Huge cranes loom over downtown Los Angeles, and the streets are filled with the sounds of construction as gleaming new mixed-use buildings, luxury apartments, and office towers take shape. It would seem to be a sure sign of a city on the rise—except that those streets are also filled with people sleeping on the sidewalks, some in brightly colored tents, some sprawled on the pavement.

What has happened to cause so many homeless people—more than 34,000—to become part of the streetscape in this happening city? Why is it that, in a period of strong economic growth, LA and so many other U.S. cities are trying to cope with a homelessness crisis some have called the worst since the Great Depression? This is true especially for “thriving” hot-market cities, where a combination of skyrocketing housing costs, slow income growth, and a lack of housing options has increasingly led people seeking shelter to make use of common spaces like parks and public squares.

As cities create plans to deal with the urgent day-to-day needs of trying to shelter people and provide emergency health care and law-enforcement services, planners are also collaborating with their colleagues in housing and social services on logical longer-term approaches. Last fall, at the Big City Planning Directors Institute in Cambridge, Massachusetts—hosted by the Lincoln Institute of Land Policy, the Harvard Graduate School of Design, and the American Planning Association—many planning directors said rising homelessness has complicated agendas and budgets, particularly in cities where economic inequality has deepened in recent years. They were eager to learn what other cities were doing to address this issue.

The answer to that question is as complicated as the crisis itself. While some cities are investing heavily to expand the number of traditional shelter beds they provide, others are trying new approaches, from converting motels in Los Angeles to building tiny home communities in Seattle to encouraging unusual public-private partnerships in New York City. No city has found the perfect solution, but some are making significant—and instructive—progress.

How Did We Get Here?

During a one-night count carried out across the nation in January 2017, 553,742 people in the U.S. were experiencing homelessness, according to the United States. Department of Housing and Urban Development (HUD). Of those, about a third were families including children. More than 40,000 of the people counted were unaccompanied children and young adults, and another 40,000 were veterans. Thirty-five percent of the total number of people counted were “unsheltered,” meaning they were living outside with no access to emergency shelters, transitional housing, or safe havens (USDHUD 2017).

Overall, homelessness is declining—it has gone down 13 percent since 2010—but last January’s point-in-time count revealed something significant: For the first time in seven years, the number of people counted rose compared to the prior year, by 0.7 percent. And according to HUD, nearly all of that increase occurred in cities.

Everyone experiencing homelessness has their own story of how they ended up on the street, whether due to poverty, job loss, eviction, gentrification, domestic violence, drug addiction, medical bills, or any number of other reasons. Race—and inequities in the way services are provided—is also a factor, according to the National Alliance to End Homelessness; African-Americans, for example, make up 13 percent of the general population but more than 40 percent of the homeless population.

A generation or two ago, fewer people ended up homeless—in part because cities offered more diversity in low-cost housing. Common options then included rooming houses, “granny flats” or in-law units, homes where families could legally “double up,” and single-room-occupancy (SRO) apartments. These options generally disappeared with urban renewal, neighborhood redevelopment that brought higher-priced housing, and zoning that favored occupancy limits.

“One of the things that led to a dramatic increase in homelessness in the 1980s was cities getting rid of things like SRO housing,” says Alan Mallach of the Center for Community Progress. Mallach, a former city planner who has written policy reports for the Lincoln Institute on vacant properties (Mallach 2018) and legacy cities (Mallach 2013), says some places are beginning to consider reinstating that type of housing. In Los Angeles, for example, a nonprofit called SRO Housing Corporation has created dwellings for more than 2,000 formerly homeless people and has 400 homes under development.

Mallach cautions that even “affordable housing” is often unaffordable in booming cities, because the rent is typically based on a percentage of area median income (AMI). As incomes increase, so do the rents that are pegged to them. The main reason people become homeless today, according to the National Alliance to End Homelessness, is because they cannot find housing they can afford (figure 1).

In 2017, 8 of the 10 states with the highest median housing costs also had the highest rates of homelessness, according to San Francisco–based data analysis company The DataFace (figure 2). Since the Great Recession, trends contributing to a lack of affordable housing have included rising costs for land, construction, and maintenance; tighter financing for home builders; and a surge of interest in urban living, resulting in construction of mostly higher-end housing in city cores.

At the same time, new construction has not kept pace with job growth. Analyzing federal data on building permits and employment, a July 2017 report by Apartment List found that only 10 of the nation’s 50 largest metro areas had produced enough new housing to support an influx of workers (Salviati 2017). San Francisco, for example, built just one new home for every 6.8 new jobs from 2010 to 2015. Especially in tech hubs, new job creation has stoked a demand for housing, and rent prices have lit up with the lack of supply. San Jose, which had the largest undersupply of new construction among the 50 largest metro areas, also had the most rent growth: 57 percent, according to the report.

Federal Constraints, Local Innovations

This confluence of factors has created a startling reality: According to a recent report from the National Low-Income Housing Coalition, eight million Americans pay more than half their income on rent, a larger percentage of the growing rental population is extremely low-income renters, and the nation has a shortage of 7.2 million affordable rental units (NLIHC 2018).

HUD funding for homeless services reached record levels last year. HUD’s housing programs serve over one million people each year, and HUD provides housing subsidies to about 4.7 million very low-income households, which represents about 80 percent of its total budget. But changes are afoot: The President’s proposed FY19 budget included $8.8 billion in HUD cuts, though the Senate and House appropriations committees both rejected the cuts and voted for increased funding over 2018. Final votes could be delayed until after the November elections, according to the Center on Budget and Policy Priorities, a Washington, DC–based nonpartisan research and policy institute focused on reducing poverty and inequality. Meanwhile, the 2017 federal tax bill significantly reduced the value of the low-income housing tax credit, a source of long-term funding for affordable housing. According to analysis published in the New York Times, that could mean nearly 235,000 fewer apartments built over the next decade (Dougherty 2018).

With so much uncertainty at the federal level, cities are finding—and financing—their own ways forward. Increasingly, that means moving beyond stopgap measures to provide more permanent affordable housing, said Steve Berg, vice president for programs and policy at the National Alliance to End Homelessness. These longer-term policies, he said, should ensure investment of public dollars to “fix the larger affordable housing problem.”

“Housing first” is a strategy that essentially bypasses shelters and seeks to place people directly into affordable housing with support services. Research has found housing first to effectively alleviate homelessness for families experiencing temporary lack of shelter, for chronically homeless individuals, and for those with substance abuse and mental health issues. Although this approach can cost more, advocates say that by creating permanent housing, cities ultimately spend less on shelters and emergency services.

Los Angeles Bets on Motels and Municipal Bonds

A surge in homelessness in Los Angeles and other West Coast cities with severe affordable housing shortages was almost entirely responsible for last year’s national uptick in the number of homeless individuals, said HUD officials. In 2017, LA gained 42,470 new residents and hit the four million population mark; its homeless population spiked 20 percent to 34,189, with a total of 55,188 in Los Angeles County, according to HUD (USDHUD 2017). A one-night count in January 2018 conducted by the Los Angeles Homeless Services Authority showed the city’s homeless count had declined 6 percent, to 31,285, with 22,887 of those people unsheltered. While HUD requires cities to count their total homeless population every other year, LA—second only to New York in the size of its homeless population—elects to conduct an annual tally.

In April 2018, the LA City Council declared an emergency shelter crisis, clearing the way for Mayor Eric Garcetti’s plan to fund $20 million for new emergency shelters. His 2018–2019 budget, approved by the city council in May, will invest more than $442 million in permanent housing, temporary shelters, services, and facilities. Garcetti’s A Bridge Home plan is setting up temporary shelters on city parking lots or vacant city-leased lots across LA. Tents, trailers, and other structures will temporarily shelter as many as 100 individuals at each site—potentially 6,000 people per year who are awaiting permanent housing.

Beyond emergency shelters, the city is using funds from Measure HHH, a ballot initiative that three-quarters of LA voters passed in November 2016, committing the city to raising $1.2 billion in bonds for construction of 10,000 units of permanently affordable housing in the next decade. The city will spend more than $238 million of HHH funding this year to build 1,500 new homes at 24 project sites. In April, the city council approved two additional programs to support the effort to increase the city’s affordable housing base: one that streamlines the development process for projects that include supportive affordable housing, and another that allows LA’s 10,000 motel rooms, many of them old and in poor shape, to be converted into affordable housing with supportive services. Finally, in one of the more creative approaches to both homelessness and land use, the city has launched a pilot program that offers financial support to homeowners in some single-family neighborhoods who agree to build or upgrade small dwellings in their backyards for the purpose of housing people who don’t have homes.

