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Puerto Rico Tourism Co. warns of bill to limit short-term rentals in Old San Juan

By on May 24, 2018

San Juan Mayor Carmen Yulín Cruz (CB file photo)

SAN JUAN – Carla Campos, the acting executive director of the Puerto Rico Tourism Co., the public corporation in charge of the industry’s regulations, denounced Ordinance Bill 13, which was filed with the San Juan Municipal Legislature to regulate short-term lodging rentals in Old San Juan as well as to declare a one-year moratorium for use-permit grants.

Introduced by San Juan Mayor Carmen Yulín Cruz on May 11, the bill’s purpose is to establish a regulatory policy for the short-term lodging rental market in the urban area of Old San Juan and “protect the historical-cultural environment” as well as “preserve its community and residential character.”

“After a careful evaluation of the ordinance bill before our consideration, the [Tourism] Company believes the measure has the potential to directly and negatively affect tourism, for it is known that currently short-term rentals, mostly offered through digital platforms, are essentially touristic in nature,” Campos said.

Puerto Rico Tourism Co. acting Director Carla Campos (Courtesy)

“Given the fundamental role played by the Company in the development, regulation and promotion of the tourism industry in Puerto Rico, we believe that declaring a moratorium on the granting of use permits authorizing short-term leasing contravenes the public policy of the administration of Governor Ricardo Rosselló to promote the tourism industry and economic development in general at a crucial time for our economy. The potential damage to tourism development and the economy in general would be aggravated when taking into consideration that the proposed moratorium is limited to Old San Juan, the epicenter of this industry on the island,” the official added.

Campos said the popularity that sharing economy platforms and online electronic commerce have gained over the past decade has a significant impact on the tourism industry in Puerto Rico. Landlords who rent their property or portion thereof for a period of fewer than 90 days charge and remit the tax per room to the Tourism Co., as stipulated in Act 272 of 2003.

Puerto Rico signs tax agreement with Airbnb

These rentals are referred to in the statute as short-term and the Legislative Assembly decided to place them under the Tourism Co.’s tax regulations. The corporation has reached agreements with Airbnb, the largest online marketplace short-term leases, so it remits the tax collected in Puerto Rico to the Tourism Co.

For fiscal year 2017, Tourism Co. received more than $3.5 million in taxes collected from the short-term lodging sector. To date, it has collected nearly $4.6 million in fiscal 2018 taxes.

Cruz said Thursday that Airbnb pays taxes to the state but none to the municipality, and called for its service to be regulated.

“It’s not that we’re against it, it’s that we’re in favor of our neighborhood,” Cruz told reporters, using Barcelona, Spain, as an example.”We’re going to do what cities do when they are respected. In Barcelona it is regulated. Are we less?” she questioned.

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