Op-Ed: Towns have finally acknowledged urgent need to register, regulate short-term rentals
In Puerto Rico, like in many destinations around the world, “shared economy accommodations” are a fairytale; and municipalities are finally recognizing the importance of registering and applying regular rules to commercial operations of independent short-term rentals (STRs).
Isabela and Dorado have enacted new ordinances, Aguadilla and San Juan are in progress, and other cities will follow.
These ordinances are based on the city’s responsibility, under Act 107-2020, to register and regulate all businesses operating within their jurisdiction; protect the well-being and quality of life of their citizens; and secure the necessary resources to provide a diversity of common services to its constituents.
In Puerto Rico, there are more than 25,000 STRs, contributing to the dispersion and growth of tourism in the 78 municipalities. However, about 85% are professionalized businesses, marketed simultaneously through seven business models, including digital platforms, online travel agents, and real estate agents, frequently run by specialized hosts as ghost hotels and rented without supervision, benefiting commercial investors.
Conservatively, in 2022, STRs sales reached about $600 million, while approximately $100 million eluded the treasury (municipal and state) in taxes, licenses, permits, patents, and other legal requirements applicable to all businesses, regardless of their size.
Although the hostel sector and commercial short-term lodging activities are well regulated, and government statutes provide an adequate legal framework for regulating STRs businesses, implementation has been inconsistent and accommodating with this segment.
As a result, thousands of STRs have been established in environmentally protected areas, residential condominiums, and gated communities, violating with impunity our basic standards for healthy community life.
Unfortunately, STRs administered by commercial investors are causing the exodus of residents in our tourism communities; and when rented without supervision, they attract illicit activities and facilitate serious deviations from our environmental protection standards and Codes of Public Order, as widely reported in the press.
Frequent deviations noted include gaps in safety, security, waste disposition, noise control, and access to affordable housing; the improper use and accelerated wear and tear of the public and common infrastructure and services; and creating an unfair competitive environment for patented businesses.
Our collective objective, for the socioeconomic well-being of our residents, must promote the growth of responsible and sustainable tourism in our 78 municipalities, driven by our destination marketing strategies, and where all providers, large and small, conform to acceptable standards of quality, safety, sustainability, and citizen responsibility while contributing equitably to maintaining the public infrastructure and services used to advance their businesses.
With this goal in mind, the Municipality of San Juan enacted Ordinance Project No. 26, which once amended and approved, shall provide the regulatory framework to register the over 4,600 STRs operating within the metropolis, producing between $110 – $126 million in annual sales, while making limited contributions to the city’s revenues.
As occurred in other cities in the USA, while San Juan strives to improve the quality of life in the city through this ordinance, commercial investors and professional hosts are deploying — with selected data — an intense publicity campaign highlighting the supposed STRs benefits for the tourism sector and the average resident.
Similar ordinances, as planned by the San Juan municipal government, have been successfully established in hundreds of jurisdictions around the world, mitigating the adverse effects caused by commercial STRs, by assigning adequate resources for their implementation and enforcement.
It is imperative that all stakeholders, public and private, with a genuine interest in strengthening and growing our tourism sector, unite to support the approval of Ordinance Project No. 26 in the town of San Juan, and demand the consistent application of our approved laws and regulations to all short-term and transient accommodations in Puerto Rico.