Canada and Mexico once appeared to be travelling the same housing road. Both dismantled public housing capacity, empowered private developers, and transformed homes into financial assets. The results were familiar: rising prices, growing inequality, and worsening affordability.

Today, however, the two countries are heading in opposite directions. While Canada continues to rely on market-led solutions, Mexico has begun using the power of the state to decommodify housing and rebuild public capacity. Canadian policymakers should pay close attention.

Like Canada, Mexico’s forays into housing financialization began in the 1990s, when the national government moved state housing bureaucracies away from construction and planning and refocused them on mortgage financing and lending to private developers—effectively privatizing homebuilding across the country. Both countries downloaded responsibility for housing onto severely under-resourced lower orders of government. Both launched a mortgage-backed securities program in the early 2000s that flooded credit markets, put consistent upward pressure on prices, and allowed international investors to extract interest payments from domestic mortgage holders. Both softened their regulatory structures to allow real estate investment trusts (known as FIBRAS in Mexico) to apply that same extractivist logic to renters.

Mexico’s previous president, Andrés Manuel López Obrador, commonly referred to as AMLO, recognized that something was wrong with the country’s housing system. His solutions, like Mark Carney’s, involved retooling the state’s housing bureaucracies to finance housing construction in a more targeted way while carefully maintaining the private sector’s grip on housing development.

Needless to say, it didn’t work.

Housing affordability continued to deteriorate under his tenure. According to OECD reports, real housing prices rose by 31 percent between 2005 and 2020, 1.5 times faster than incomes. Formal housing became increasingly out of reach and many people resorted to self-built homes, informal settlements, or doubling up with family.

There is perhaps no better symbol of the legacy of Mexico’s market-based housing policy than Torre Mítikah—the tallest........

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