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The Unique Challenge of Vacancy and Abandonment in Puerto Rico

March 16, 2022

Photo: Center for Community Progress

This is an excerpt of Chapter 4 of Tackling Vacancy and Abandonment: Strategies and Impacts After the Great Recession, jointly produced by the Center for Community Progress, the Federal Reserve Bank of Atlanta, and the Federal Reserve Bank of Cleveland. It has been lightly edited and condensed for the web. In this chapter, Ivís Garcia and Luis Gallardo detail how abandoned properties offer opportunities for affordable housing post-disaster. Click here to download the full chapter and read more insights on tackling vacancy and abandonment from the nation’s leading experts.

On September 6, 2017, Hurricane Irma left half of Puerto Rico without power and thousands of people staying in emergency shelter. Only two weeks later, Hurricane Maria touched ground, causing an archipelago-wide blackout. Maria’s death toll is estimated to be between 3,000 and 4,600 persons, with most of the indirect deaths attributed to the lack of electricity for people with chronic conditions. The 2017 storms caused a combined $180 billion in damage, making Puerto Rico one of the most expensive federal recovery efforts in US history.

Around 360,000 housing units in Puerto Rico were severely affected by Hurricane Maria, and 70,000 were destroyed. It is estimated that reconstruction will cost about $33 million. Under the first federal allocation of $1.5 billion in Community Development Block Grants-Disaster Recovery (CDBG-DR), about $1 billion was allocated for new construction, rehabilitation, or reconstruction of housing for rent, homeownership, or direct rental assistance to low-income individuals and families.

Puerto Rico has the highest overall vacancy of houses that are not for sale or rent (29 percent, including seasonal homes) in the US, followed by Maine (28 percent) and Vermont (27 percent). This is more than double the 2005 home vacancy rate of 12.9 percent for all homes in Puerto Rico. In 2016, there were 334,564 vacant housing units, and of those, 257,798 were nonrecreational vacant, a category that includes those that are not on the market or abandoned or that require repair. The result was that 3 out of 10 homes were either vacant or abandoned. The increase in vacancy and abandonment is attributed to the economic and foreclosure crisis, which began in Puerto Rico in 2006, much earlier than the 2008 onset in the US, and caused massive outmigration.

To the naked eye, it seems that these vacant and abandoned buildings are an excellent opportunity to develop affordable housing in dense urban areas that are close to transportation and amenities. Still, experience has proven that it is very hard to access these buildings without state intervention and the enforcement of tax collection and housing codes or, in some cases, the use of eminent domain. Furthermore, many properties in Puerto Rico are excluded from the housing market because of title or estate issues.

For decades, the government of Puerto Rico has tried several policies to address blight that have proved to be ineffective. A historical review and analysis of laws associated with public nuisance and vacant properties demonstrate that these laws have failed because they have not been enforced, have contradicted each other, or often acted as patchworks in the absence of a comprehensive approach. The numerous laws that address public nuisance and vacancy issues need to be redesigned so that they are streamlined, easier to implement, and do not contradict each other.

Federal funding needs to be committed to creating an inventory of abandoned properties and assessing ownership, tax delinquency, and condition of the properties, among other factors. Although the action plan for using funds from CDBG-DR indicates that priority will be given to vacant properties when relocating any families affected by Hurricanes Irma and Maria, as mentioned previously, there is no strategy to address the issue. The current legal framework mostly delegates the declaration and mitigation of public nuisances to the municipalities, although these entities have largely lagged in the rollout of nuisance abatement programs.

Yet, most urban centers are the perfect place for redevelopment. First, there are environmental benefits from the perspective of sustainability if concrete structures can be preserved, and no new energy is required to construct a new building. Second, according to Puerto Rico’s Action Plan for using CDBG-DR funds, these centers tend to be far from flood zones and are ideal for rebuilding to increase resiliency, given that hurricanes are a frequent natural phenomenon in the region. Third, these vacant and abandoned structures only contribute to blight and further deter any economic development in the central city, be it residential or commercial. Finally, blight also affects safety and the quality of life.

The economic, fiscal, social, and environmental challenges that the archipelago faces force us to identify and provide new ways and practices that promote citizen, community-based, and nonprofit organizations that want to rehabilitate abandoned and public nuisance properties. But we need public participation and capacity building for local government, nonprofits, and community groups. The capacity building among these stakeholders would include providing information about various data sources, laws, and financial resources available to obtain and rehabilitate vacant and abandoned properties. In particular, in the asset-based community development spirit, the Hispanic Housing Development Corp. (HHDC) is interested in developing affordable housing in partnership with community groups and local nonprofits to transfer development knowledge to community resident leadership. This will allow these organizations to serve their communities efficiently in terms of recovery so that in the future there are no “people without homes and homes without people.”

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