Small Inn Assoc. backs Dorado’s move to regulate short-term rentals
The Puerto Rico Association of Small Inn Owners and Tourism confirmed its support of a Municipal Ordinance passed in the Municipality of Dorado to regulate the more than 1,000 independent short-term rental accommodations operating in the town.
Last week, local media outlets reported that the beachfront town is requiring a permit from short-term rental operators to get a permit from the Planning Office whose cost ranges from $1,000 to $3,000 depending on the number of properties to be rented. Representatives from Airbnb and Join-a-Join raised red flags over the new requirements.
Puerto Rico’s short-term rental industry comprises some 4,000 properties islandwide, which require uniform regulations across the board, the companies noted.
“We applaud the fact that cities with high tourist activity, such as Dorado and San Juan, recognize that the vast majority of these independent accommodations are businesses with dozens of units and significant revenues, and must comply with all the requirements, permits, licenses, patents, insurance, and minimum standards required of other similar businesses and even much smaller ones,” said Xavier A. Ramírez, president of the association.
“This Municipal Ordinance Definitely complements the current laws and regulations of the Tourism Company, addresses the most important gaps with these businesses, and implements several elements that have been successful in other cities in the United States,” he said.
“In addition, we believe that the departments of the Treasury, Health and Firefighters should intervene in this matter,” said Ramírez.
Puerto Rico already has the laws and regulations necessary to enforce the registration and regulation of this segment of short-term accommodations, and there are other areas of permits, municipal taxes, licenses, and taxes that are incumbent upon each municipality to implement, as well as other government agencies, the association stated.
The trade group said it has studied this issue for the past nine years and are not against the independent accommodations in the shared economy, while acknowledging that these accommodations have “expanded uncontrollably, more than 80% are businesses managed by consolidators, and many operate as illegal hotels,” Ramírez said.
“It is time to enforce our laws and we must begin with the consistent registration and payment of room taxes. The Tourism Company has Act 272-2003 as amended, and Regulations No. 8395-2013 and No. 8856-2016, which enable it to impose the registration and minimum regulation of these accommodations, as well as impose fines and penalties of up to $25,000 for non-compliance,” said Ramírez.
According to Christian Rivera, vice president of the association, given that these accommodations are advertised on six business models on the internet, identifying them and communicating with their owners or professional operators is relatively easy.
“In 2017, the association collaborated with the Municipality of Cabo Rojo and more than 300 short-term independent accommodation units, and their owners were identified. Ninety percent of these accommodations belonged to non-residents of the city, which defeats the myth that the majority belong to the shared economy,” added Rivera.
The small inn sector recognizes that some of these 25,000 independent accommodations are needed to support the destination’s marketing efforts and they only pursue that they register and are monitored. To date, less than 17% are registered, the group stated.
“Conservative estimates reflect that, in 2021, stays in these accommodations could reach $450 million, and the evasion of taxes, contributions, permits, patents and regulatory fees will exceed $70 million,” said Ramírez.
Small inn owners support house sharing, the owners’ rights to rent a room in their home; and for years have advocated for the uniform application of current laws and regulations throughout the island, the representatives said.
In addition, they support the creation of municipal ordinances that officially legalize these accommodations where they are located, and that contribute equitably to maintaining the infrastructure and public services they use to operate their businesses, as is required of all businesses, regardless of its size.
“We believe that the Dorado Municipal Ordinance is based on the best practices implemented in multiple cities in the United States and have passed the judicial screening. We support that other municipalities with high tourist activity consider similar ordinances and we are at their disposal to support them with our data and references,” said Ramírez.