Seattle Finds a Big Solution in Tiny Homes

Seattle’s homeless crisis made national headlines earlier this year when the city got into a scuffle with Amazon over a corporate head tax that would have funded social services and outreach. But the extent of homelessness in the Emerald City isn’t news to anyone who has been paying attention, especially city leaders. A January 2017 count documented 8,522 homeless people, 45 percent of whom were living unsheltered on the streets.

“The affordable housing crisis is feeding the homeless issue such that we can’t keep up,” said George Scarola, Seattle’s strategic advisor for homelessness response, at a standing-room-only session at the Urban Land Institute annual meeting in Los Angeles last year. In 2015, former Seattle Mayor Ed Murray declared a state of emergency on homelessness and called for building 1,000 tiny homes to replace tent cities. Since then, eight tiny-home villages have been built throughout the city as temporary shelters until permanent affordable housing becomes available. This approach is also being used in cities including Detroit, Dallas, and Syracuse.

Each tiny house in Seattle is built by volunteers and costs between $2,200 and $2,500. The houses are paid for by donations and by the Low Income Housing Institute (LIHI), a local nonprofit that oversees the villages and owns and operates about 2,000 units of affordable housing in the region. The city or LIHI owns the land for seven of the villages, which each have about 35 tiny homes. A local church owns the land for the remaining village, which has 14 tiny homes that LIHI also manages. LIHI said some 1,000 people are served over the course of a year by the 250 tiny homes it manages. The organization has two more villages in the pipeline.

The 8-by-12-foot homes are insulated and have heat, electricity, and locks. Because they measure under 120 square feet, they are not considered dwelling units under the International Building Code and are not required to go through the city’s permitting process. Many residents are single men and women or couples, though some villages provide two homes for families with children. Residents share common on-site bathroom, kitchen, and laundry facilities. They pay for utilities and pitch in with chores. LIHI employs case managers paid for by the city, while daily operations are self-managed by the residents.

“For folks who have been homeless for 10 years, it’s an easier transition” than an apartment, said Scarola at the ULI meeting. “People take pride in keeping these homes neat and in being part of the community.” Though the tiny home villages serve as temporary housing for only a fraction of the city’s homeless population, they’re serving an important role, he said. “More permanent supportive housing is better than ‘two hots and a cot,’” meaning a shelter’s two hot meals and a bed, Scarola said. “Overnight shelters are expensive, particularly if you’re serving the same people over 10 years.”

What cities need, Scarola said, is affordable housing that is “smaller, built faster, with many more units.” In 2017, the city invested over $68 million in rental assistance programs, bridge shelter, and low-income housing and in 2018 planned to increase that amount to $78 million. During her election campaign last fall, Seattle Mayor Jenny Durkan promised 1,000 additional tiny houses at an estimated cost of $10 million. Last December, after being elected, she announced city investments on a much larger scale: $100 million for affordable housing construction and preservation and home buyer assistance. These funds will help build 896 apartments in 9 new buildings, preserve 535 apartments in 4 buildings, and construct 26 new homes for low- to moderate-income families. Three of the new affordable-housing projects will provide 195 units of permanent supportive housing for formerly homeless people and people with chronic mental illness.

As for that corporate head tax: the Seattle City Council voted 7–2 to repeal it less than a month after approving it unanimously. The tax had promised to produce $47.5 million annually for the next five years to help address the homeless crisis.

Lessons from the City That Never Sleeps

New York is the nation’s most populous and densest city, with 8.6 million residents in 5 boroughs encompassing about 300 square miles. It also has the nation’s largest homeless population—approximately 76,500, an all-time high, according to the January 2017 HUD count. Most homeless New Yorkers aren’t as “visible” on the street as they are in other cities because of the city’s “right to shelter” law, a policy that grew out of court rulings in the 1970s. New York, Washington, DC, and Boston are among the few cities in the United States that are required to provide temporary housing for homeless people. As a result, New York City sheltered 95 percent of people needing homes in 2017, while Los Angeles sheltered only 25 percent, according to HUD (USDHUD 2017).

In January 2017 and January 2018, the city counted approximately 60,000 residents in municipal shelters and 3,000-plus residents who were unsheltered. (The HUD figure is higher because it includes people served in shelters operated by religious and nonprofit agencies, as well as other government agencies.) Families comprise 70 percent of the municipal shelter population.

The city tries to place people close to their support networks, in the communities they call home, to improve the odds of quickly stabilizing lives. It also provides dedicated facilities for families, men, women, unaccompanied youth, and LGBTQ residents. In 2017, New York City spent $1.7 billion in city, state, and federal money to aid its homeless population.

In New York, rising homelessness and dwindling affordable housing have been on twin trajectories for the past two decades. From 1994 to 2012, while the city swelled by more than a million new residents, it lost 150,000 rent-stabilized apartments, putting low-income residents at particular peril in the competition for housing. The city’s homeless population also more than doubled during that time, increasing 115 percent. Between 2000 and 2014, the city’s median rent increased by 19 percent and household income decreased by 6.3 percent in real dollars. Two-thirds of households now rent, and in June 2018, median rent was more than twice the national average—$2,900, according to Zillow.

“The way you get homelessness is the gap between rent and incomes,” confirmed Steve Banks, commissioner of the city’s Human Resources Administration (HRA), who oversees the Department of Social Services (DSS) and the Department of Homeless Services (DHS). After two decades of rising homelessness, he said, the number of people housed in DHS shelters is now stable and beginning to decline as the city makes headway in “keeping people in their homes and moving homeless people out of the shelter system and into more permanent housing.”

According to Turning the Tide on Homelessness in New York City, a 2017 municipal report, new policies have indeed led to measurable progress on this front (CNY 2017a). In December 2015, HUD announced the city had ended chronic homelessness among veterans. From 2016 to August 2018, an outreach program secured transitional and permanent housing for 1,815 street homeless people. The city has opened 15 new shelters as part of a plan to close old shelters in poor condition and build 90 new ones. At the same time, the overall number of shelter facilities has been reduced by 25 percent, from 647 to 492, as new shelter options have been developed and more people are housed. Since 2014, 94,300 people have moved from the shelter system into more permanent housing, and 161,000 households have been prevented from falling into homelessness through approaches such as an enhanced rent voucher program, free anti-eviction legal services, and more supportive housing. During that same span, the city financed the creation and preservation of over 109,700 affordable homes.

Enacting Solutions in NYC

New York City is successfully using strategies such as helping nonprofit organizations buy affordable rental housing to prevent displacement, rezoning land for residential use and greater height and density, taxing unused land at a higher rate, and investing in modular micro-apartment buildings. Deputy Commissioner for Development Molly Park, who oversees the Housing Preservation and Development (HPD) division, offered a word of caution. Homelessness is “a very nuanced situation,” she said. “We can’t draw a direct correlation between homelessness and these new affordable housing programs.”

Still, New York has much to offer other cities struggling with these complex issues.

Housing New York

The guiding plan developed during Mayor Bill de Blasio’s first term, Housing New York, defines priorities that include creating pathways to permanent housing for homeless residents, identifying more affordable housing for a growing senior population (another 400,000 are projected to reach senior status by 2040), and providing more accessible housing for people with disabilities. The mayor’s housing plan called for adding or preserving 200,000 affordable units by 2024, but the city’s accelerated pace put it on course to meet that goal by 2022, two years ahead of schedule; in October 2017, de Blasio released Housing New York 2.0, an updated plan to preserve and create an additional 100,000 units of affordable housing by 2026, or 300,000 units total at a rate of 25,000 per year (CNY 2017b).

“We have a robust system in place and we’re ramping up,” said Park of HPD. From 2014 to January 2018, the city spent $3.3 billion in direct subsidies to preserve or create a total of 87,557 affordable homes, she said. Most of this housing includes some level of construction, from light-touch rehabilitation such as replacing a boiler or roof to building new units, she said. The vast majority of homes are multifamily rentals, with some home ownership, including small buildings for between one and four families. Though publicly financed and regulated, all are owned and operated by private nonprofits, development firms, or private multifamily project owners, such as co-op tenant associations.

