Gentrification in Latin America: Cultural Erosion or Economic Development?

Written by Natasha Chávez (MSc International Relations)

The phenomenon of gentrification has emerged as a pressing socio-economic issue in Latin America. But what does gentrification look like in this region, and who stands to benefit or lose under this new wave of urban change?

Understanding gentrification in Latin America

Gentrification refers to the physical and social transformation of lower-income neighbourhoods into middle and upper-class communities, displacing long-time residents and redefining urban landscapes. While this phenomenon occurs worldwide, in Latin America, it takes a different character due to historical inequalities, urban planning deficiencies, and the increasing influence of foreign capital.

Unlike in cities like New York or London, where gentrification often results from local economic shifts, in Latin America, it is frequently driven by foreign investment, tourism, and a lack of housing regulations. Many governments eager to attract foreign capital offer tax incentives to developers, allowing luxury real estate projects to flourish while neglecting affordable housing needs. Another key difference is the historical context. Latin America has a long history of colonial land dispossession, and many argue that gentrification represents a new form of this process. The influx of wealthier, predominantly white foreigners into historically indigenous or Afro-Latin neighbourhoods raises concerns about racial and economic inequalities. Local residents often find themselves priced out of their own communities, intensifying long-standing structural injustices. A defining feature is also its intersection with informal settlements. Latin American cities have large populations living in self-built housing, commonly referred to as favelas, villas, or barrios populares. While gentrification in the Global North typically targets already formalised neighbourhoods, in Latin America, governments sometimes use it as a justification for evictions in informal settlements, pushing vulnerable communities to the urban periphery under the guise of urban renewal.

The role of foreign investment and digital nomads

Latin America’s gentrification is closely linked to tourism, expatriate communities and digital nomads. The rise of remote work has accelerated the arrival of foreign workers, especially from North America and Europe. A major concern is the income disparity between foreigners and locals. Remote workers earning in US dollars or Euros enjoy the relatively low cost of living compared to their home countries, creating an imbalance in the market. As landlords and businesses increase their prices for wealthier residents, citizens earning in local currencies struggle to afford rising prices.

In Mexico City (Mexico), the number of foreigners with temporary or permanent residence grew by 23.8% in 2022, causing housing rental prices to raise eight times higher than the minimum wage and places like Condesa to see a rent increase of 66% in 2023. In Cuenca (Ecuador), a growing number of expats increased in proportion from 1 to 15 between 2009 and 2012, causing a 60% rise in housing prices since 2015. Similarly, in Costa Rica gentrification has manifested itself in coastal areas, which have experienced an aggressive process of residential purification while the percentage of people living in poverty has gone from 20.3% in 2019 to 27.6% in 2023. The economic impact is severe: rising rents and property values force lower-income residents to relocate to less desirable areas, often farther from employment opportunities, public transportation, and essential services.

Mega-events also contribute to gentrification. In Brazil, the FIFA World Cup and the 2016 Rio Olympics led to mass evictions and the deterioration of housing conditions for low-income populations under the pretext of urban development. This displacement disproportionately affects marginalised communities, including indigenous groups, Afro-descendant populations, and low-income workers who rely on affordable housing in central urban areas. Many of these communities were relocated to distant, poorly serviced areas. Buenos Aires (Argentina) has followed a similar pattern, with government-backed urban renewal projects causing mass evictions in historically lower-class neighbourhoods. This trend mirrors the historical patterns of marginalisation these groups have faced, reinforcing systemic inequalities rather than alleviating them.

Cultural erosion and the threat to local communities

Beyond economic displacement, one of the most significant consequences of gentrification in Latin America is the erosion of cultural heritage. Traditional neighbourhoods, once vibrant with street vendors, small businesses, and artisanal markets, are increasingly replaced by high-end boutiques, coffee shops, and international chains. A common complaint among long term residents is that businesses now cater primarily to foreigners, changing menus, prices, and services to English, and even adjusting dishes to suit international customers while sidelining local traditions. In Mexico City, locals report feeling like strangers in their own neighbourhoods, where local markets have changed to organic grocery stores, and traditional taquerías have been replaced by Instagram-friendly cafes serving overpriced avocado toast. This transformation results in a loss of authenticity, accommodating historic neighbourhoods into tourist-friendly zones rather than spaces of cultural preservation.

Public policies have further intensified cultural displacement. In Bogota (Colombia), authorities have promoted “public space regeneration” and crime reduction initiatives that disproportionately criminalise the informal economy and promote social cleansing. Street vendors and traditional markets face police persecution and confiscation, reducing the visibility of long-standing cultural practices in urban centres. And gentrification not only harms the local population, but it has created tensions between newcomers and long-time residents. There has been an increase in hostility towards foreigners, with expressions like “Gringo Go Home” becoming more popular.

This shift raises the question: at what cost does the so-called "urban development" come?

Resistance and policy responses

Despite the rapid growth of gentrification, resistance movements have emerged across Latin America, advocating for affordable housing policies, stronger tenant protections, and inclusive urban planning. Additionally, Latin Americans have actively resisted gentrification by reclaiming and asserting their cultural presence in spaces where it has been pushed to the margins. In Puerto Rico, one of the most powerful forms of resistance has been through art. Traditional music like Bomba y Plena have become more visible, while cultural events such as local markets, concerts, and performances increasingly highlight issues of displacement. There is a conscious effort to reinforce Puerto Rican identity in spaces where it was once taken for granted.

Community organisations and activists have also mobilised to push back against gentrification. In Oaxaca (Mexico), protests against short-term rental platforms like Airbnb have gained momentum, with residents demanding stricter regulations to reduce the conversion of residential units into tourist accommodations. Legal battles have also shaped resistance. In Costa Rica, activists mobilised to gather signatures in support of restrictions on land purchases by foreigners. Their efforts aimed to safeguard locals’ access to affordable housing and limit large-scale hotel developments along the coast.

Conclusion

Gentrification in Latin America is not just an urban trend, it is a reflection of deeper socio-economic disparities, historical injustices, and the consequences of global capital flows. While some argue that gentrification brings development and investment, the reality for many marginalised communities is one of exclusion and displacement. As cities continue to grow and attract investment, policymakers must balance economic development with social equity, ensuring that urban transformation benefits everyone, not just the privileged few.

The question remains: will these cities continue to be spaces of opportunity for all, or will they become exclusive regions accessible only to the wealthiest residents?