Urbanization Review Mexico - Urban Spatial Form and Towards Productive and Inclusive Cities February 2015

Population growth and urbanization since 1900 Rapid urbanization started in the 1950s, today over 70 percent of the population live in cities Urbanization rates in Latin America in 2010 Population growth and urbanization since 1900 the story has to be put into the lac context, mexico is not diferent from the rest of LAC, with rapid urbanization rates picking up in the 50s and today over 80 % of pop in ciites – lac is an urban continent. 120 million large country, heterogeous Source: Census data from INEGI. Note: Urban population refers to settlements with more than 2,500 inhabitants. Source: UN Habitat 2010.

Systems of Cities by City Size and Regions in Mexico Mexico has a consolidated system of cities In 2010, 72% of Mexicans lived in the country’s 384 cities (>15k). Large cities continue to grow. 4.9% >1m-10m 2.6% >500k-1m 1.3% >10m 0.7% >100k-500k Average annual population growth 1990-2010 by city size group. National Urban System (SUN): There are 384 cities in the SUN. Federal government agencies in Mexico (CONAPO, SEDESOL and INEGI) separate them by three categories - metropolitan areas, urban conurbations, and urban centers. The definitions are as follows: Metropolitan Areas are one of three kinds of urban areas; i) a group of municipalities that share a central city and are highly integrated or ii) urban centers within one municipality that have a population of greater than one million, or iii) urban centers on the US-Mexico border with more than 250,000 residents. Urban Conurbations are urban areas that extend across more than one ‘locality’ and have over 15,000 residents. Make sure to explain that we are using Metropolitan Areas Urban Centers are cities with over 15,000 residents that do not extend beyond the boundaries of their ‘locality’. This classification of urban areas in Mexico differs from standard international practice. The effort to distinguish cities by their administrative boundaries rather than their size does contain some merit, but population size is a more important defining feature of urban areas than the number of municipalities it encompasses. The size of municipalities is a historical accident to a large extent, depending on when an area was incorporated as a state. Thus, although most Metropolitan Areas in the SUN are larger than most Urban Conurbations and Urban Centers, there is a significant degree of overlap. The smallest Metropolitan Area is Teziutlàn with 122,500 people in 2010, whereas the biggest Urban Center is Hermosillo, which had over 700,000 residents. Due to its population size, Hermosillo has more in common with most Metropolitan Areas than does Teziutlan. Moreover, the inclusion of border municipalities with smaller populations does not make sense.   Additionally, two of the three categories are based on the locality as an area definition. Yet the locality is a construct developed by INEGI to assist in taking the census, not an administrative boundary. Thus although urban conurbations might differ somewhat from urban centers in that they tend to have emerged as a result of two adjacent towns melding into one urban area, there is no difference in governmental system and thus no reason they should be separate category. Source: SEDESOL.

Rapid Urban Sprawl of Cities There have been important changes to Mexico’s urban spatial form in recent decades. The most notable trend is the rapid horizontal expansion of urban areas, partially driven by the construction of large housing developments Zumpango, Metropolitan Area of Mexico City Spatial

Getting the density story right Comparing actual urban areas marked by AGEBs urbano vs. larger municipal boundary that has distorted density figure Spatial

Mexican cities are actually turning into expanding doughnuts Queretaro Between 2000 and 2010, 67 of Mexico’s 91 largest cities lost population in its central 2km. In 18 of them over 20% of central city population moved out of city centers. The implication of current spatial development trends? How does current spatial form intersect with city’s productivity and inclusiveness? Chihuahua There are two important spatial trends that call for attention: hollowing city centers and rapid peri-urban expansion There are two troublesome urban growth trends in Mexico that merit policy attention; central cities are losing population and peri-urban developments are often built at high-density. Central city populations in a majority of large cities dropped significantly at the same time that urban peripheries expanded and added population. 67 of the 91 cities that had a population greater than 100,000 in the year 2010 lost population in the central 2 kilometers between the year 2000 and 2010. Eighteen of these cities lost more than 20 percent of their central city population. This is not because they were growing slower, either. The cities that lost population in their central areas had the same average growth rates in population and urbanized land as the 34 cities did not lose population in their central area. Nor is the trend limited to smaller or less dynamic cities; Hermosillo, Leon, Matamoros, Monterrey, Puebla, and Queretaro are among those cities that experienced a major loss of population in the central city    The second trend is an increase in the number of neighborhoods with high population density in the urban periphery. In many cases densities exceed those of central cities. This results primarily from the push to build low cost housing and is different from the traditional form of urban sprawl, which is low-density residential development (Monkkonen, 2011a). It is problematic nonetheless, in fact potentially more problematic as it leads to greater levels of wasteful commuting given the location of jobs in central cities. A stark example is found in Ciudad Juarez. Figure 2 shows the change in population densities of census tracts from 1990 to 2010, demonstrating a clear loss of central city population and high density peri-urban growth. This was also the city with the highest vacancy rate in the country in 2010. The combination of these factors has create an imbalance in the distribution of density in many cities that represents an inefficient urban spatial structure. Detailed explanation of these calculations and summary statistics are provided in a later section. Mexican cities have average population densities. In a global study of urban form and expansion, Angel et al. (2010) analyzed the population density of 3,646 large cities – with a population of over 100,000 – around the world. The average population density of these cities was 107 people per hectare. The average population density of the 80 urban areas in Mexico for which Angel et al. (2010) calculated densities was estimated to be 106 people per hecatare; almost exactly the global average. This means that Mexican cities have higher population densities than most European cities, like Paris or Barcelona, which have population densities of 65 and 66 by Angel’s calculation, respectively. They use satellite imagery to estimate the urbanized area of cities, although the resolution of this global imagery is relatively coarse. Pixel sizes range between 250 and 1,000 meters. Population data are from Thomas Brinkhoff's City Population website. They reflect administrative boundaries more than those of urbanized areas, which gives overestimates of densities in places with large rural populations within municipalities. Spatial

