Paradores association offers recommendations for regulating Airbnb-type rentals
By The Star Staff
Puerto Rican Paradores and Small Inns Association President Xavier Ramírez made recommendations Sunday for regulating independent short-term rental accommodations, or STRs, after the Tourism Committee of the island House of Representatives said it would be investigating their proliferation.
He was referring to Airbnb-type businesses that have been proliferating in Puerto Rico but, unlike hotels, often do not pay room taxes.
“We recognize the benefits and detriments that the independent accommodation sector represents for tourism development and the visitor economy, and we advocate for a level playing field in this market,” Ramírez said in a written statement. “We believe that all short-term rental accommodations must comply with the laws, regulations, ordinances, licenses and permits applicable to all businesses; they must be prepared to protect their guests, and the communities where they settle; and they must pay taxes, and corresponding fees, in addition to the occupancy tax.”
For 11 years, the association has made “specific recommendations to the relevant agencies based on the best practices implemented in hundreds of cities in the United States to reduce tax evasion, improve the availability of affordable housing, and protect healthy coexistence in residential communities.
Ramírez proposed that, to be effective, at a minimum, new legislation should include the following:
1. A clear definition of what constitutes a short-term rental accommodation property, such as this one; “A short-term rental accommodation is a facility, house, apartment, room or property that provides, through compensation, lodging for one or more persons, for 90 days or less; and must comply with the registration requirements and obtain the required state and municipal licenses and permits; comply with applicable codes, zoning and regulations; and reflect your license or host number in your advertisements and promotion, whether written, verbal or digital.”
2. Enable the Tourism Company (PRTC) with the appropriate statutes and resources to be successful in this task.
3. Contain monitoring and compliance mechanisms.
4. Contain systems to identify accommodations in areas or properties not allowed.
5. Incentivize municipalities to support inspection.
6. Establish substantial penalties and fines for non-compliance on the part of owners, hosts and platforms.
7. Require registration of all STRs with the relevant local authorities.
8. Only the owner of the property can register it for this purpose.
9. Registration as an STR with the PRTC and the municipality where the STR is located.
10. Municipal tax, merchant registration, and other licenses required for all businesses.
11. Designate the maximum number of STR units that a person or entity can operate in each municipality.
12. Require authorization from the residents association, if it is located in a condominium or urbanization with access control.
13. Impose responsibilities on owners, hosts, platforms and online travel agents, such as:
14. Provide information to hosts and guests about the rules of coexistence and the Public Order Code applicable in the location.
15. Ensure the timely collection and remittance of the occupancy tax.
16. Advertise only registered properties, and include the host number in all advertisements.
17. Periodically supply certain information and statistics to the PRTC, the island destination marketing organization, the Treasury Department and the municipality.
18. Assign an occupancy tax rate of 11 percent, and provide 2-3 percent for the municipality where the STR is located.
19. Extend to the STR the current process of inspection for the complete and timely payment of the occupancy tax.
20. Expressly prohibit the illegal operation of hotels and define the maximum number of independent lodgings under the same owner, operator or entity, which would constitute a commercial hotel operation.