Mexico: Regularizing irregular occupation, Infonavit's new plan and its implications for the private sector

On June 16, 2025, the National Workers’ Housing Fund Institute (Infonavit) held a public conference, led by President Claudia Sheinbaum, to introduce this new rent-to-own program designed to regularize and rehabilitate housing units that are currently in a state of abandonment. According to Octavio Romero Oropeza, General Director of Infonavit, the Institute conducted a survey identifying approximately 168,000 housing units in a state of abandonment, which are part of an estimated total of 843,000 irregular properties nationwide.

However, this new program has sparked intense debate among real estate sector experts. The initiative, aimed at preventing evictions and providing legal certainty to vulnerable families, proposes that individuals currently occupying properties without legal title, due to abandonment, default, or unlawful occupation, enter into rent-to-own agreements. These agreements would allow them to pay affordable rent over a period of four to five years, after which they could acquire the property at its book value, significantly below market price. While commendable in its social intent, the proposal raises important legal, financial, and ethical questions.

From a legal perspective, critics warn that this mechanism could send a contradictory message to the market. By offering preferential terms to those who accessed housing through irregular means, there is a risk of undermining the principles of legality and private property rights. That is, allowing agreement breaches or unlawful property occupation to result in tangible benefits may weaken the incentive for voluntary compliance and gradually erode trust in the broader system.

In financial terms, the impact is far from negligible. Infonavit is currently facing a significant portfolio of non-performing loans, and adopting this new model based on book values and without a guaranteed recovery could worsen its financial standing. Although there has been a promise to respect the rights of the original owners, many developers have expressed concern over the possibility that such programs could expand without clear rules or boundaries.

Paradoxically, the same model, when structured with well-defined regulations, can be quite attractive in the private sector. A rent-to-own scheme designed with contractual clarity, aligned incentives, and legal compliance can be a powerful tool for developers and investors. Unlike the institutional approach, the private model targets individuals with verifiable repayment capacity but without immediate access to mortgage credit. It also enables inventory to be placed without sacrificing market value, generates short-term cash flow, and opens a path to financial inclusion without distorting market dynamics. All this, with agreements that clearly outline terms, timelines, and consequences in the event of default.

While Infonavit’s program has reignited an important discussion about housing access and tenure regularization, its development also underscores the need for caution in applying rent-to-own mechanisms. In the private sector, this model can be a viable and strategic alternative, provided it is designed with legal foresight, commercial responsibility, and respect for private property and the rule of law. Nonetheless, it is advisable to closely monitor the program’s progress and, if applicable, it’s eventual implementation.