Some of these projects preserve existing affordable housing that was created in the 1950s and 1960s under the Mitchell-Lama Residential Program, in which the city built 70,000 rental and co-operative apartments for lower- and middle-income tenants. The program’s affordability tax credits expired, however, and nearly half of the units have exited the program, mostly because rising property values made market-rate rents more attractive than the program’s tax breaks. The city has committed $250 million to preserving 15,000 Mitchell-Lama co-ops and is working with owners to make repairs and restructure debt.

Affordable-Housing Hybrids

Housing New York 2.0 earmarked 15,000 affordable units for homeless people, and 8,948 homes have so far been created for people coming out of the shelter system. These efforts include some highly innovative models. In the Bronx, Landing Road Residence provides affordable apartments subsidized by two floors devoted to a 200-person shelter. With city support, the Bowery Residents Committee developed, owns, and operates the $62.8 million building, which provides 111 studios for formerly homeless people and 24 affordable one- and two-bedroom apartments available by lottery to the community. In the Inwood neighborhood of Upper Manhattan, the city, the New York Public Library, community organizations, and an affordable housing developer are codeveloping The Eliza, which will include 175 deeply affordable apartments, a new library branch, and a universal prekindergarten facility. Apartments will be reserved for individuals and families with a range of low-income levels, including formerly homeless people.

The city is also partnering with local nonprofits and affordable housing developers to convert temporary shelter apartments into permanently affordable housing. Since 2000, New York had used “cluster apartments” as a stopgap shelter measure, at its peak paying market rates to rent 3,600 apartments in low-income neighborhoods. In 2016, the city began phasing out cluster apartments and instead placed people in commercial hotels, where it cost the city as much as $530,000 per night to shelter 7,800 people, according to a 2017 city comptroller report. The city is now helping to buy and renovate about a third of the remaining cluster apartments and converting them to permanent housing for formerly homeless and low-income New Yorkers, taking ownership by eminent domain if necessary.

“We’re trying to make sure we’re building for very low-income families who are not in homeless shelters but are at risk of becoming homeless,” said Park. In 2017, nearly half of all new homes produced were for people with incomes at 50 percent of AMI or below, she said. “I see that as a homeless preservation tool.”

An affordable housing lottery system now accepts 700 applications for every available unit, according to Matthew Creegan of HPD’s press office. That number is a big improvement over the 1,000 applications per unit HPD received a couple years ago, he said: “Outreach, education, and the growing number of new units built have reduced the need.”

Mandatory Inclusionary Housing

To ensure that every borough would have affordable housing opportunities, the city created a new mandatory inclusionary housing (MIH) program that is activated when an area is upzoned to increase commercial use and density. A voluntary inclusionary housing policy in effect since 1987 had allowed developers a density bonus of additional height for new construction, substantial rehabilitation, or preservation of permanently affordable housing. The new MIH policy, adopted by the city council in March 2016, requires developers who want to increase floor area in rezoned areas or areas requiring special permits to provide typically 25 to 30 percent of units as affordable, for a range of income levels. Developers also have limited options to create affordable housing off-site at another location, or to pay “in lieu” fees into a housing fund.

The policy aims to increase neighborhood economic diversity by ensuring that any new housing built would also include units affordable for a range of income levels, from 40 percent to 115 percent of AMI, which in 2017 was about $93,000 for a family of three. After setting aside the requisite affordable units, the rest can be rented at neighborhood market rates.

“The mandatory inclusionary housing policy has made a difference,” said Park. By 2018, the MIH policy had created 4,000 new permanently affordable apartments, in addition to those created by neighborhood rezoning. The MIH policy is somewhat controversial, as the 51 city council members can determine level of affordability on a project-by-project basis and have the legal ability to oppose projects. At least a couple of city councilors have exercised this right, for example, by blocking building approvals on the basis of opposition to additional building height. Some major developers also have been hesitant to risk upzoning or applying for special permits that would trigger the MIH requirement. But revisions to the policy, including the introduction of fast-track approvals, have put things back on track.

Rezoning for New Affordable Housing

“We’re employing whatever land we have for housing,” said Purnima Kapur, until recently the executive director of the New York City Department of City Planning (DCP). “It becomes a balance: with limited subsidies and land available, we’re always looking for opportunities, and that typically happens with higher density.”

The city is rezoning industrial areas near established neighborhoods that have infrastructure such as sewers and “areas in which urban renewal razed affordable multifamily buildings, such as East New York, where we can up-zone and allow for bigger apartment buildings,” said Kapur. DCP is leading an integrated community planning approach with various city agencies to plan for elements such as schools, transportation, workforce training facilities, and open space. “We’re looking at a framework that would continue to allow for industrial uses as well as new mixed uses including housing,” she said. A lot of waterfront was traditionally mixed-use, “and with new tech and creative firms wanting to relocate there, we’re envisioning more housing for live-work and commercial uses.”

New neighborhood plans that allow for upzoning for mid- and higher-density are underway in East New York, Brooklyn, and Far Rockaway, Queens, among other neighborhoods, said Kapur. Two Brooklyn neighborhoods under consideration include Gowanus, an old waterfront area now enlivened by a hip mix of art and culture groups and maker industries, and Brownsville, where 900 affordable homes will be developed on multiple city sites for households including extremely low-income, formerly homeless, and low-income senior residents. The mixed-use projects feature amenities such as a cultural center, senior center, supermarket, and rooftop greenhouse.

In its search for more land, the city is trying to unlock the potential of vacant lots long considered too small or irregular for traditional housing stock to be developed with innovative smaller homes, said Kapur. It is planning affordable housing for seniors on parking lots at existing Mitchell-Lama and HUD-regulated complexes. In highly transit-accessible areas, the city is enabling the development of mixed-income buildings for small households, including studios and units with shared cooking spaces, and is relaxing some zoning restrictions on apartment size. The city is also looking at reclassifying residentially zoned vacant lots to increase the owners’ tax bills and incentivize them to develop the sites for housing.

With support from a $1.65 million Enterprise grant, the city is also helping expand community land trusts (CLTs) citywide with nonprofit organizations, so community members can own and manage development on parcels of land. The grant helped to create the first citywide land trust, called the Interboro CLT, and to educate neighborhood organizations on how they can implement CLTs in their own communities.

Modular Housing

To reduce the cost and speed up construction of affordable homes and to respond to changing demographics, Housing New York 2.0 called for capitalizing on advances in technology and innovative design to expand modular building and micro-units. HPD has launched a program encouraging advanced modular construction with updated design guidelines. Housing New York 2.0 referenced New York’s first micro-unit apartment building, Carmel Place in Kips Bay, Manhattan. Opened in 2016, the building has 55 micro units, including 8 reserved for homeless veterans and 14 affordable units that drew 60,000 lottery applicants. The 260- and 360-square-foot apartments were built with prefabricated modules transported from a Brooklyn warehouse and ‘stacked’ on a traditionally constructed foundation with ground-floor utilities. The city is piloting additional modular construction through the Build-It-Back program and has built nearly 100 single-family modular homes that cost 25 percent less than conventional construction. In May, HPD issued a competitive RFP for 100 percent affordable multifamily housing projects in East Bay, Brooklyn, that would use modular construction to further test whether the benefits of this approach are achievable at scale.

Housing for the Future

As cities across the country seek solutions to the homeless crisis and the severe shortage of affordable housing, New York City has many lessons to offer. The city has now seen several strong years of housing production that includes affordable housing, notes Kapur. But to address a root cause of homelessness, she said, the city must sustain this pace over time to keep up with demand for housing and reduce upward pressure on rents. This requires planning ahead for the capacity for future growth.

Perhaps one of the most valuable lessons for these booming cities is captured in Kapur’s reflection on the necessity of committing to long-term policy shifts and investments. “We continue to look ahead” to a city with 9 million by 2040, said Kapur, “so we’re focused on the near and distant future. We realize we need to do this on an ongoing basis. It’s not a five-year plan.”

Kathleen McCormick, principal of Fountainhead Communications in Boulder, Colorado, writes frequently about healthy, sustainable, and resilient communities.

Photograph: Low Income Housing Institute

References

Benedict, Kizley. 2018. “Estimating the Number of Homeless in America: Statistics Show That America’s Homeless Problem Is Getting Worse.” The DataFace. January 21. http://thedataface.com/2018/01/public-health/american-homelessness.

