Housing Development is a significant indicator of an economic resurgence. It reflects investor confidence and directly benefits other sectors like infrastructure, services, manufacturing and retail. It is a clear reality that housing construction must be an essential part of a sustainable economic strategy that requires both a clear public policy focus and long-term development plan.
Since 2006 the Puerto Rican housing sector has been severely affected by a variety of elements that sparked a serious local economic downturn. All where augmented by a global recession, government bankruptcy and an inevitable population decrease. Bank foreclosures, plus a significant amount of vacant homes, have adversely reduced home values and most importantly eroded local consumer confidence.
Still, according to a recent study by Estudios Técnicos, the housing market has dramatically improved. Since September 2017, after both hurricanes Maria and Irma, the market registered a staggering 78% increase in new residence sales and a 17% increase in resold homes. As we begin to see a slow but steady Puerto Rican housing economic resurgence, this increase, even though positive for the Island, is mostly organically fueled by the lack of adequate housing supply and not necessary by a clear housing planning strategy.
Although 67% of Puerto Rican residents in the island own their properties (which is the highest level of home ownership in the United States) we still have several local industry challenges to address. These include the reality that over 65% of housing construction was developed and built before 1980, and that over 55% of home construction has been done informally and organically. Moving forward, it is important that the housing and development industry continues to adapt rapidly to the socioeconomic, construction and demographic needs of today.
There lies the opportunity, there is a need to change the perception of housing development, from house creation to community development. It is both good planning practice and good for business. Standalone properties that are not part of a cohesively planned, existing, redeveloped or newly conceived community, even if remodeled up to code, might still be a danger for most families that invest in them. Resiliency development, forces all of us to rethink our dwelling vision. Anyone might be safe in a property during a hurricane, but not if isolated from other common use areas and communities during the aftermath. This is part of today’s consumers requirements for long term investments. Building for the sake of building might help the economy short term but not long term.
A successful housing industry, as part Puerto Rico’s economic growth, reflects investor confidence. If we combine the importance of quality of life, together with job creation, we can create a more sustainable economy for the Island. By developing new communities and revitalizing existing ones we will be able to attract individuals to invest during the reconstruction period and keep them in the island after the reconstruction period finalizes. It is easier to walk away from a house than it is to walk away from a community. Remember, if you build it WELL, they will come…and STAY.