Short-term rentals in Puerto Rico are surging

Housing costs have also spiked, new report says

SAN JUAN, Puerto Rico – Activists want stricter regulations of short-term rentals in Puerto Rico as the U.S. territory sees a growing number of displaced renters and a spike in housing costs, the Hispanic Federation said in a report Wednesday.

The number of units operating as short-term rentals in Puerto Rico jumped to more than 25,000 in 2022 from about 1,000 in 2014, the report commissioned by the federation said.

It found that while short-term rentals create jobs, attract visitors and lead to more transportation options, renters have faced evictions, the cost of goods have increased amid an economic crisis and some ecological areas have been destroyed during new construction.

The report calls for creating a public registry of short-term rentals, classifying them as a business and increasing the island’s room tax from 7% to up to 11% and using the additional revenue to develop affordable housing.

“This has gotten to a point where the impacts are really palpable in Puerto Rico,” said Charlotte Gossett Navarro, the foundation’s Puerto Rico chief director.

A key factor in the increase of shortterm rentals was Hurricane Maria, which pummeled the island in September 2017. Many people migrated to the U.S. mainland afterward, while scores of new investors came to the island to buy homes and properties.

That led to a reduction in housing availability and affordability, Gossett said, adding that other factors including the pandemic also are to blame.

Now, between 100 to 400 new short-term rentals are reported a month in Puerto Rico, with apartments representing 60% of properties available for that purpose.

Dulce del Río-Pineda, who has lived 40 years on the island of Culebra just east of Puerto Rico, said she noticed a big change in the housing market in the past seven years with the influx of short-term rentals.

“It’s an economic benefit,” she said. “At the same time, our young people especially find themselves without any hope of being able to buy their own home. It’s a way of making our community disappear.”

The former teacher who now helps to run a local nonprofit said social inequality also has become more dramatic. Some homes on Culebra, a popular tourist destination, now cost $4 million to $8 million.

A recent study by the non-partisan Center for a New Economy and the Graduate School of Planning of the University of Puerto Rico found that a 10% rise in the number of short-term rentals in a community increases housing rental costs by 7% and the property value per square foot by 23%.

“With so much to offer visitors, tourism will always be an important part of Puerto Rico’s economy,” said Frankie Miranda, the Hispanic Federation’s CEO and president. “However, it cannot come at the expense of Puerto Rico’s residents and communities.”