- Citing rising housing costs in Puerto Rico, activists are pushing for tighter regulations on short-term rentals.
- While short-term rentals contribute to job creation, tourism, and transportation options, they can also lead to evictions and higher costs of living.
- Proposed measures include establishing a public registry of short-term rental properties, categorizing short-term rental properties, and increasing the island’s lodging tax.
The Hispanic Federation said in a report Wednesday that activists are calling for tighter regulations on short-term rental housing in Puerto Rico as the U.S. territory sees a growing number of displaced people and rising housing costs.
The number of homes operating as short-term rentals in Puerto Rico jumped from about 1,000 in 2014 to more than 25,000 by 2022, according to a report commissioned by the federation.
The study found that while short-term rentals create jobs, attract visitors and increase transportation options, renters face eviction, prices rise amid the economic crisis, and some Ecological areas were found to be destroyed during new construction.
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The report calls for creating a public registry of short-term rentals, classifying it as a business, increasing the island’s room tax from 7% to a maximum of 11%, and dedicating the additional revenue to affordable housing development. I’m looking for it.
A wooden flag of Puerto Rico is raised on the docks of Condado Lagoon in San Juan, Puerto Rico, on September 30, 2021. Activists are calling for tighter regulation of short-term rentals in Puerto Rico within the U.S. territory. Renters are being chased out and housing costs are rising. (AP Photo/Carlos Giusti, File)
“We’ve reached a point in Puerto Rico where the impact is really evident,” Charlotte Gossett Navarro, the foundation’s Puerto Rico director, said in an interview.
The main factor behind the increase in short-term rental properties was Hurricane Maria, which hit the island in September 2017. Since then, many people have immigrated to the mainland United States, while many new investors have come to the island to buy homes and real estate.
That led to a decline in housing availability and affordability, Gossett said, adding that other factors were also to blame, including the pandemic.
Currently, between 100 and 400 new short-term rentals are reported per month in Puerto Rico, with apartments accounting for 60% of the real estate available for that purpose.
Dulce del Rio Pineda, who has lived on Culebra Island, just east of Puerto Rico, for 40 years, said she has noticed a major shift in the housing market over the past seven years with an influx of short-term rentals. .
“It’s an economic benefit,” she said. “At the same time, young people in particular are losing hope of being able to buy their own home. This is a way to erase our communities.”
Social inequalities have also become more dramatic, said the 64-year-old former special education teacher who now helps run a local nonprofit. Some homes on Culebra, a popular tourist destination, currently cost between $4 million and $8 million.
A recent study by the nonpartisan Center for a New Economy and the University of Puerto Rico School of Planning found that a 10% increase in the number of short-term rentals in a community increases housing rents by 7% and property value per square foot by 23%. Masu.
“Tourism will continue to be an important part of Puerto Rico’s economy because we have so much to offer tourists,” said Frankie Miranda, CEO and president of the Hispanic Federation. . “But we cannot do that at the expense of Puerto Rico’s residents and communities.”
Activists are calling for rent control policies. Restore abandoned properties for long-term rentals. Designate six or more rental housing units as small-scale inns. Designate areas for short-term rentals to protect ecological lands and agricultural land.
Various bills have been proposed regarding how short-term rentals should be operated. Proposals currently under consideration could, among other things, give local governments control over the regulation and supervision of such properties.
“The good thing is that discussions have already started within the government,” Gossett said. “There is a recognition that something needs to change.”
But the new report said the bill does not address the housing impacts of short-term rentals, such as evictions and gentrification.
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Gossett noted that the study found a consensus that short-term rentals could be important to the island, and said the foundation was not calling for a ban on short-term rentals.
The day before the report was released, Airbnb issued a statement saying it supports “comprehensive regulation” of short-term rentals, requiring those operating in the capital, San Juan, to register by early June.
Airbnb, which generates more than $70 million in lodging tax revenue for Puerto Rico and supports much of the growth in short-term rentals, also supported a bill that would have allocated 5% of lodging tax revenue to local governments. . Lawmakers voted against the move, with some saying it was due to “power games” among them.
Meanwhile, another bill is being introduced to lawmakers that would create a national regulatory framework for short-term rentals. In the absence of such a framework, lodging taxes are collected from Airbnb and other businesses based on agreements with Puerto Rico’s tourism companies.