CNY (City of New York). 2017a. “Turning the Tide on Homelessness in New York City.” New York, NY: Office of the Mayor, Office of the Deputy Mayor for Health and Human Services, Office of the Commissioner of the Department of Social Services (February). https://www1.nyc.gov/assets/dhs/downloads/pdf/turning-the-tide-on-homelessness.pdf.

CNY (City of New York). 2017b. “Housing New York 2.0.” New York, NY: Office of the Mayor, Office of the Deputy Mayor for Housing and Economic Development (November). https://www1.nyc.gov/assets/hpd/downloads/pdf/about/hny-2.pdf.

CNY (City of New York). 2018. “One NYC 2018: Progress Report.” New York, NY: Office of the Mayor, Office of the First Deputy Mayor (April). https://onenyc.cityofnewyork.us/wp-content/uploads/2018/04/OneNYC_Progress_2018-2.pdf.

Dougherty, Conor. 2018. “New Tax Law Likely to Curtail Affordable Rent.” New York Times, January 19, A1. https://www.nytimes.com/2018/01/18/business/economy/tax-housing.html.

Mallach, Alan. 2018. The Empty House Next Door: Understanding and Reducing Vacancy and Hypervacancy in the United States. Cambridge, Massachusetts: Lincoln Institute of Land Policy. https://www.lincolninst.edu/publications/policy-focus-reports/empty-house-next-door.

Mallach, Alan. 2013. Regenerating America’s Legacy Cities. Cambridge, Massachusetts: Lincoln Institute of Land Policy. https://www.lincolninst.edu/publications/policy-focus-reports/regenerating-americas-legacy-cities.

NLIHC (National Low Income Housing Coalition). 2018. “The Gap: A Shortage of Affordable Homes.” Washington, DC: National Low Income Housing Coalition (March). http://nlihc.org/sites/default/files/oor/OOR_2018.pdf.

Salviati, Chris. 2017. “Housing Shortage: Where Is the Undersupply of New Construction Worst?” Apartment List. July 26. https://www.apartmentlist.com/rentonomics/housing-shortage-undersupply-of-new-construction/.

USDHUD (U.S. Department of Housing and Urban Development). 2017. “The 2017 Annual Homeless Assessment Report (AHAR) to Congress.” Washington, DC: U.S. Department of Housing and Urban Development, Office of Community Planning and Development (December). https://www.hudexchange.info/resources/documents/2017-AHAR-Part-1.pdf.

Puerto Rico ya estaba en la cuerda floja cuando el huracán María llevó su destrucción, en septiembre de 2017. El territorio de EE.UU., que alberga 3 400 000 ciudadanos estadounidenses, estaba en bancarrota y perdía población. Casi la mitad de las viviendas de la isla no cumplían con las normas, la red eléctrica era ineficaz, inestable y estaba en ruinas, y la economía rengueaba debido a la increíble deuda y los salarios públicos inflados.

El huracán masivo de categoría 4 tocó tierra en ese escenario, y dañó o destruyó la mayoría de las viviendas, inhabilitó las telecomunicaciones y diezmó la infraestructura en casi toda la isla. Gran parte de Puerto Rico estuvo sin electricidad durante más de seis meses, el servicio de telefonía celular era intermitente, y los residentes y líderes se quejaban de la escasa respuesta ante el desastre por parte del gobierno federal.

Un estudio de Harvard publicado en el New England Journal of Medicine estima que son al menos 4645 las muertes que se pueden relacionar con el huracán y sus consecuencias inmediatas. Este número es 70 veces superior al del cálculo oficial (Kishore et al., 2018).

Para mayo de 2018, la electricidad volvió para todos, salvo para unas 20 000 personas, aunque esto no es de fiar, y el gobierno federal anunció que Puerto Rico recibiría USD 18 500 millones del Departamento de Vivienda y Desarrollo Urbano de EE.UU. para reconstruir las viviendas y la infraestructura dañadas. Este subsidio es el más importante en la historia de la agencia, y se agregó a USD 1500 millones que ya había otorgado y más de USD 3000 millones asignados como respuesta para la recuperación por parte de otras entidades federales, como la Agencia Federal para el Manejo de Emergencias (FEMA) y el Cuerpo de Ingenieros del Ejército.

Pero este total no llega a los USD 94 400 millones que solicitó el gobernador Ricardo Rossello al gobierno federal para reconstruir la isla. Incluso meses después de que se realizaran reparaciones permanentes en los estados continentales castigados por el huracán, en la isla se seguían viendo toldos azules (que también tardaron en llegar) sobre los techos.

Al llegar la primavera de 2018, Puerto Rico trastabillaba para pasar de la etapa de asistencia y respuesta masiva a una de planificación de recuperación a mediano y largo plazo, incluso a la vera de una nueva temporada de huracanes. Pero ¿cómo será la recuperación en una isla que estaba tan vulnerable desde antes del desastre? ¿Cómo hará este territorio autónomo insolvente, que experimentó un éxodo de unos 20 000 residentes tras el huracán, para encarar las mejoras en la reestructuración de la deuda, la recaudación de impuestos, la planificación de uso del suelo, el control de inundaciones y la distribución energética?

Esta aún es una pregunta muy abierta. “Parece que el proceso de planificación no tiene un líder”, indicó Rubén Flores-Marzan, ex presidente de la junta de planificación de toda la isla, a un grupo reunido en el Centro de Estudios Puertorriqueños de Hunter College, en Manhattan, en una “cumbre diáspora” reciente para reconstruir la isla. “¿Quién está a cargo aquí?”.

La respuesta sigue resonando en la isla y en los corredores de poder de la tierra firme, mientras los grupos comunitarios, desarrolladores, financieros y funcionarios del gobierno compiten por influenciar el proceso y destacarse.

“En este momento, la falta de claridad es un problema importante”, dijo Robert B. Olshansky, profesor de planificación urbana y regional de la Universidad de Illinois, en Urbana-Champaign. “Es cierto que esperan volver a construir algo mejor. Eso incluye una red eléctrica más resistente, un nuevo código de construcción y mejoras en la gobernanza y la financiación pública, entre otros. . . . Estoy seguro de que se harán algunas mejoras, pero es demasiado pronto para decir cuáles serán”.

En After Great Disasters: An In-depth Analysis of How Six Countries Managed Community Recovery (Después de grandes catástrofes: un análisis detallado de cómo seis países lograron recuperar su comunidad), publicado por el Instituto Lincoln, Olshansky y la coautora, Laurie A. Johnson, sugieren que la reconstrucción tras el desastre representa una oportunidad única para reparar viejos problemas (Johnson y Olshansky, 2017).

Por cierto, Puerto Rico, que carga con más de una década de desmejoramiento, necesita una gran reparación y un plan sólido de resistencia, dado que los efectos del cambio climático seguramente seguirán azotando la isla. Los meteorólogos de EE.UU. han anticipado una temporada activa de huracanes para 2018: se esperan hasta nueve. 

Durante muchas décadas, mientras el desarrollo del suelo en la infame expansión urbana descontrolada y las zonas rurales informales de Puerto Rico avanzaba a toda máquina, los planificadores solían ser ignorados. Ahora, esperan que los escuchen más. “De a poco, se van dando cuenta de que la planificación tiene mucho para ofrecer, y deberíamos ser parte de ese proceso”, explicó Carmen M. Concepción Rodríguez, del Centro de Investigaciones Sociales de la Universidad de Puerto Rico, en la cumbre de Hunter, mediante videoconferencia desde la isla. 

Flores-Marzan, quien ahora es planificador en el pueblo Ware, Massachussets, espera que la isla también llame a sus exiliados mientras intenta recuperarse. Hoy, casi seis millones de puertorriqueños viven en tierra firme en Estados Unidos. “Es evidente dónde podrían lograr pequeñas victorias si involucraran a la diáspora, y no lo están haciendo”, dijo. Sin embargo, hay esperanza: “Debemos mantener la esperanza; de lo contrario, perderemos la isla”.

Primero, la electricidad 

Lo primero que se debe hacer es restablecer la electricidad. La prolongada ausencia de energía ha tenido sus consecuencias en Puerto Rico: obstaculizó la recuperación y exacerbó la miseria previa. Especialmente en las zonas rurales, las personas se pasaron meses alimentando equipos médicos con generadores ruidosos y contaminantes, y transportaban agua de los arroyos porque casi la mitad del suministro de agua depende de la electricidad.

