The Future of Short-Term Rentals in Puerto Rico: A Stand for Progress and Collaboration

In the heart of the bustling chambers of the Education and Tourism and Culture Commission of the Senate of Puerto Rico, a pivotal dialogue unfolded. It wasn't just about policies and regulations; it was a discourse on the future of tourism, economic prosperity, and the soul of Puerto Rico itself.

Rene Acosta, the co-president and co-founder of the Viva Puerto Rico Short-Term Rental Alliance (Viva Puerto Rico), stood before the esteemed members, articulating a vision that resonated deeply with the aspirations of many. Viva Puerto Rico, a coalition of short-term rental property owners, professional managers, and tourism entrepreneurs, represents a burgeoning segment of Puerto Rico's economy.

Since its inception in mid-2021, Viva Puerto Rico has rapidly grown, boasting over 800 members collectively managing more than 8,000 units of diverse short-term rentals. Their mission transcends mere advocacy; it embodies a commitment to foster collaboration and education within the industry, propelling every stakeholder toward success.

At the core of Viva Puerto Rico's stance lies a profound understanding of the economic landscape and the intricate interplay between tourism and local prosperity. The statistics speak volumes: with over 25,000 units generating billions for the economy and sustaining tens of thousands of jobs, the significance of the short-term rental sector cannot be overstated.

But amidst the successes, challenges loom on the horizon. The call for greater regulation resonates with Viva Puerto Rico, albeit with a caveat. Acosta emphasizes the need for reasonable and intelligent regulation that addresses legitimate concerns without stifling innovation or burdening operators unnecessarily. It's a delicate balance, one that Viva Puerto Rico advocates for vehemently.

Crucially, Viva Puerto Rico confronts misconceptions head-on. Dispel the notion that short-term rentals are the root cause of housing unaffordability or population displacement, they assert, backed by empirical evidence. Instead, they advocate for proactive solutions to address genuine community concerns, coupled with a willingness to engage constructively with government entities to enhance regulations where necessary.

Amidst the legislative debate, Viva Puerto Rico throws its weight behind PC 1557, recognizing it as a nuanced and well-crafted initiative that strikes a balance between regulation and industry growth. However, they caution against proposed changes that could classify short-term rentals as commercial activities, a move they warn would have dire consequences for the sector, tourism, and Puerto Rico at large.

The numbers paint a stark picture: a potential reduction of thousands of rental units, millions in lost income and tax revenue, and a significant impact on job opportunities. It's not just about short-term rentals; it's about the livelihoods of countless individuals and the vibrancy of Puerto Rico's tourism sector.

In conclusion, Acosta underscores a fundamental truth: those who support PC 1557 as it stands are champions of progress, advocating for the orderly growth of the short-term rental segment and the advancement of Puerto Rico's tourism industry. Conversely, those who seek to impose drastic changes risk undermining the very foundations of economic prosperity and community well-being.

As the dialogue continues, Viva Puerto Rico remains steadfast in its commitment to fostering collaboration, driving innovation, and charting a course toward a brighter future for Puerto Rico and its people.

ORIGINAL TEXT PRESENTED:

BEFORE THE EDUCATION AND TOURISM AND CULTURE COMMISSION OF THE SENATE OF PUERTO RICO CHAIRED BY THE HONORABLE ADA I. GARCIA MONTES

Honorable Senator García Montes and other members of the Education and Tourism and Culture Commission. My name is Rene Acosta and I am co-president and co-founder of the Viva Puerto Rico Short-Term Rental Alliance (Viva Puerto Rico.) Viva Puerto Rico is a coalition of short-term rental (STR) property owners, professional property managers and other tourism-related entrepreneurs who support this important and growing tourism segment. Our organization was launched in mid-2021 and we already have over 800 members totaling more than 8,000 units of all types of STR such as studios, apartments, houses, villas and other unique rentals.

We collaborate and are in constant communication with the most important entities in this segment such as CTPR, DMO/DPR, Airbnb, Expedia/VRMO, Join a Join, VRMO, AirDNA, Rent Responsibly, Guesty and ReBook, the annual convention that unites the segment. of STRs. Viva Puerto Rico's mission is to lead this segment in Puerto Rico by creating an atmosphere of collaboration and education that encourages everyone to develop and achieve success with their STRs.

Currently, the STR segment has over 25K (50K rooms) units that generate about $2

Billions to the PR economy ($700M in rental income; $1.3B in visitor expenses), $36M of Room Tax to CTPR and 26K direct jobs, not counting the secondary economic impact generated by the hiring of lawyers, payments of insurance premiums, stamps and taxes paid in the purchase and acquisition of these properties, etc. That said, these are some positions from Viva Puerto Rico:

1- We favor the continuous development of the Tourism industry in Puerto Rico. An industry that produces $9.8B (8% of GDP) and employs 100K people…and growing 10-15% annually. In Tourism, the product is Puerto Rico and is used by visitors and locals...for the most part, the money stays and circulates here. Tourism is an industry from here…to here.

2- We favor greater regulation of our segment but this must be reasonable and intelligent. It must be a fair regulation that addresses the claims of some sectors and communities, but that does not put unnecessary obstacles for owners and operators that force them to go out of business.

Machine Translated by Google

3- We do not understand that STRs are the cause of the lack of affordable housing in Puerto Rico and there are several studies that demonstrate this.

4- We do not understand that the STR are the cause of the population displacement that, remotely

It is happening in some communities and this is demonstrated by several studies.

5- We are very sensitive and proactive to the genuine problems that are occurring in some communities and we are educating the segment to address these problems with internal solutions but we are also open to the central government increasing/ improving regulations for operating STRs.

Viva Puerto Rico supports PC 1557 as drafted since it is an advanced and well-thought-out project that regulates/organizes the STR segment, without changing its nature or placing onerous restrictions. PC 1557 is not perfect (none is), but it is a balanced and consensus project. Last year, several public hearings were held in the House of Representatives. In these views, the perspectives of the owners, operators, hosts, platforms, the academic sector, various municipalities, government entities, neighborhood associations, and other organizations interested in building a good project were considered. It was an inclusive and participatory process. The House built a good project and the Senate was ready to approve it but now some powerful entities not related to the business want to make some changes that would affect the segment, tourism and Puerto Rico in a drastic way.

The most significant change that certain entities are requesting is to classify STR's activity as commercial and therefore, STRs would be required to have a Single Permit to continue their operation. This change would be disastrous for the STR segment, for Tourism, for the CTPR, for the Government and therefore, for Puerto Rico. We estimate that if the project is approved with said change, STR's inventory could be reduced between 30-50%. Being forced to obtain a Single Permit in residential areas, many, many owners would choose to get out of the business completely or return to renting long term. Using the best scenario of 30%, we would be talking about 7,500 fewer units available for rental by visitors and locals which would affect our tourism offering in general, $240M less in STR rental income that is used to supplement other income and the SS , $390M less in expenses for these visitors and locals who stay in those STRs, $11M less in Room Tax for the CTPR/Government and 7,500 fewer jobs. Again, this is using 30%...do your numbers with 50%.

In summary, or as we say here, in rice and beans, legislators who are in favor of PC 1557 as it is written, are in favor of improving the order and regulation of the STR segment

but more importantly, in favor of economic progress, the growth of tourism and Puerto Rico. Those who support the change from residential to commercial are against the STR segment, tourism and the progress of Puerto Rico.

Thank you.

Rene Acosta

Co-President/Founder

Viva Puerto Rico Short-Term Rental Alliance

(787) 409-3057 / racosta11@gmail.com / www.VivaPRalliance.com