Op-Ed: Lessons from Casa Herdz in Aguadilla — Urgent need to register, regulate short-term rentals
The multiple violations of our laws exposed at “Casa Herdz” in Aguadilla reinforce the urgent need to regulate short-term home rentals (STR) in Puerto Rico.
The actions taken by the city, reflect the true power of municipalities, under Act 107 of 2020 (Municipal Code), to regulate all businesses operating within their jurisdiction.
Our goal, for the well-being of the residents of Puerto Rico, is to promote the growth of responsible and sustainable tourism across the 78 municipalities, leveraging the marketing strategies of the destination; and where all suppliers, large and small, meet the minimum standards of quality, safety, sustainability, and citizen responsibility, while we improve our attractions, infrastructure, and services.
With this objective in mind, the House of Representatives is finally developing new legislation, which would provide the long-overdue regulations for STR, commonly identified as “the Airbnb,” one of the marketing platforms.
Currently, there are more than 22,000 STRs, marketed through seven mechanisms, including digital platforms, online travel agents, social media pages, and realtors; often operated by professional hosts, as unlicensed hotels with 10, 20, 50, and up to 200 lodging units.
Meanwhile, the STR digital platforms and commercial investors, are deploying an intense public relations campaign, highlighting the supposed benefits for Puerto Ricans of the democratization of the tourism ecosystem, with rigged infomercials and selected data.
Our reality is that, like in many USA destinations, more than 80% of these STR units are unhosted, operating as unregistered businesses, and benefiting commercial investors, who evaded paying more than $100 million in taxes, licenses, permits, and fees, in 2021.
Regrettably, many STR have circumvented the permitting process, causing an exodus in our residential communities, and serious deviations from our environmental regulations, as frequently permeate through the media. Recent examples include STR in Salinas, Cabo Rojo, Isabela, Rincón, and Aguadilla.
While more specific legislation may be needed, Act 272 of 2003 (Room Tax), along with Act 107 of 2020, and current laws and regulations governing the Fire, Health, DRNA, and Internal Revenue departments, provide the legal framework to regulate all businesses, including STR. Unfortunately, our government agencies have failed us.
As a result, thousands of STR have established themselves in residential condominiums and gated communities, violating with impunity, our basic standards for a safe, secure, and healthy community cohabitation.
Creating an effective STR regulation shall be simple. During the past 10 years, hundreds of cities across the nation have passed new laws and ordinances to regulate STR, strengthening their permitting and licensing processes, reducing tax evasion, and protecting their neighborhoods from the unintended negative side effects of unregistered STR, such as:
- Breaches in safety and security: Unhosted STR bring frequently changing visitors to residential neighborhoods and shall comply with the basic standards for safety, security, and the codes of public order; and have reliable systems to minimize disturbances and protect their guests and neighbors.
- Exhaustion of common resources: STR use public services to run their businesses, and accelerates wear and tear of the public and common infrastructure and resources, therefore shall be contributing proportionately to maintain and improve these.
- Reduced housing inventory for long-term residents: STR commercial investors drive gentrification in residential condominiums and neighborhoods. We must ensure the availability of affordable rentals and homes for long-term residents, young families and professionals, and our employees.
- Unfair competitive business environment: There is a substantial gap in the legal regulations, and fees applicable to all businesses, versus those imposed on STR.
It is imperative that all the responsible organizations with an interest in the island’s tourism sector, unite and claim for a safe, healthy, and world-class destination, and demand a uniform application of our laws and regulations to STR, now. Our future is in our hands.