YouTube phenomenon Logan Paul and crypto billionaire Brock Pierce (Getty Images, iStock, Illustration by Kevin Cifuentes for The Real Deal)
YouTube phenom Logan Paul has moved into a $13 million mansion. Crypto billionaire Brock Pierce has bought an $18 million hotel. Well-heeled investors offer residents blank checks and ask them to fill in what they think their homes are worth.
Welcome to Puerto Rico, where a wave of gentrification is driving up real estate prices on an island where 43% of the population lives below the federal poverty line, according to The New York Times. Along with scintillating ocean views, investors are also chasing a powerful lure: tax breaks.
The real estate boom started a few years ago in San Juan, Puerto Rico’s capital and largest city, and has since ricocheted off the Caribbean island. Driven by tax incentives created to attract investment in the aftermath of Hurricane Maria in 2017, the influx of affluent new settlers has displaced residents who can no longer afford to live in their hometown.
Gentrification has dug bridgeheads around an American territory hit in recent years by a natural disaster, broken infrastructure, bankruptcy and an exodus of 12% of its population.
Take Rincón, a touristy surf town with spectacular sunsets on the island’s most westerly tip.
Newcomers, many of them financial and tech investors who have sought tax breaks, have rushed in, driving up rents and house prices, according to the Times.
Some are cryptocurrency traders who hold weekly happy hours at a beachfront bar. A barbecue truck that opened in August accepts Bitcoin and other cybercurrencies for its continental-style chicken.
Real estate pinball machines have also made an appearance. Some have turned homes into short-term vacation rentals, creating entire Airbnb hallways and putting homes out of reach for locals.
In 2017, a two-bedroom condo cost an average of $290,000. Now, the same unit could fetch $420,000, The Times reported. The average income in Rincón is around $19,000 a year.
“It’s like Hurricane Maria put a ‘For Sale’ sign on the island,” said Gloria Cuevas Viera, a Rincón resident who is helping lead the fight against gentrification.
Renters driven out by soaring prices along the coast can move inland to cheaper towns – but then face higher costs for gas, tolls and travel, Heriberto Martínez Otero, executive director of the Ways and Means Committee of the Puerto Rico House of Representatives and professor of economics at the University of Puerto Rico, told the publication.
Resident backlash includes recent protests against tax breaks, which favor foreigners over locals. Anti-gentrification posters, with photos of Logan and piercesay in Spanish: “This is what our colonizers look like”.
At the same time, residents selling their homes have benefited from soaring real estate prices.
Governor Pedro R. Pierluisi applauded the many investors buying luxury homes. The collapse of the island’s luxury real estate market was a major motivation for passing the tax law, he said in January.
“What was expected was an influx of people with capital to bring the real estate market to life,” he said.
[NYT] – Dana Barthelemy
Comments are closed.