“No sé qué era peor, estar sin energía o que los generadores estuvieran encendidos toda la noche”, dijo Ruth Santiago, cuya vivienda de Salinas estuvo a oscuras durante siete semanas después de María. Dormía con una máscara para mitigar los gases del generador.

La red eléctrica de la isla estaba en problemas desde antes de la tormenta. Era antigua, vulnerable e ineficaz, y ya a principios de septiembre el huracán Irma derribó una parte y dejó a oscuras a más de un millón de residentes. La Autoridad de Energía Eléctrica de Puerto Rico (AEE), ahogada en USD 9000 millones de deuda, buscaba licitaciones para reparar los daños, cuando, dos semanas después, llegó el huracán María, y prácticamente eliminó lo que quedaba de la infraestructura eléctrica en la isla. 

Al igual que otros aspectos de la recuperación ante el desastre, la reconstrucción de la AEE se caracterizó por las decisiones cuestionables y los pasos en falso, como el contrato inicial de reparación por USD 300 millones, que pronto se canceló en medio de una polémica, con Whitefish Energy, una empresa de servicios públicos pequeña y sin experiencia de Montana.

Gran parte de la isla recibe energía de la AEE, cuyas plantas generadoras descomunales y oxidadas, ubicadas en el sur, funcionan con combustible fósil y dependen de postes, cables y transformadores antiguos para atravesar el interior montañoso y entregar energía a las zonas pobladas del norte, como San Juan. Es un sistema obsoleto y deficiente, pero se está “fortaleciendo” con más piezas de repuesto resistentes a huracanes, a medida que Puerto Rico vuelve a la luz.

En algunas zonas, como el pueblo de San Sebastián, los residentes y los funcionarios se cansaron de esperar a la AEE, y ellos mismos saltearon el servicio público: con un camión elevador, cambiaron los cables eléctricos del pueblo que estaban rotos. Por lo tanto, la integridad de la red reparada no está para nada garantizada.

El Departamento de Energía estima que se necesitarán USD 17 600 millones para reconstruir el sistema. Hasta hoy, se han invertido unos USD 2000 millones. Incluso cuando al comenzar la primavera ya se había restablecido la electricidad en más del 90 por ciento de la isla, Puerto Rico sufría apagones intermitentes, lo que acentuó la fragilidad de la red.

Además, el servicio es caro, alrededor del doble de lo que cuesta en el continente, dado que depende de combustibles fósiles que se deben importar. Pero la Ley Stafford de Ayuda por Desastre y Asistencia por Emergencia de 1988 solo autoriza a las agencias gubernamentales a restablecer un servicio público existente. Los escépticos dudan de que el plan propuesto por el gobernador de privatizar la AEE logre inyectar el capital necesario para mejorar drásticamente la eficacia del servicio. Por ahora, no parece probable que las fuentes renovables, como la solar y la eólica, reemplacen la red, incluso en una isla soleada del Caribe con vientos alisios durante todo el año, porque, para reemplazar el modo de transmisión de energía en toda la isla, se necesita una inversión pública importante. Puerto Rico está en bancarrota, y parece que Washington no desea aumentar la asistencia.

Algunos dicen que también falta voluntad política. “Hay algo que se llama el cartel del petróleo. Alguien se está llevando dinero, y muchas de esas personas son muy influyentes”, dijo Flores-Marzan, antiguo planificador de la isla. 

Pero se están haciendo varios trabajos. Se otorgará una donación global federal de USD 750 000 a la Universidad de Puerto Rico para desarrollar un Programa de Innovación en Resiliencia, que buscará soluciones innovadoras para promover la generación y el almacenamiento de energía renovable en el hogar. La donación también financiará el estudio de medidas de resistencia, diseño de viviendas y métodos de construcción para toda la comunidad (Departamento de Salud de Puerto Rico, 2018).

Hace poco, la empresa farmacéutica AbbVie anunció una donación de USD 50 millones para que el grupo sin fines de lucro Direct Relief equipe a más de 60 centros de salud comunitarios y otros centros de asistencia médica con energía solar, y almacenamiento de baterías y generadores, y para otorgarles bombas motorizadas que podrían garantizar el suministro de agua potable. Además, el grupo trabajará durante los próximos tres años para reconstruir la destrozada cadena de suministros médicos y financiar programas de telemedicina en algunos hospitales y centros de salud.

Y hay otras iniciativas fundamentales más pequeñas pendientes. “Los municipios están cansados de esperar a la AEE, por lo que gran parte del impulso por lograr resistencia e independencia energética viene de ellos”, dijo Flores-Marzan.

Un grupo llamado Resilient Power Puerto Rico está juntando fondos para llevar microrredes solares a la isla, y hace poco recibió un subsidio de USD 625 000 para llevar energía solar a 200 centros comunitarios.

Si la red de la AEE fallara, se podrían usar las microrredes para abastecer servicios esenciales, como bombas de agua y dispositivos médicos. “Estamos reconstruyendo en puntos fundamentales. No estamos desafiando ni reemplazando a la AEE”, dijo Jonathan Marvel, un arquitecto de Nueva York que lidera el grupo.

Con algunos fondos de organizaciones sin fines de lucro del continente, Santiago y sus vecinos de Salinas, que viven a la sombra del humo de dos plantas de la AEE, también están intentando planificar microrredes solares comunitarias que, al menos, puedan servir de respaldo para servicios esenciales, como bombear agua y encender dispositivos médicos, en caso de que falle la electricidad de la AEE.

“La AEE provee energía al 95 por ciento de la isla, pero queremos cambiar su modo de distribución. El modo en que lo hacía antes no es el mejor para el público”, dice Santiago, una abogada que vivió en el Bronx antes de regresar a Puerto Rico. “No es fácil desarrollar infraestructura energética a nivel comunitario, pero no tenemos otra opción. La red antigua no es fiable, nos está matando en el sur”.

Recuperarse durante la bancarrota

La crisis económica de Puerto Rico se cierne amenazante sobre cualquier planificación a largo plazo y cualquier intento de recuperación. Apenas cuatro meses antes del huracán María, el territorio autónomo declaró una forma de bancarrota, ya que luchaba contra una deuda de más de USD 74 000 millones y otros USD 49 000 millones en pagos de pensiones. La deuda total de USD 210 000 millones fue la bancarrota municipal más importante de Estados Unidos, y dejó atrás a los USD 18 000 millones que presentó Detroit en 2013.

La solvencia financiera, los problemas de liquidez y las medidas de austeridad impuestas en las reformas económicas y fiscales limitaron la capacidad del territorio de ofrecer servicios, según informa Lourdes Germán, directora de Iniciativas internacionales y del instituto del Instituto Lincoln. “Esta dinámica acentuó muchísimo la crisis humanitaria que se intensificó antes del desastre y, evidentemente, continúa”, dijo. 

A principios de la década de 1970, el gobierno de la isla se había hecho más dependiente de la financiación de la deuda, y esa crisis siguió avanzando durante décadas. Si bien los bonos que garantizaban esa deuda eran arriesgados, eran fáciles de vender porque estaban exentos de impuestos federales, estatales y locales, gracias a una cláusula de la ley federal de 1917 que, además, otorgaba a los puertorriqueños la ciudadanía estadounidense.

“Las personas que invertían en bonos de Puerto Rico no veían el riesgo crediticio. Solo veían que podrían obtener una tasa de interés más alta”, dijo Desmond Lachman, economista y miembro sénior del American Enterprise Institute (AEI). “Puerto Rico no tenía problemas con tomar dinero prestado. Hasta que empezó a tener problemas. Siguió tomando prestado hasta que terminó la fiesta, y ahora estamos en ese punto”.

A pesar del concepto general, las garantías de Puerto Rico se siguen comerciando, incluso un año después de que la isla ingresó a la bancarrota de facto. La actividad financiera entre los inversionistas demuestra que el perfil de riesgo afecta la actividad de tarifación y comercio en las garantías, y genera nuevos patrones de interés inversor y segmentación. Germán afirma que estos factores influirán en la capacidad de la isla de atraer capital e inversión de afuera, y también sobre el costo del capital. “La actividad comercial continúa porque hay un segundo mercado. Los inversionistas observan estas garantías y riesgo de tarifación al evaluar el potencial de devoluciones. Por ejemplo, el abril pasado, Bloomberg informó que los bonos de Puerto Rico se destacaron por tener el mejor rendimiento en el mercado municipal de EE.UU. Así, fue la deuda denominada en dólares que más ganó en el mundo”, explicó.

