Americans are flocking to Mexico City where rent is cheaper and life is more laid-back—for locals, it’s complicated

The Covid-19 pandemic and the rise of the digital nomad sent thousands of Americans in search of a better lifestyle. Many of them landed in Mexico City.

Mexico’s capital city, Ciudad de México or CDMX, is the largest city in North America, with a greater area population of nearly 22 million people.

Its population grew by 3%, or about 600,000 people, between 2019 and 2023, according to The World Population Review. During that time, from 2019 to 2022, the number of Americans who applied for or renewed residency visas surged by about 70%, jumping from about 17,800 to over 30,000, according to statistics from Mexico’s Migration Policy Unit.

Because many digital nomads enter Mexico on tourist visas, which allow them to stay in the country for up to six months, it’s nearly impossible to know how many Americans have overstayed those visas and are living and working there full time.

CNBC Make It spoke with several Americans living in Mexico City who told us the area is cheaper, offers a more laid-back lifestyle, and is rich in culture and community. And while Mexico suffers significantly higher crime rates than the U.S., some Black Americans say the region can feel safer and more inclusive.

Some locals, though, say this rush of expatriates is threatening to change the fabric of the city. Rent prices are going up, short-term rentals are proliferating and Mexicans are being displaced by the more prosperous newcomers. These days on a walk through some popular neighborhoods, you may hear more English spoken than Spanish, and see cafes crowded with remote workers on laptops.

For locals, the influx of foreigners is complicated — creating more wealth for some Mexican residents while pushing out others.

Kyla Moran, 33, first visited Mexico City in 2017 for two months. The former model says she fell in love with the city and had been wanting to live there for years.

“The real richness of living here is how communal it is, how easy it is to know your neighbors,” says Moran, who relocated to Mexico City in 2019.

As an American immigrant in Mexico, Moran thinks it’s important to learn the language, make local friends and be immersed in the domestic culture. “If you’re going to come here, make an effort to be here,” Moran says.

“Living outside of my native language is difficult, but I feel like the quality of life, my community and the friends that I have makes it worth it.”

The strength of community is the reason Caitlin Hutchins and her husband decided to raise their daughter, Cora, in Mexico City.

Hutchins, 38, was a paralegal in North Carolina before she moved to Mexico City in 2011 to be with her now husband, Victor.

“We really appreciate that Mexico has a collectivist culture and not such an individualistic culture,” she says. “I value that my daughter is growing up with that sort of mentality that there is a we, there’s an us. We have to look out for each other.”

Adalia Aborisade, 48, moved to Mexico City in 2017 after teaching social studies, geography and history in Texas public schools for 19 years.

“The amount of peace and ease that I have in this life — I would not trade that for the world,” Aborisade says.

“The thing in my life that has changed the most is how I think about work and how I think about leisure. Things are just a lot more laid-back than in the U.S.”

When Aborisade lived in Texas, she had a 3,623-square-foot house and a $2,612-a-month mortgage. Rent for her 861-square-foot apartment in Mexico City’s Narvarte neighborhood costs 13,000 pesos a month, or about $728.

“The American dream is a sham. Because I had the house, the cars, the kids. I did all of that, but even achieving those things, it still seemed like it wasn’t enough,” Aborisade says. “I felt like in that moment [of my life] I was cratering under the weight of all of the expectations that were on me as a teacher.”

Hutchins echoes Aborisade’s views, saying it’s easy to confuse the American dream with pursuing earning power, product acquisition and consumerism.

In Mexico City, Hutchins isn’t as focused on “having stuff,” she says: “For my little corner of the world, things are pretty darn good. They’re simple. They’re not elegant. I have not acquired things, but I’m deeply satisfied by the simplicity of this life.”

Aborisade added that since moving to Mexico City she’s felt safer and more secure than she did in the U.S. That’s a common sentiment among the Black American community in the city.

Keith Brown was a teacher in the U.S. for 17 years. Brown knew he wanted to leave the country, but the pandemic and losing his parents in 2020 and 2021 helped push his timeline forward.

