Housing Costs Soar in Puerto Rico Due to Short-Term Rentals

The burgeoning trend of short-term rentals in Puerto Rico, often referred to as vacation rentals, is driving up housing costs and displacing local residents, according to a report by the Hispanic Federation.

The report details the struggle of local residents to find affordable housing, highlighting the influx of short-term rentals.

On San Juan’s Loiza Street alone, 622 housing units are listed for short-term rentals. Back in 2014, the number of houses listed for short-term rentals stood at 1,000 island-wide. By 2023, the total had jumped to 25,000.

Data indicates that over 60% of apartments in major cities across Puerto Rico are now dedicated to short-term rentals.

The Hispanic Federation urged the government to implement policies that address the issue. One suggestion involves imposing higher taxes on short-term rentals, particularly those operated by individuals who essentially treat them as businesses.

The generated revenue would be used to develop and subsidize housing options for low- and middle-income communities. While not every short-term rental is occupied, the overall increase in their availability contributes to rising housing costs.

A study conducted by the University of Puerto Rico’s Graduate School of Planning suggests that a 10% increase in short-term rentals can lead to a 7% increase in regular housing rental costs and a 23% increase in property values per square foot.

As a result, a modest house in upscale neighborhoods can cost up to US$5 million.

While acknowledging the importance of tourism to Puerto Rico’s economy, Frankie Miranda, President and CEO of the Hispanic Federation, emphasizes the need for balance:

“Tourism is a vital pillar of our economy,” he stated in a press release, “but it cannot come at the expense of local residents and communities.”