Hoy, la deuda apoyada por impuestos representa el 55 por ciento del Producto Interno Bruto de Puerto Rico, en contraste con el promedio del 2,67 por ciento en EE.UU., según los valores que la Junta de Supervisión y Administración Financiera de Puerto Rico publicó en abril. La isla se enfrenta a mercados de capital cada vez más volátiles y desafiantes, mientras continúa con su bancarrota, y las opiniones varían en lo que respecta a cuál es la mejor forma de resolver el callejón sin salida con los inversionistas. 

Por su parte, Lachman, del AEI, es tajante. “La deuda se debe condonar a mayor escala. Eso es matemática básica”, dijo. “Los acreedores no incurrieron en diligencia debida cuando prestaron, entonces no veo motivos para sentirnos mal por ellos ni solicitar a los contribuyentes que paguen las cuentas cuando los acreedores también se equivocaron”.

El total de la deuda 

Puerto Rico acumuló niveles insostenibles de deuda en forma de bonos de obligación general, que se respaldan con la plena fe y el crédito del gobierno territorial, y bonos pagaderos con los ingresos, que se respaldan con fuentes de ingreso específicas, como tarifas o ciertos impuestos. La constitución del país ofrece garantías para los bonos de obligación general.

“El meollo del problema es la incapacidad de respaldar los bonos pagaderos de obligación general, que están sujetos a garantías constitucionales”, explicó Germán. “Y luego está el problema adicional de los bonos pagaderos con los ingresos, que emitieron un puñado de entidades públicas y cuasipúblicas de formas que no son sostenibles. En Puerto Rico, la deuda pagadera por ingresos públicos está garantizada por diversas fuentes de ingresos (por ejemplo, impuestos a la venta) que, de otro modo, se podrían haber utilizado para financiar las operaciones gubernamentales actuales. Esta combinación era una receta para el desastre”.

Contexto histórico

Los críticos culpan al sector público inflado, la mala administración y la corrupción, pero muchos creen que las raíces de la crisis se remontan a la historia colonial de la isla. La relación con el gobierno federal ha tenido sus momentos de tensión desde que la antigua colonia española fue cedida a los Estados Unidos al concluir la guerra hispano-estadounidense, a fines del s. XIX.

Los puertorriqueños obtuvieron la ciudadanía estadounidense en 1917, justo a tiempo para entrar en las Fuerzas Armadas en la Primera Guerra Mundial. En 1920, la Ley Jones exigió que todos los bienes transportados entre puertos de EE.UU. se llevaran sobre barcos construidos y operados por estadounidenses, y que pertenecieran a dicha bandera. Debido a este mandato, los envíos por barco eran más costosos, en particular en Puerto Rico, donde gran parte de las mercancías deben ser importadas, incluso las que se necesitan para ayuda ante catástrofes.

En 1996, el gobierno federal inició una eliminación gradual de 10 años de la reducción de impuestos a las sociedades (sección 936 del código impositivo), diseñada para incentivar el crecimiento industrial en la isla. En la década siguiente, que terminó en 2006, según la Oficina de Estadísticas Laborales, Puerto Rico perdió el 40 por ciento de sus empleos industriales.

La base imponible de la isla se redujo, y el siguiente golpe llegó casi enseguida, con los albores de la Gran Recesión de 2008. El gobierno de Puerto Rico siguió tomando prestado para cumplir con sus obligaciones, y gran parte de los ciudadanos que podían trabajar (los jóvenes y saludables) emigraron en masa a Estados Unidos continental. 

Tras un pico de 3 800 000 residentes en 2004, la población de Puerto Rico se redujo a unos 3 400 000 el año pasado (Tabla 1), y se espera que pierda cerca de medio millón más hacia 2023, según la Junta de Supervisión y Administración Financiera para Puerto Rico (FOMB, 2018). La junta fue creada por el Congreso con la Ley para la Supervisión, Administración y Estabilidad Económica de Puerto Rico (PROMESA), firmada en junio de 2016.

La junta de vigilancia pinta un panorama oscuro para la economía de la isla en el corto plazo: el 100 por ciento del Producto Nacional Bruto de este año vendrá de USD 62 000 millones de inversiones previstas para ayuda privada y pública ante desastres. 

En abril, el comité aprobó una serie de medidas de austeridad que pretenden una “reforma estructural agresiva” en Puerto Rico, entre ellos, reducir los beneficios de los empleados que no se conocen en el continente, como bonos obligatorios para Navidad y permitir el empleo “a voluntad”. Otras recomendaciones son distender las leyes laborales e implementar una reforma de pensiones y beneficios sociales. Los críticos dicen que las “reformas” son punitivas y dependen de proyecciones de crecimiento poco realistas. Como política económica, dicen que las medidas de austeridad son lo último que necesita la isla mientras lucha por recuperarse.

“¿Se puede reconstruir bajo ese plan? No mucho”, dice Carlos Vargas-Ramos, director de políticas del Centro.

Pero los defensores dicen que es la mejor forma de tratar la crisis fiscal subyacente para que la isla pueda avanzar. “Desde el punto de vista de planificación de la comunidad, estamos en una encrucijada. . . . En este momento, la gran pregunta es: ¿qué sucederá con este gobierno y la deuda?”, dijo Federico Del Monte Garrido, planificador del gobierno, vicepresidente de la Sociedad Puertorriqueña de Planificación y participante de la cumbre en Hunter. “El punto principal es que debemos aceptar este plan fiscal”.

Un factor que empaña las posibilidades de la isla es la incoherencia de clasificación como territorio según las leyes de EE.UU. Algunas sentencias y políticas estadounidenses del pasado la han tratado como jurisdicción extranjera y la excluyeron de ciertas secciones del Código, según destaca Germán. “En parte, esto resultó muy difícil porque nuestras propias leyes no son claras. Por ejemplo, Puerto Rico no estaba autorizado a solicitar protección bajo la parte del código de bancarrota de EE.UU., capítulo 9, que ofrece apoyo a algunos gobiernos insolventes, y no queda claro por qué fue excluido. PROMESA intentó reparar algunos de estos problemas y ofrecer a Puerto Rico una solución similar al capítulo 9 para que pueda ajustar los problemas de deuda, que son el meollo de la insolvencia”.

Tributación y uso del suelo

El comité también recomendó implementar iniciativas impositivas que, según muchos expertos, son esenciales para enderezar el barco. Entre ellas, crear un sistema de pago unificado, reducir los impuestos a las sociedades con el objetivo de incrementar la inversión, ampliar la base imponible y aumentar el cumplimiento.

Por supuesto, el desarrollo caótico del suelo de Puerto Rico ha llevado a un sistema azaroso de tributos inmobiliarios. En muchas zonas rurales, los terrenos se han heredado durante generaciones, y no hay papeles ni escrituras. Esta es una barrera para casi el 60 por ciento de los 1 100 000 solicitantes que pidieron ayuda a la FEMA, según la junta de vigilancia financiera.

Algunos estiman que casi la mitad de las 1 600 000 viviendas de Puerto Rico pueden haber sido construidas como “informales”. Este es un término general que incluye las subdivisiones ilegales. Comunidades enteras crecieron de esta forma, como Villa Hugo, un asentamiento improvisado con 6000 residentes que fueron obligados a abandonar su hogar durante un huracán anterior, que lleva el nombre de la comunidad. 

La mayoría de las viviendas informales no tienen ningún tipo de seguro. Muchas no tienen dirección y no aparecen en el registro tributario. En muchas partes no existe una base imponible equitativa (característica en las comunidades saludables). “No hicieron una labor muy buena al capitalizar el valor del suelo”, dijo George W. McCarthy, presidente y director ejecutivo del Instituto Lincoln. “Incluso no ejecutaron nada bien la recaudación de impuestos a la propiedad inmobiliaria”. 

Indicó que, si Puerto Rico mejora los sistemas de registro del suelo, establece valores a las propiedades e impone los impuestos, puede asegurarse una fuente de ingresos importante necesaria para reconstruir.

La junta de vigilancia fiscal no encontró avalúos útiles para “decenas de miles” de propiedades en la isla, y estimó que se podrían recaudar más de USD 800 millones si se mejorara el cumplimiento, se registraran las propiedades que no están en los registros y se capturaran impuestos retroactivos.