Uncoordinated peri-urban expansion can harm productivity and inclusiveness Urban Spatial Dev. Productive Cities Livable/ Inclusive Cities Access to Jobs / Commuting Time Employment Opportunities Access to Infra/Social Service Cost of Infrastructure and Maintenance Environmental Implications Guadjalajara Guadalajara is not only the second biggest metropolitan area of Mexico (after Mexico City), but also the third one with the highest population density (after Mexico City and Toluca). According to the CONAPO, the population of the metropolitan area for 2010 was of 4.4 million with a population density of 1,626 habs per km2.  However , as many other Mexican cities, Guadalajara has had a disorganized growth, creating a very flat city that increases the costs of public services provision to properties in the suburbs, areas in which the social housing is being constructed.   Economic Density Crime & Violence Case study in Guadalajara under way. Spatial

Uncoordinated Urban Expansion and Income Characteristics of Expansion Areas Differences on housing prices can also be observed in housing characteristics. The northern side, not only have the greatest housing values, but also the bigger properties in terms of number of bedrooms and number of bathrooms. While the northern region has, at the median, three bedrooms, the rest of the city only has two. In terms of number of bathrooms, properties in the north have, at the median, two bathrooms, while the rest of the city only has one. 51,000 observation Spatial

Growing Distance between Jobs and Housing in Guadalajara Population and job density by distance to city center, Guadalajara

This spatial mismatch often results in wasteful commuting and also higher reliance on private cars. According to one of these OECD data bases, the average US citizen only commutes 25min per day (or 125min per week), while the OECD average is about 38min per day (i.e. 190min per work week = 3.17hours). In this comparison, our numbers for Mexico do not fare very well. Mexico is not included in this database. Source: ENUT, INEGI. Source: SIMBAD (State and municipal datasets system), INEGI. Spatial

In the case of Guadalajara Commuting time and household expenditure on commuting: origin-destination survey and its analysis is on the way. Limitation for statistically representative data

Uncoordinated housing development in urban periphery has led to high level vacant houses In 2010, more than 22.7m housing units in cities (over 73% of all housing units) 14.4% of these units are vacant Vacant housing per 100,000 inhabitants by city type, 2010 Vacant housing per 100,000 inhabitants by region, 2010 avg.: 4,640 avg.: 4,640 Vacant housing reaches 3,280,211 units (total housing units in urban areas in 2010: 22,758,848) Source: Population Census, INEGI. Spatial

Business as Usual Scenario Business as Usual Scenario Cost of infrastructure provision and maintenance is much higher with current urban footprint Case Study for Los Cabos Assuming that Los Cabos will have 600k inhabitants in 2040 Vision scenario uses higher densities  45% area less than BAU scenario Business as Usual Scenario Vision Scenario ROADS E WATER DRAINAGE MX$ 219,433m 33,740 units -67% Business as Usual Scenario Vision Scenario WATER DRAINAGE MX$ 6,134m -67.6% E WATER DRAINAGE ROADS MX$ 72,245m 11,844 units Vision scenario uses higher densities, 45% area less than BAU (i.e. 13,219 hectares smaller) MX$ 1,986m CONSTRUCTION COSTS MAINTENANCE COSTS Source: SEDESOL. Spatial

Business as Usual Scenario COSTS FOR PUBLIC AND PRIVATE TRANSPORT Urban sprawl also has important implications on transport costs and CO2 emissions BAU Scenario Vision Scenario Business as Usual Scenario Vision Scenario CONSTRUCTION - 19,446t CO2 LIGHTNING-15t TRANSPORT – 789t CO2 20,249 tons CO2 -41.3% PUBLIC – MX$ 885m PRIVATE – MX$ 528m MX$ 1,413m -47.7% CONSTRUCTION - 11,297t CO2 LIGHTNING-8t TRANSPORT – 576t CO2 11,881 tons CO2 PUBLIC – MX$ 536m PRIVATE – MX$ 203m MX$ 739m CO2 emissions related to construction  flow emissions to Transport vs. one-off emissions for construction  what are the blind spots COSTS FOR PUBLIC AND PRIVATE TRANSPORT CO2 EMISSIONS Source: Centro Mario Molina, Ciudades: Merida. Escenarios de Crecimiento, 2014. Spatial

