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Vibrant city or tourist magnet? Puerto Rico shows hidden cost of urban renewal

San Juan, Puerto Rico

WALKING through the hip San Juan neighbourhood (barrio) of Machuchal, it is hard to miss the house painted bright yellow, green and red, with a sign on the side reading "Casa Taft 169".

The building in the Puerto Rican capital had been abandoned for nearly 40 years and was declared a "public nuisance" by the municipal government before a group of local lawyers and residents rescued it from demolition.

Since buying the house in 2013, the group has been transforming it into a centre for neighbourhood meetings, talks by guest speakers, and civic workshops to help locals become more politically involved.

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"We wanted to level the playing field with the government and say, 'You need to take us into consideration'" when deciding the fate of abandoned homes in the area, explained Marina Moscoso, an urban planner and the project's coordinator.

Now residents say that quality of life is under threat from increasing tourism and rising rents that are pushing out young people and poorer families, as the US island territory struggles to recover from a hurricane two years ago that killed some 3,000 people. .

The national government has highlighted tourism as an economic engine in Puerto Rico's 2019 fiscal plan, to help the bankrupt US territory recover after Hurricane Maria caused an estimated US$90 billion worth of damage.

Attracting businesses and travellers is key to reviving parts of Puerto Rico and benefits "not only residents but also outside visitors", according to Yolanda Rosaly, spokeswoman for the Puerto Rico Tourism Company, a governmental organisation.

"The city becomes more dynamic and the value of properties rise," she said.

But residents say the tourism boost in Barrio Machuchal - an area mainly home to elderly people and low-income families - is causing overcrowding and inflating house prices, exacerbating the neighbourhood's already severe lack of affordable housing.

And Ms Moscoso is afraid that the work the community has been doing to revive places like Casa Taft was what started the process. In recent years, starting before Hurricane Maria hit, the national government has passed laws and tax cuts designed to encourage outside investors.

That includes the opportunity zones programme, which gives tax breaks for development aimed at tourism in designated low-income areas. Most states can only designate up to a quarter of their low-income neighbourhoods as opportunity zones.

But according to a report by the Centro de Periodismo Investigativo, an investigative journalism organisation, Puerto Rico Resident Commissioner to the US Congress, Jenniffer Gonzales-Colon, and lobbyists managed to get about 95 per cent of Puerto Rico designated an opportunity zone.

Officially re-zoning areas in this way makes it easier for businesses to get permits, Ms Rosaly said.

But community rights advocates say development that caters to the tourism industry tends to generate mainly low-income, low-skilled jobs and, at the same time, pushes up rental prices beyond the reach of many families.

More likely to benefit are short-term rental companies like Airbnb or Lifeafar, say housing activists, as developers take advantage of tax incentives and buy up homes with the sole purpose of renting them out to tourists.

According to data from AirDNA, an analytics organisation with offices in the US and Spain, there has been a sharp spike in Airbnb rentals in the Machuchal neighbourhood over the past five years.

"Those could have potentially been apartments for families to rent," Marina Reyes-Franco, an art curator who lived in the district of Old San Juan before moving to Barrio Machuchal, said.

Ms Moscoso said some of the recent interest in neighbourhoods that used to be off the tourist track is a result of projects like Casa Taft, when communities revitalise empty lots and abandoned houses to bring life back to rundown areas.

As the residents of Barrio Machuchal deal with the impact of rising tourism, the group behind Casa Taft's rebirth are hoping their house can provide a model for other communities. REUTERS