El problema es crucial, dijo Flores-Marzan. “Es un problema inmenso y un asunto importante que se debe tratar ahora mismo”, indicó. “Muchos abogados de Puerto Rico (personas capaces de tratar el problema) deben estar desempleados ahora”.

Durante los próximos cinco años, el grupo sin fines de lucro Hábitat para la Humanidad Internacional, que construye viviendas y también recibió un subsidio de USD 50 millones de AbbVie, se asociará a algunas familias para reparar y reconstruir viviendas y para tratar los temas de “tenencia de tierras” que han presentado grandes dificultades al recuperar las viviendas, según indica Bryan Thomas, director de relaciones públicas del grupo, que tiene base en Giorgia. “Una gran parte de las viviendas fueron construidas sin un título definido, y eso ha causado muchos atrasos”, dijo Thomas. Dijo que Hábitat también trabajará con los funcionarios del gobierno para buscar formas de tratar el problema a nivel sistémico.

Thomas dijo que Hábitat se encuentra con problemas similares en muchos de los países menos desarrollados donde construye. “De muchas maneras, Puerto Rico es una especie de híbrido: es parte de EE.UU., pero no funciona con los mismos sistemas ni leyes”, dijo. Además, Hábitat planea capacitar a obreros de la construcción, dado que muchos se fueron de la isla a medida que la economía se derrumbaba.

McCarthy dijo que Puerto Rico también podría beneficiarse con la creación de más autoridades de bancos de tierras públicos, para intentar resolver la situación de decenas de miles de propiedades abandonadas. Estos mecanismos ayudaron a reconstruir en Japón y Alemania tras la Segunda Guerra Mundial y, más recientemente, en Detroit. 

Los bancos de tierra agrupan y reúnen las propiedades y luego diseñan usos más efectivos. Pueden promover el desarrollo económico si promueven los préstamos y subsidios en una zona. La Autoridad pública del Banco de Tierras de Detroit posee unas 100 000 propiedades en la ciudad; gran parte de ellas estaban en ejecución hipotecaria.

Cuando llegó María, Puerto Rico ya estaba en medio de una crisis de ejecuciones: los índices triplicaban a los del continente. Decenas de miles de propiedades fueron abandonadas, y los planificadores estiman que hay 40 000 propiedades vacías solo en la zona de San Juan. San Juan creó un banco de tierras para Santurce, el vecindario con mayor densidad de población, en 2016 (Vélez, 2016).

Además, deberá demoler o reasignar cientos de edificios de escuelas. Un cuarto de las escuelas de la isla se cerraron debido al éxodo al continente. Esta primavera, el departamento de educación del territorio anunció planes para cerrar otras 265. De este modo, Puerto Rico tendría un tercio menos de escuelas de las que había al comenzar el año académico 2017–2018, y esto podría acelerar aún más la emigración (Mazzei, 2018).

“No veo una forma de avanzar, a menos que puedan racionalizar el uso del suelo”, dijo McCarthy. “Todo depende del liderazgo efectivo. Se necesitará a alguien carismático y visionario”.

Pero el camino a seguir no está para nada despejado. “Todo en Puerto Rico se hizo muy complicado. Se percibe un ambiente de anarquía”, contó David J. Carrasquillo-Medrano, presidente de la Sociedad Puertorriqueña de Planificación, en un panel de la reciente “cumbre diáspora” en Manhattan. “El relato del gobierno es que Puerto Rico es una hoja en blanco, y uno puede ir a hacer lo que quiera”, dijo en relación con el coqueteo a los desarrolladores. “En Puerto Rico, no es que no tengamos planificación, sino que no hay una regulación inmobiliaria”.

Vivienda, infraestructura y el regreso de los cruceros

Muchos planificadores están muy preocupados de que la desesperación y la conveniencia venzan a las planificaciones que ya comenzaron y boicoteen la reconstrucción innovadora. La zonificación y la planificación varían en la isla. Del Monte Garrido dijo que gran parte de la reconstrucción en zonas más pobres fue improvisada. Flores-Marzan dijo que hay códigos de zonificación y planos en 30 de 78 municipios de toda la isla, pero a veces falta la ejecución, ya que la planificación es regional.

En 2011, Puerto Rico adoptó un código de edificios uniformes por el cual las estructuras se debían construir para soportar vientos de hasta 230 km/h. Pero la mayoría de las viviendas de la isla son informales y fueron construidas antes del código.

Hasta la fecha, son pocos los planes concretos para las viviendas nuevas; hay un “plan de acción” bosquejado por el gobierno federal cuando otorgó los subsidios Community Development Block Grant, que es más bien una declaración de necesidad que un plan. Las etiquetas de precios para la reparación de la isla indican valores altísimos: USD 375 millones para quitar escombros, USD 1500 millones para reparar y reconstruir calles y puentes, USD 8000 millones para los edificios públicos.

Puerto Rico es pobre: antes de la tormenta, el 43,5 por ciento de la población vivía por debajo de la línea de pobreza. La isla alberga la segunda autoridad de viviendas sociales más grande de EE.UU., con más de 55 000 unidades en 340 propiedades. Más de un cuarto de las unidades sufrieron daños, y las primeras denuncias de daños sumaron USD 119 millones, solo en viviendas sociales.

En total, la tormenta dañó un millón de viviendas; 472 000 sufrieron “daños importantes” y 70 000 se destruyeron por completo, según las estimaciones del gobierno. El plan de acción federal preliminar estima que, para construir obras de mayor resistencia, se podrían necesitar USD 34 300 millones.

La financiación de fundaciones y organizaciones sin fines de lucro podría resultar importante. Algunos grupos, como la Comisión Asesora para un Puerto Rico Resiliente, respaldada por las fundaciones Rockefeller y Ford, han estado trabajando con grupos comunitarios para valuar los daños y buscar soluciones sustentables. Además, Rockefeller ha respaldado una campaña en toda la isla para que el público se involucre, llamada ReImagina Puerto Rico. Aun así, muchos se sienten ignorados por la respuesta federal tardía y la gran confusión después de María.

“Yo represento al pueblo, y nadie nos está escuchando. Todavía nos dicen que murieron 64 personas, y fueron más de 1000”, dijo el Reverendo José Antonio Oquendo, cada vez más perturbado durante un debate en la cumbre de Hunter. Oquendo es un cura católico de la diócesis de Caguas, y sus parroquianos no tuvieron electricidad ni agua potable durante seis meses. “En la isla decimos que nos llevará 10 años restablecernos”.

Carrasquillo-Medrano, quien preside la Sociedad Puertorriqueña de Planificación, dijo que faltan demasiados datos, como mapas precisos de inundación, como para tomar decisiones de planificación informadas. Y advierte sobre el apuro por construir, en vez de rehabilitar viviendas. “No necesitamos viviendas nuevas; tenemos 326 000 unidades vacías en la isla”.

La mayoría de los planificadores concuerdan con que es probable que se deban reubicar las comunidades de las zonas particularmente vulnerables a las inundaciones y los aludes de lodo que azotaron al interior montañoso y las tierras bajas costeras de la isla, de 56 km por 160 km. Según el gobierno, cuando llegó María, se inundaron más de 50 ríos y 60 cuencas.

La agricultura prácticamente desapareció y la industria flaquea, pero el turismo está repuntando. Puerto Rico reactivó el funcionamiento de los cruceros apenas dos semanas y media después del huracán María, y se esperan 1 700 000 pasajeros para la temporada 2018–2019, según los pronósticos incluidos en el plan de acción del gobierno federal. Este verano, se espera alcanzar los números previos a María en el aeropuerto Luis Muñoz Marín. Y la mayoría de los hoteles reabrieron sus puertas; el gobierno estima que el sector del turismo ha gastado o planificado USD 1900 millones en nuevos desarrollos y renovaciones.

McCarthy apunta a los servicios estimables de Puerto Rico (después de todo, es una isla del Caribe), y dijo que tal vez la isla puede observar a Nueva Orleans y Detroit, que se han estabilizado o incluso remontado ante la crisis y la desgracia. “No es que Puerto Rico quedará vacío por mucho tiempo. La pregunta es: ¿quién lo desarrollará?”, dijo McCarthy. “¿Se puede construir una economía próspera allí, más allá del turismo?”. 