Brown says the murder of George Floyd made his decision to leave the United States much easier because as a Black man he didn’t want to live in “a country that is so steeped in negativity and racism.”

“Seeing a person publicly executed over and over again while we were trapped at home really changed my thinking and the thinking of a lot of people,” Brown says.

Brown has been in Mexico City for about a year. Instead of stressing about lesson plans and doling out his own money on school supplies, he spends his days trading until the early afternoon. He takes Spanish classes, participates in a chess club, and plays basketball. Brown is currently applying for permanent residency.

“There’s just a dream that I have, and that dream is to be treated like everyone else, to be treated fairly, equally, and to have peace,” Brown says.

“Mexico City is a place where I’ve been able to achieve that, and now I have time for myself.”

Like Brown, Tiara Darnell, 34, says she feels safer in Mexico City than she did in the U.S. Darnell left Buffalo, New York, to work remotely in Mexico in 2021.

Nearly a year into her relocation, Darnell was laid off from her job as an audio producer at Spotify and turned to a familiar business model. While living in Buffalo, Darnell started an ice cream business out of her home, so in 2022 she pivoted to hosting pop-up dinners in her Mexico City apartment. 

This year, in January, Darnell took the plunge and opened Blaxicocina, a soul food restaurant. 

“I didn’t know that I needed to leave in order to achieve what I have. I’ll stay in Mexico for as long as you all will have me,” she says.

While Black Americans like Aborisade, Brown and Darnell have gained a deeper sense of safety since leaving the U.S., Mexico still suffers from high rates of violent crime. Homicide rates are nearly four times those in the U.S., according to Mexico’s National Institute of Statistics and Geography.

In addition to that, it’s estimated that 90% of crimes in Mexico are never reported, according to the Human Rights Watch.

While the Americans in Mexico City enjoy a more comfortable life, many people believe it comes at the expense of the locals.

Guillermo Osorno, a longtime journalist, has lived much of his life in the most central parts of the city, which includes the neighborhoods of Roma Norte and La Condesa.  

He tells CNBC Make It that while the current influx of Americans might seem new to some, it’s actually a migration that has been going on for over 100 years.

“In the 20th century there was certainly a first wave of Americans in Mexico,” Osorno says. “We must remember that at that time there was Frida Kahlo, Diego Rivera, and [so] many American painters, and photographers came [over]. And so, for several decades there was always an American presence in Mexico City.”

Now many of the neighborhoods Osorno has called home are at the heart of gentrification in the city. Osorno says the change started in 2020. 

When the pandemic hit, Mexico kept its borders open to American tourists. Remote workers from the U.S. were able to enter the country freely on tourist visas.

“We began to see that the streets of the Roma and Condesa neighborhoods were beginning to fill with a new type of visitor. English began to be heard in the cafes, on street corners, and at parties,” Osorno says.

Americans can apply for temporary residence visas that allow them to stay in Mexico for up to four years as long as they can prove economic solvency, according to a press release from Mexico’s Foreign Affairs. 

“Most Mexican migration to the United States is survival migration. They are people who are looking for better life opportunities and are willing to risk a journey that is extremely dangerous to reach the United States,” Osorno says.

In Mexico City, the top 10% of households with the highest income make 13 times more than the bottom 10%, according to a national Mexican survey of household income and expenses. What’s more, the top 10% of households with the highest income make, on average, about $65,000 on an annual basis, according to Mexico’s National Institute of Statistics and Georgraphy. 

Meanwhile, the average salary in Mexico City in 2022 was about 357,240 pesos a year, or about $20,000.

Compare that to the largest city north of the border — the New York City metro area — where the average salary is close to $80,000 a year, according to Bureau of Labor Statistics data analyzed by ZipRecruiter’s chief economist.

“When North Americans come to Mexico, especially to Mexico City, they do not come for survival reasons,” Osorno says. “They come because there is greater labor flexibility, there is a difference in cost between Mexico and the United States that is much cheaper and their dollars go further.”

Local architect Leticia Lozano, whose work focuses on urban communities, says she has been displaced because of the income disparity between Mexico City natives and U.S. expats.

