Opportunity seen as digital nomads arrive

Among glitzy apartment buildings springing up in Mexico City's Juarez neighborhood, fashionable coffee shops are taking the place of taco stands. And English is replacing Spanish on signs and posters aimed at an influx of newcomers.

The remote work boom sparked by Covid has lured large numbers of "digital nomads" from the United States to the Mexican capital and other cities, drawn in part by lower housing costs.

But their arrival has fueled some residents' anger about gentrification, which they say is pricing locals out of their homes and leading to evictions in areas coveted by developers.

"We're starting to see posters on the street saying [digital nomads] aren't welcome," says Sofia Ramirez, director of think-tank Mexico Como Vamos.

Landlords in some districts are letting properties to foreigners via Airbnb at higher rates, putting them out of reach of most existing residents.

Of about 10,000 apartments listed on Airbnb in Mexico City, the average price per night is 1,450 Mexican pesos (HK$563), while 95 percent of Mexican workers earn less than 518 pesos per day.

As the global nomadic workforce tops 35 million, according to a recent estimate by the ABrotherAbroad.com, researchers and locals say authorities must protect residents from surging housing demand and ensure they see benefits from the shift.

"Digital nomadism wouldn't be a problem if it was regulated to generate the least possible damage to locals," says Sergio Ramirez from the 06600 Juarez Neighborhood Platform and Observatory, set up to shield local communities from gentrification. "However, we see one population being affected to benefit a different one."

In Portugal's capital, Lisbon - another hotspot for nomads - authorities have taken some measures to address a housing crunch caused partly by sizzling demand for short-term accommodation.

While Lisbon and Mexico City are relatively affordable for many foreigners, they were ranked the world's third- and fourth-least liveable cities based on local rents and wages, a recent study by CIA Landlord Insurance found.

"Here you are at the heart of the problem," says Susana Peralta, gesturing to the Alfama district, a formerly working-class neighborhood dotted with chic restaurants and bars dedicated to Portugal's traditional fado music. "The concentration of short-term rentals in this neighborhood is huge."

Some researchers estimate the proportion based on short-term rental listings to be more than 50 percent of all residential properties in the inner city district of Santa Maria Maior.

A change in the short-term rental law of 2018 gave power to municipalities to limit the number of short-term rentals in some districts. But it has not been applied strictly in some places, says Luis Mendes, a geographer who studies gentrification at the University of Lisbon.

When the pandemic hit Portuguese authorities banned evictions, and key workers were housed in short-term rentals left empty by tourists. But such relief measures have now been lifted in tandem with travel curbs.

For Lisbon mayor Carlos Moedas, tourism is "essential for the city." He adds that he's not afraid of "overtourism." It's simply a question of managing it.

He also talks enthusiastically about supporting digital nomads and locals via tech startups and the "trickle-down effect" their presence in Portugal could have for the broad economy.

There are signs of this happening, says Romanian fitness app entrepreneur Olivia Benton, who runs Lisbon's Digital Nomad Meetup Group, which attempts to create "deeper connections" with the local community through talks, visits and hosting events at local cafes that are also open to Portuguese residents.

Benton says she has never felt resentment or hostility from locals.

At one recent cafe meetup, dozens of young remote workers tapped away at their keyboards as cafe manager Daniella Siragusa served strong coffee.

"It's good to have nomads here," she says, thankful for the business after repeated coronavirus lockdowns.

Blaming digital nomads as the source of housing shortages in Mexico City's up-and-coming neighborhoods is misguided and highlights the need for policy to address such social shifts, says Mexico Como Vamos director Ramirez.

"Mexican authorities are responsible for the absence of a plan to relocate locals or to provide credits to affected businesses," she adds.

According to a May report by the group a lack of data on digital nomads has prevented Mexico capitalizing on their presence.

It recommends creating a legal status for digital nomads that provides them with opportunities to invest, create startups and pay taxes.

Many other tourist hotspots have been quick to embrace the nomads, seeing the trend of remaining longer in one location as a way to recoup pandemic losses.

Destinations such as Aruba, Barbados, Cape Verde, Croatia, Estonia, Indonesia, Malta and Norway have created digital nomad visas, allowing people to stay put and work for up to two years.

Beyond the dollars nomads spend, they can collaborate with local workers, helping to share their skills and knowledge, says Prithwiraj Choudhury, an expert on the future of work and an associate professor at Harvard Business School.

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