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Small Inns Assoc. backs approval of new Municipal Ordinance in Isabela

The Puerto Rico Small Inns Association expressed its support of a Municipal Ordinance to regulate the more than 700 independent short-term rental accommodations operating in the coastal town of Isabela.

“We applaud that municipalities with high tourism activity, such as Dorado and Isabela, recognize that the vast majority of these independent accommodations are businesses with dozens of units and significant sales, and must comply with all the requirements, permits, licenses, patents, insurance, and minimum standards of community coexistence required of other similar and even much smaller businesses,” said Xavier A. Ramírez, president of the association.

“This ordinance will come to complement the laws and regulations already in force, and addresses the most important gaps with these businesses, by establishing elements that have been successfully implemented in hundreds of cities in the United States. We also believe that, in addition to the municipalities, the Treasury, Health, and Fire departments should get involved in this matter,” added Ramírez.

The association confirmed it has studied this issue for the past 10 years and favor the sharing economy; while recognizing that the segment of independent accommodations has expanded uncontrollably, and more than 80% of these rooms are businesses, managed by consolidators, operating as illegal hotels with 20, 30, and as many as 200 rooms.

“Tax evasion has been institutionalized through this business model, and it is imperative to enforce our laws. The Municipal Code empowers municipalities to take the most appropriate measures to register and regulate all businesses within their jurisdiction, and the Tourism Company has Law 272 – 2003, and Regulations No. 8395 – 2013 and No. 8856 – 2016, which empower it to mandate the registration and minimum standards of these accommodations; including imposing fines and penalties of up to $25,000 for non-compliance,” said Ramírez.

Christian Rivera, vice president of the association, these accommodations are advertised through seven business models on the internet, so identifying them and communicating with their owners or professional operators “is relatively simple if there is a will.”

The small inns’ owners recognize that these 25,000 independent accommodations are necessary to support the destination’s marketing efforts and are asking for them to be registered and supervised, since the vast majority do not meet the basic quality and safety requirements required by law.

“Conservative estimates reflect that during the years 2019 to 2021, stays in these accommodations exceeded $966 million, and the evasion of taxes, contributions, permits, patents, and regulatory charges exceeded $260 million,” said Ramírez.

The Association supports the sharing economy and the right of owners to rent a room or part of their home, the group said.

However, for years they have advocated for the uniform application of current laws and regulations throughout the island, together with the creation of municipal ordinances that officially register these accommodations where they are located, so that they contribute equitably to maintaining the infrastructure and services that they use to operate their companies, just as is required of all businesses, regardless of their size.

“We support the approval of this Municipal Ordinance in Isabela, and we invite other municipalities with high tourism activity, such as Carolina, Cabo Rojo, Humacao, Ponce, Rincón, Lajas, Fajardo, Vieques, and Culebra, to consider enacting similar ordinances, and we are available to support them with our data and references,” said Ramírez.

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This story was written by our staff based on a press release.

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