“Basically what happens is kind of a butterfly effect where … people from out of the country come and establish in the nicer areas or the nicer parts of our city, and then we are forced to go out,” Lozano says.

The average rent in La Condesa, one of Mexico City’s trendiest neighborhoods, has increased by nearly 60% over the past three years, climbing from $917 per month in January 2020 to $1,458 in August, according to Inmuebles24, a Mexican rental market company.

“There are a lot of people who make fun [that] we need a visa to go to those neighborhoods,” says Anais Martinez, a local food expert and tour guide. “I’ve heard people saying, ‘Oh, now the dogs speak English.'”

A recent survey of Mexico City residents, done in conjunction with The National Autonomous University of Mexico, found that 55% of respondents had difficulties paying their rent or mortgage, and nearly one-third of respondents changed homes during the pandemic. More than 60% of those who moved said it was because they couldn’t afford rent. 

“If you just want to push out all the Mexicans, it’s going to be really sad,” Martinez says. “It’s not going to be being in Mexico anymore.”

Mexico City has become one of the more popular destinations worldwide among long-term renters.

“Everybody wants to move here. … It is very good for me because I have a better salary here,” says Leticia Lozano López, a real estate agent. “The government is starting to see that a lot of foreigners [are] coming too, so they need to put the rules for the owners so they will be affordable for the locals too.”

Between April and June of 2023, the number of stays booked in Mexico City on Airbnb for longer than a month increased by 30% compared with the same period in 2019, according to The New York Times.

From 2019 to August 2023, short-term rentals in Mexico City increased by about 45%, according to AirDNA data. 

“There is currently no price control on rents,” says Alberto Martinez, a government consultant in Urban Regeneration and Citizen Participation. “When we cannot stay in our home because of an economic issue, we are breaking community ties, we are breaking traditions, we are breaking a series of things that make us culturally Mexican.”

Increasingly, locals say their landlords refuse to renew their leases. They then see their apartment or a renovated version of it on short-term rental sites like Airbnb for thousands of Mexican pesos more. 

This growing number of digital nomads draws attention to a larger housing issue in Mexico City, including the prevalence of short-term rentals.

It is estimated that the entire country of Mexico needs more than 800,000 new housing units a year for the next 20 years to accommodate the population growth, according to a recent study by MIT.

In 2022, the Mexico City government partnered with Airbnb to promote the city as a global remote working hub. The move came five years after the capital became the first city in Latin America where Airbnb implemented a lodging tax. 

According to the company’s website, guests who book Airbnb listings located in Mexico City will pay an additional 3% to 5% of the listing price, including any cleaning fees for reservations. 

The partnership sparked anger for many Mexicans.

“It seems to me that we have a great responsibility to be able to generate a friendly regulation that is not rigid, that is not bureaucratic, that allows those of us who have lived here all our lives and those who come to live now to coexist,” Alberto Martinez says.

Short-term rentals are not regulated in Mexico City. Other cities around the world like Barcelona and Florence have taken action to limit the number of Airbnb listings.

Airbnb says it “has reaffirmed its commitment to helping develop lesser-known destinations and helping redistribute tourism.” 

The company says it has “shared statistical information with the government of Mexico City about the platform activity in order to have a more objective view on the true nature and impact of short-term rentals on the capital.” 

In September, lawmakers introduced a bill in the Mexican Congress that would tax digital nomads after their 20th day in the country, but it remains at the proposal stage.

There is no clear solution to alleviate the pressure digital nomads and expats have put on Mexico City and its housing, but one thing is clear: New arrivals and locals need to find a way to co-exist peacefully and responsibly. 

Lozano thinks it’s important to remember that whether you’re American or Mexican, people who are migrating “are only looking for a better quality of life.”

“We’re all humans,” she says, “and we’re all looking to be able to afford our basic needs, to have a family, to have rest time.”

DON’T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!

Want to earn more and land your dream job? Join the free CNBC Make It: Your Money virtual event on Oct. 17 at 1 p.m. ET to learn how to level up your interview and negotiating skills, build your ideal career, boost your income and grow your wealth. Register for free today.