BESIDE the small, open courtyard on the roof of a former mansion, Anuar Maauad had a cigarette in one hand, a beer in the other and a ringing constantly ringing cellphone in front of him on his long kitchen table. He sat, flanked by friends, as the Mexico City sky exploded with thunder so powerful it shook the 123-year-old building.

The Museo Universitario del Chopo, one of the restoration projects transforming Colonia San Rafael in Mexico City.

The 6,500-square-foot Casa Maauad is a work in progress. Mr. Maauad, a 28-year-old architect turned sculptor, bought the building in 2010 and has lived there while renovating the badly deteriorated structure. The three-story house, rumored to have once been a brothel, is now home to Marso (marso.com.mx), consisting of a curatorial space that opened this spring, an artist residency program and studios for Mr. Maauads friends.

Mr. Maauads house is part of the emerging art scene in Colonia San Rafael, a crumbling working-class neighborhood that in its heyday was home to the upper crust and considered the Broadway of Mexico. Its decline began in the 1970s, when San Rafaels French-influenced 19th-century mansions were abandoned by wealthy residents fleeing in the wake of a new metro line that made it reachable by all. Then, in 1985, an earthquake damaged several of the areas theaters and forced out many of the remaining middle-class families. The neighborhood became a notorious red-light district. But as artists are priced out of nearby Colonia Condesa and Colonia Roma, San Rafaels metro line and the affordability of its gorgeous, decaying buildings have become increasingly attractive.

Institutions are reclaiming forgotten structures as well. One of the most historically significant museums, the Museo Experimental El Eco (Sullivan 43; 52-55-5535-5186; http://www.eleco.unam.mx) reopened in 2005. Founded in the early 50s, the museum was supplanted by a gay bar before the National Autonomous University of Mexico (UNAM) bought the building and restored it. El Eco now presents a diverse set of works, from an open-air Godard screening to an installation by the Amsterdam-based artist Praneet Soi.

Just across the Santa Mara la Ribera border is Museo Universitario del Chopo (Dr. Enrique Gonzlez Martnez 10; 52-55-5546-3471; http://www.chopo.unam.mx), another UNAM restoration project for a former exhibit hall transported from Dsseldorf, Germany, in 1902. Enrique Nortens firm, TEN Arquitectos, reconceived the interior. It has now opened as a multidisciplinary space ideal for programs like the current International Festival of Sexual Diversity, with film, lecture and visual arts components.

But the recent revival also includes independent gallerists like Gerardo Contreras, the director of Preteen Gallery(Joaqun Velazquez de Len 58, interior 5; 52-55-2663-9070; preteengallery.net). The tiny studio, across a pink courtyard, is a glaring white. On a recent evening, Mr. Contreras apologized for his floors, which had been pocked by high heels at his last opening. It was packed, he said. Titled after a derogatory word for gay men, the show featured connect-the-dots coloring books that, when completed, revealed naughty scenes from 1970s gay pornography magazines.

Around the corner, Brett Schultz and Daniela Elbahara opened the storefront gallery Yautepec (Melchor Ocampo 154-A; 52-55-5256-5533; yau.com.mx) in 2009. They initially looked for space in Roma. But the rents were already crazy high, Mr. Schultz said.

In San Rafaels scrappy, bootstrapping art scene, Galera Hilario Galguera (Francisco Pimentel 3; 52-55-5546-6703; galeriahilariogalguera.com) is the exception, an established gallery that draws big names like Damien Hirst and propels Mexican artists like Bosco Sodi to international prominence. It was one of the first to bring an American kind of gallery, a white cube, to Mexico, said its director, Mauricio Galguera.

It must be strange to be in this traditional, folkloric neighborhood and come into this building, Mr. Galguera said. But, he added, given the areas history, I think it really fits.

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Heads Up: Colonia San Rafael in Mexico City is on the Upswing