Tourism leaders, traditional lodging owners back SJ ordinance regulating short-term rentals

By The Star Staff

Tourism leaders and owners of hostels, small inns, “paradores” (country inns) and bed & breakfasts are in support of a San Juan city ordinance calling for the registration and regulation of more than 4,600 short-term rental accommodations.

“We studied Ordinance Bill No. 26, and it is quite complete,” said Xavier A. Ramírez, president of the Puerto Rican Paradores and Small Inns Owners Association (ADPPHP by its Spanish initials). “Municipalities with high tourism activity know the vast majority of these accommodations are commercial enterprises with significant sales.”

He said booking platforms such as AirBnB and short-term rentals must comply with the exact requirements imposed on other businesses. For example, they must pay for permits, licenses, “patentes,” insurance and property tax, and comply with minimum safety standards.

The Municipal Code (Law 107-2020) empowers municipalities to take appropriate measures to regulate businesses within their city limits so they contribute equitably to maintain the infrastructure and public services for residents. The Bed & Breakfasts Association supported the San Juan municipal ordinance because it will complement current regulations while addressing the most critical problems created by short-term rentals. Studies show that the ‘Airbnb effect’ is similar to gentrification in that it increases the value of an area, forcing out indigenous residents due to economic reasons and contributing to a hike in housing prices.

“[The ordinance] will control the accelerated displacement of family homes in San Juan by establishing a mandatory registration, along with other requirements successfully implemented in the main U.S. cities,” said Eddie Ramírez, president of the Bed & Breakfasts Association.

Tomás Ramírez, treasurer of the ADPPHP, noted that: “Conservative estimates reflect that the short-term rental inventory on the island ranges between 25,000 and 30,000 keys. About 85% are dedicated 100% of the time as short term rentals. Professional hosts manage over 70%, and many constitute illegal hotels.”

From 2019 to 2022, short-term rental revenues exceeded $1.4 billion, and the loss of taxes and regulatory fees exceeded $300 million. As a result, organizations have recommended the mandatory registration of short-term rentals with the Tourism Company and the municipalities where they are located to ensure they comply with quality, health and safety laws.

The tourism entrepreneurs recognize that short-term rentals facilitate the dispersion of tourism to the 78 municipalities, and they are here to stay. However, they pointed out that over the past eight years, the island Legislature ignored the claims of the residential communities and recommendations to make short-term rentals comply with the law.

Short-term rentals are marketed simultaneously through different mechanisms, including digital platforms such as Airbnb, Vrbo, and Join a Join. “Certainly, collaborative agreements with digital platforms have proven to be very important, but they exclude over 35% of rental income,” said Ramírez, the ADPPHP president. “Furthermore, throughout the United States, registration of these facilities ensures their compliance and allows municipalities to supervise them.”