Economic density matters for service industry, giving a reason for more compact development. Density and Manufacturing Productivity Correlation between density, manufacturing and service shows opposite trends Economic density matters for service sector for economic spill-over effects, flow of knowledge and R&D, while manufacturing sector is driven by cheaper labor and land. Promoting high-density and compact development is relevant to cities with emerging service sector. Density and Service Productivity Heterogeneity of economic structure and spatial form makes analyzing the linkage of the two difficult, but a few observations can be drawn. Correlation between density, manufacturing and service shows opposite trends Economic density matters for service sector for economic spill-over effects, flow of knowledge and R&D, while manufacturing sector is driven by cheaper labor and land. High-density/compact development may be not be suitable for certain industries. As such, rigid policy limiting urban growth may not be the optimal solution to respond to market force. Instead, focus on better connectivity to reduce distance of spatial dispersion and forward looking/flexible urban planning for future spatial expansion. Productivity

Infrastructure access and quality is worse in urban peripheries. Infrastructure Access and Quality in Guadalajara The Infrastructure Index for Guadalajara was generated using the 2000 INEGI census data. The index looks at the total number of houses per census tract that lack water infrastructure, drainage or electricity and is then normalized by the total number of inhabited houses in the census tract. These values are then summed to create the final index values. The index values were calculated by using quartiles, which were defined as the following four categories: Very Low Quality (.138 – 2.00), Low Quality (.021 - .137), High Quality (.006 - .020), and Very High Quality (0 - .005). The Very Low Quality values mostly correspond with the peripheral areas of Guadalajara while more of the interior regions generally fall under the Very High or High Quality values. Spatial

Social Aspects of Spatial Segregation Crime and violence: urban poverty, incidence of crime and violence and its linkage with spatial segregation Data on incidence and perception survey at municipality level Disaster risk and vulnerability: urban poverty and disaster risk. How to measure at spatially disaggregated level? Availability of drainage and shelter as a proxy?

Linking with Policy Dialogue: Key Recommendations Spatial structure is multi-dimensional and complex, current policy focus on ‘controlling’ urban expansion should be shifted towards more a nuanced spatial development strategy. Key priority should be investing in improving institutional capacity for urban planning at local level. The current housing subsidy program may not be the most effective policy tool to change urban spatial development. Instead, well articulated urban policy and instruments, coordinated with housing, should play a more prominent role in promoting productive and inclusive spatial development.   Spatial

Urban Spatial Development towards Productive and Inclusive Cities Key Recommendations Instead of focusing on limiting urban expansion, focus on re-densification and regeneration of urban centers to make inner cities more livable. Take a lead in experimenting with innovative financing instruments for urban regeneration. Fiscal incentives are important for urban re-densification, especially addressing housing affordability, but do not neglect regulatory and legal framework at local level necessary to make urban redevelopment happen. Invest in modernizing the cadastral system. Fluid land markets and the information system are pre-condition for urban instruments to work. Urban re-densification should be accompanied by improved local regulation for urban infill redevelopment. In particular, of importance is to allow higher densities, mix-use land use plan & zoning, easier land pooling, plot merges and flexible infrastructure requirements (i.e. less parking requirements, flexible plot sizes), Spatial

Thank you!

Population Density Persons per Hectare Tlaxcala-Apizaco Orizaba

Density Gradient Measures the change in population density of urban area from center to periphery Cuernavaca Zitácuaro

Centrality Index Measures the average distance of the population from city center relative to the size of the city Minatitlán Uruapan

Circularity Index Measures urban fragmentation or compactness Acapulco Navojoa

Clustering Index Measures the concentration of people in certain areas Zacatecas-Guadalupe Queretaro

Cross-Cutting Policy Area: Coordination Key Recommendations: Coordination Vertical alignment and coordination between federal and local governments towards common objectives and incentives for sustainable spatial development Horizontal integration of institutions within and beyond municipal boundaries for urban and housing development Develop appropriate institutional mechanisms for metropolitan governance and build institutional capacity to ensure integrated economic and physical planning Improved coordination between urban and transport planning and investment, improved transit-oriented development Ground these more in Mexico – what works? What does not work? How does it link with National Urban Plan? Better coordination with BANOBRAS’ transport and housing program National Infrastructure Program provides a good opportunity for the coordination between ToD, land use and transport connectivity Fondo Metropolitano Coordination