Only 17% of Baja California Sur’s population has daily access to drinking water, and Governor Víctor Manuel Castro Cosío says the state’s real estate boom is making it worse. In a public statement this week, Castro Cosío called for halting new construction in Los Cabos until a desalination plant or alternative water source is built. He also announced plans to form a working group with state Congress, municipal governments, and SEMARNAT, Mexico’s federal environmental agency, to require proof of water availability before any new development permit is approved.
“If the desalination plant is not built or another alternative water source is not developed, construction in Los Cabos must stop,” the governor said. “New people arrive every day.”
La Paz Issued 3,197 Construction Permits While Residents Ran Short of Water
The BCS water crisis real estate tension is not new, but the scale of the contradiction has sharpened. Between 2019 and 2024, the Municipality of La Paz issued 3,197 construction permits, according to data from the Cómo Vamos La Paz Citizen Observatory and CEMDA, the Mexican Center for Environmental Law. The Central Zone, El Centenario, and the Coronado neighborhood received the largest share of residential permits. Residents in those same areas routinely report water shortages.
Gabriela Ramírez, coordinator of the Territory Program at Cómo Vamos La Paz, said authorities need to evaluate whether existing infrastructure can support large projects before approving them. “The infrastructure is already overwhelmed in the city’s consolidated areas,” Ramírez said. “Every day there are changes in daily urban life in La Paz related to access to basic services.”
The paradox runs deep. BCS ranks second nationally in the Mexican Institute for Competitiveness index, which measures a state’s ability to attract investment, generate jobs, and support economic growth. Yet the state sits near the bottom for access to potable water. That gap between economic attractiveness and livability is exactly what the governor is now trying to address through regulation.
BCS relies heavily on underground aquifers, and most of them are overexploited. CONAGUA, Mexico’s national water commission, has classified the San José del Cabo aquifer as severely overdrawn for years. The La Paz aquifer faces similar pressure. A proposed desalination plant for Los Cabos has been discussed since at least 2018, but construction has not begun. OOMSAPAS, the Los Cabos municipal water utility, currently operates a small desalination unit in San José del Cabo. It does not produce enough to close the gap between supply and the demand created by tourism and residential growth.
Governor Targets Foreign-Owned Rentals in Loreto
Castro Cosío also singled out Loreto, where he said foreign buyers are purchasing land, building three- and four-story apartment buildings, and renting units through platforms that bypass hotel regulations. “They pay lower taxes, and these developments are multiplying,” he said. “Everyone has the right to work and turn their home into a small business, but it has to be regulated.”
That comment puts a spotlight on a growing tension in smaller BCS towns. Loreto’s population hovers around 20,000, but its short-term rental inventory has grown steadily on platforms like Airbnb and Vrbo. Property owners who operate outside the hotel tax framework pay the standard predial (property tax) rather than the 3% lodging tax that licensed hotels collect. The governor framed this as both a fiscal and an infrastructure problem: more units drawing water without contributing the tax revenue needed to expand service.
For property owners and buyers across BCS, the governor’s proposal could change the permitting landscape. If the working group with Congress and SEMARNAT produces legislation requiring developers to prove water availability before breaking ground, new projects in Los Cabos, La Paz, and Loreto could face significant delays or outright denial. Existing permit holders may be unaffected, but anyone in the early stages of a project should watch for new requirements.
Short-term rental operators in Loreto and elsewhere should note the governor’s language about regulation. While no specific enforcement action was announced, the public framing of unregistered apartment buildings as a problem suggests new licensing or tax rules could follow.
BCS Environmental Law Updated for First Time Since 1991
The state recently updated its Environmental Balance and Protection Law for the first time since 1991. That 35-year gap left BCS with regulatory tools designed for a state that had roughly 317,000 residents, according to the 1990 census. Today the population exceeds 800,000, and tourism brings millions of additional visitors annually. The updated law gives state authorities stronger legal footing to limit urban growth in areas with strained infrastructure.
Castro Cosío said the administration’s goal is to create “clear regulations” to organize growth and prevent projects from being approved where water systems are already saturated. The working group with Congress and municipalities has no announced start date yet, but the governor indicated he would push for its formation in the current legislative session. The original reporting was published by Radio Fórmula.