Chronic flooding in the Chalco valley, state of Mexico, Mexico, is the outcome of past and present socio‐environmental changes which have taken place in Mexico City's south‐eastern peri‐urban interface. This flooding is the result of a complex interaction between urbanisation in an ex‐lacustrine area, permanent ecological deterioration and ground subsidence, poor sanitation and inadequate policy responses. Far from solving the flooding problem, short‐term policy responses have created increasingly unsafe conditions for current residents. A socio‐historical analysis of disasters reveals the importance of taking into consideration particular social actors and institutions in hazard generation and flood vulnerability over time. This paper analyses three aspects of this flooding: first, the importance of approaching floods from a socio‐historical perspective; second, the relation between urbanisation, former policies and flood risk generation; and third, current policy responses to and the failure in the risk management of La Compañía Canal.