Currently, in Puerto Rico there are more than 32,000 STR units, most of which are necessary to maintain the growth rate of the tourism sector, and to continue dispersing tourism through the 78 municipalities. (Credit: Robwilson39 | Dreamstime.com)
On Sunday morning, we were surprised by the news of misbehaving tourists being attacked by residents around La Placita, and a toddler drowning in a pool in Aguada. In July, a 4-year-old child drowned in a pool in Patillas, and between March and August, four tourists drowned on secluded north-east beaches. In May, someone murdered two Peruvian students on Loíza Street, and in July, someone stabbed a tourist near La Placita. These victims had something in common; all were staying at unsupervised independent short-term rentals (STRs).
For the past 11 years, we have proposed the creation of a regulatory framework for the mandatory registration and regulation of STRs, commonly called “the Airbnb’s,” so owners and operators of these commercial activities be registered and meet certain basic safety, security and sanitation standards to protect their guests and neighbors, similar to measures in hundreds of important cities in the United States, Europe and around the world.
Currently, there are more than 32,000 STR units in Puerto Rico, most of which are necessary to maintain the growth rate of the tourism sector, and to continue distributing tourism across the 78 municipalities. In 2022, this activity generated more than $800 million, yet more than $100 million in permits, licenses, municipal license fees, registrations and taxes were avoided, along with around $26 million in room taxes that were not remitted to the Tourism Office. While our Treasury Department reports decreased tax revenue, conservative estimates for 2023 suggest a 15% growth in STR sales and tax evasion.
Furthermore, it has been documented that many of these STRs cause serious difficulties in our residential communities and condominiums, including but not limited to displacing residents, shrinking affordable housing, occupying parking spaces, waste mismanagement, environmental harm, excessive noise, and accelerated wear and tear of public and communal facilities. In addition, due to lack of supervision, some STRs are being used for illegal and criminal activities. To these, we must add an increase in fatal incidents involving tourists and visitors.
Unfortunately, these painful incidents have become more frequent and are spreading across the island. Meanwhile, our regulatory agencies and politicians have chosen to ignore the problem, directly or indirectly encouraging the anarchy prevailing in this transient lodging segment. Perhaps the voices of the communities and the industry have not been loud enough.
While our legislators struggle to do the right thing, large cities with high tourist activity located in Republican states, such as Florida, South Dakota, Texas, New Hampshire and Louisiana, with public policies and indices of economic liberty three to four times greater than Puerto Rico, have instituted strict regulations and mandatory registration for STRs, seeking to ensure the quality of life for their constituents, the safety of their visitors, and adequate tax collection.
Furthermore, states like Arizona, once considered an STR-friendly-state, have acknowledged their mistake and instituted new and stricter laws and regulations in the face of the anarchy and discontent created by irresponsible operators of these STRs.
Puerto Rico already has all the required laws and regulations to address these compliance gaps and only needs to formally recognize that STRs are a commercial activity. More than 85% of these STRs are fully dedicated to transient lodging and are available 100% of the time through multiple marketing channels.
Let’s hope that our inertia and indifference to these lawless activities will not hamper the progress achieved by the tourism sector to date. Most certainly, history has taught us that ignoring these compliance problems will only make them bigger and tougher to solve.
This story was written by our staff based on a press release.