as a metropolis self-sufficient in energy and resources, with 100% electric and autonomous mobility within its perimeter. Cars would be left on the periphery, and omnipresent vegetation would serve as a carbon storage infrastructure. Even though this type of project sparks debate and is not yet realized, it reveals an aspiration to think of the Mexican city as a living ecosystem rather than a mere accumulation of buildings.

Funding, partnerships, and budgetary tensions

Behind the avalanche of projects – housing, rail, parks, data centers, mixed-use neighborhoods – lies the crucial question of funding. Mexico has a robust institutional framework for public-private partnerships (PPP) since 2012, sectoral laws for roads, ports, airports, railways, and a range of funders: federal budget, development banks, National Infrastructure Fund (FONADIN), commercial banks, capital markets, private investors, and financial vehicles like FIBRAs (listed real estate investment trusts).

Plan Mexico / Mexico 2030: the grand narrative of investment

Introduced in 2025, Plan Mexico (or “Plan Mexico 2030”) structures an investment vision on the order of 277 billion dollars, with specific objectives: raising the investment rate to 28% of GDP, attracting 100 billion dollars in FDI annually, developing 5,645 km of passenger rail lines (for 1.24 trillion pesos, meaning millions of jobs), modernizing nearly 2,000 km of roads, allocating 20 billion pesos to hydraulic infrastructure, and reaching 54% “clean” energy by 2030.

Note:

This plan combines fiscal incentives (accelerated depreciation, deductions for training and innovation, benefits for SMEs) and regulatory instruments (Relocation Decree, Development Poles Decree, updated technical standards). It also introduces a Digital Investment Window aimed at halving permit approval times.

Investment deficits and trade-offs

Despite this assertive discourse, recent figures from the Secretaría de Hacienda y Crédito Público (Ministry of Finance and Public Credit) show a contraction in public works investment, which fell to 509.8 billion pesos between January and August 2025, a drop of 33.7% in real terms. Investment in water infrastructure was even reduced by 75% over the same period compared to 2024. The debt reduction plan pulled public investment to about 2.3% of GDP in 2025, and even though the 2026 target aims to rise to 2.5%, some economists note that the country risks spending more on debt interest than on infrastructure.

2670000000000

Banobras estimates this amount in pesos is needed to close Mexico’s infrastructure deficits.

What future for Mexican cities?

The upcoming urban development projects in Mexico outline a contrasting landscape, both promising and deeply conflictual.

On one side, a massive effort to reorient housing production toward densification, accessibility, and social justice, with over a million public homes, targeted programs for poor regions like the eastern State of Mexico, land regularization, the delivery of 1 million property titles, and the improvement of 450,000 to 1.55 million existing homes. On the other, a structural demand for 8 million homes, an underdeveloped rental market, millions of households plunged into multidimensional poverty, and skyrocketing rents in metropolises.

Good to know:

The mobility strategy relies on reconstructing major rail axes (Tren Maya, CIIT, Mexico City–Querétaro, etc.), modernizing metros, and developing cable cars and BRT, within a legal framework recognizing the right to mobility. However, these projects must contend with strong environmental constraints: seismic risks, flooding, aquifer depletion, heat islands, and significant impacts on natural environments and local communities.

The urban planning of public spaces and parks – from La Viga to Chapultepec, from Barrio Esperanza’s pocket parks to major federal programs – shows that it is possible to reconcile climate adaptation, spatial justice, and citizen participation. Here again, the challenge will be to maintain policy continuity beyond six-year political cycles, especially as many studies highlight a chronic lack of continuity between administrations.

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This is the percentage of the public IT budget devoted to cybersecurity, highlighting a vulnerability in smart city development.

Ultimately, Mexico’s upcoming urban development projects are not just a list of construction sites. They constitute a full-scale test: that of a highly urbanized country – over 80% of the population lives in cities – to shift from a model of horizontal, speculative, and unequal expansion to a compact, connected, green, and inclusive model. The plans are there, so are the figures. What remains to be seen is whether, on the ground, homes will truly be well-located, trains will be on time, rents will be effectively regulated, and parks will be maintained over the long term. It is on this test of facts that the credibility of this new Mexican urban era will hinge.

Cyril Jarnias

Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.

On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.

Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.

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