En la cumbre de Manhattan de esta primavera, los panelistas y los asistentes parecían encogerse ante el trabajo que hay por delante. “Aún necesitamos mucha información. Todavía está la sensación de enormidad de la labor que nos espera”, dijo Vargas-Ramos, de Hunter College. “Llevará décadas reconstruir Puerto Rico, por lo que necesitamos pensar a corto, mediano y largo plazo”.

Patricia Alex es jefa de Silk City Communications, que se especializa en escribir y editar para organizaciones sin fines de lucro. Es experiodista de periódicos y editora del norte de Nueva Jersey.

Fotografía: cestes001 (iStock/Getty Images Plus)

Referencias

Brown, Nick. 2018. “Special Report: In Puerto Rico, a Housing Crisis US Storm Aid Won’t Resolve.” Reuters, 6 de febrero de 2018.

FOMB (Junta de Supervisión y Administración Financiera para Puerto Rico). 2018. “New Fiscal Plan for Puerto Rico: Restoring Growth and Prosperity.” Puerto Rico: Junta de Supervisión y Administración Financiera para Puerto Rico (abril).

Kishore, Nishant, Domingo Marqués, Ayesha Mahmud, Mathew V. Kiang, Irmary Rodríguez, Arlan Fuller, Peggy Ebner, Cecilia Sorensen, Fabio Racy, Jay Lemery, Leslie Maas, Jennifer Leaning, Rafael A. Irizarry, Satchit Balsari y Caroline O. Buckee. 2018. “Mortality in Puerto Rico after Hurricane Maria.” Artículo especial, New England Journal of Medicine, 29 de mayo de 2018. DOI: 10.1056/NEJMsa1803972.

Johnson, Laurie A. y Robert B. Olshansky. 2017. After Great Disasters: An In-Depth Analysis of How Six Countries Managed Community Recovery. Cambridge, MA: Instituto Lincoln de Políticas de Suelo.

Mazzei, Patricia. 2018. “Puerto Rico’s Schools Are in Tumult, and Not Just Because of Hurricane Maria.” New York Times, 1 de junio de 2018.

PRDOH (Departamento de Vivienda de Puerto Rico). 2018. “Puerto Rico Disaster Recovery Action Plan for the Use of CDBG-DR Funds in Response to 2017 Hurricanes Irma and Maria.” Borrador para comentarios públicos. San Juan, Puerto Rico: Departamento de Vivienda, gobierno de Puerto Rico (10 de mayo).

Vélez, Eva Lloréns. 2016. “San Juan Creates Community Land Bank.” Caribbean Business, octubre de 2016.

Puerto Rico was already on its heels when Hurricane Maria inflicted its destruction in September 2017. The US territory—home to 3.4 million American citizens—was bankrupt and depopulating. Nearly half the island’s housing didn’t meet code, its rickety power grid was inefficient and unreliable, and the economy was hobbled by staggering debt and a bloated public payroll.

The massive Category 4 hurricane made landfall against that backdrop, damaging or destroying most homes, knocking out telecommunications, and decimating infrastructure on virtually the entire island. Most of Puerto Rico lost electrical power for more than six months, cell service was spotty, and residents and leaders complained of poor federal disaster response.

A Harvard study published in the New England Journal of Medicine estimates that at least 4,645 deaths can be linked to the hurricane and its immediate aftermath—70 times the official estimate (Kishore et al. 2018).

By May 2018, power finally returned to all but about 20,000 people—albeit unreliably—and the federal government announced that Puerto Rico would receive $18.5 billion from the US Department of Housing and Urban Development to rebuild its battered housing and infrastructure. The grant, the largest in the agency’s history, added to $1.5 billion already committed to Puerto Rico from HUD and more than $3 billion allocated for response and recovery by other federal entities such as the Federal Emergency Management Agency (FEMA) and the Army Corps of Engineers.

But the total falls far short of the $94.4 billion that Governor Ricardo Rossello requested from the federal government to rebuild the island, where blue tarps—slow in coming to begin with—still draped roofs months after permanent repairs had been made to hurricane-ravaged states on the mainland.

By spring 2018, Puerto Rico was attempting to pivot—however unsteadily—from the massive response and relief phase of the disaster to mid- and long-term planning for recovery, even as another hurricane season loomed. But what will recovery look like on an island that was so compromised to begin with? How does the insolvent commonwealth, which experienced a post-hurricane exodus of an estimated 200,000 residents, address improvements in debt restructuring, tax collection, land use planning, flood control, and energy distribution?

It’s still very much an open question. “It seems the planning process doesn’t have a leader,” Ruben Flores-Marzan, former president of the Puerto Rico’s island-wide planning board, told a group assembled at Centro—the Center for Puerto Rican Studies at Manhattan’s Hunter College—for a recent “diaspora summit” on rebuilding the island. “Who’s in charge here?”

The answer is still shaking out on the island—and in the corridors of power on the mainland—as community groups, developers, financiers, and government officials jockey for influence and primacy over the process.

“Lack of clarity is a big problem right now,” said Robert B. Olshansky, a professor of urban and regional planning at the University of Illinois at Urbana-Champaign. “They are certainly hoping to build back better. That includes a more resilient electrical grid, a new building code, and improvements in governance and public finance, among other things. . . . I am sure that some improvements will be made, but it’s far too early to tell what.”

In After Great Disasters: An In-Depth Analysis of How Six Countries Managed Community Recovery, published by the Lincoln Institute, Olshansky and coauthor Laurie A. Johnson suggest that disaster reconstruction can offer a unique opportunity to fix long-standing problems (Johnson and Olshansky 2017).

Surely Puerto Rico, suffering from more than a decade of decline, needs a big fix and a robust plan for resiliency as the effects of climate change are likely to continue to batter the island. US government forecasters have predicted an active 2018 hurricane season with as many as nine hurricanes expected.

Planners were often ignored as Puerto Rico’s infamous urban sprawl and informal rural land development proceeded apace over many decades. They are hoping for more of a voice now. “Slowly there is a realization that planning has a lot to offer, and we should be part of the process,” Carmén M. Concepción Rodriguez of the Institute for Social Research at the University of Puerto Rico told the summit at Hunter, via videoconference from the island.

Flores-Marzan, who is now planner for the town of Ware, Massachusetts, hopes the island will also tap into its émigrés as it tries to recover. Nearly six million Puerto Ricans now live on the continental United States. “You see where they could be making small victories if they involved the diaspora, and they’re just not doing that,” he said. Still, there is hope: “We have to be hopeful because otherwise we will lose the island.”

First, Power

Restoring power is the first order of business. The prolonged absence of electricity has taken its toll on Puerto Rico, hampering recovery and exacerbating the misery on the ground. Particularly in the rural areas, people spent months powering medical equipment with noisy, polluting generators, and hauling water from streams because about half the island’s water delivery depends on electricity.

“I don’t know what was worse, being without power or having the generators run all night,” said Ruth Santiago, whose home in Salinas was dark for seven weeks following Maria. She slept with a mask to mitigate the generator fumes.

The island’s electrical grid was in trouble even before the storm. It was old, vulnerable, and inefficient when Hurricane Irma knocked out a portion of it in early September, leaving more than a million residents in the dark. The Puerto Rico Electric Power Authority (PREPA)—mired in $9 billion in debt—was seeking bids to repair that damage when Hurricane Maria struck two weeks later, virtually wiping out the island’s remaining electrical infrastructure.

Like other aspects of the disaster recovery, PREPA’s rebuild has been marked by questionable decisions and missteps, such as the early $300 million repair contract—soon canceled amid controversy—with Whitefish Energy, a small, inexperienced utility company from Montana.

The vast majority of the island is powered by PREPA, whose hulking and rusting generation plants in the South run on fossil fuels and rely on old-school utility poles, wires, and transformers to traverse the mountainous interior in order to deliver power to populated areas like San Juan in the North. It’s an outmoded and balky system, but it’s being “hardened” with more hurricane-resistant replacement parts as Puerto Rico comes back on-line.

In some areas, like the town of San Sebastian, residents and town officials tired of waiting for PREPA, took it upon themselves to bypass the utility by getting a bucket truck and restringing the town’s downed electrical wires. So the integrity of the repaired grid is by no means assured.

The Department of Energy estimates it will take $17.6 billion to rebuild the system. About $2 billion has been committed to the effort to date. Even after more than 90 percent of power had been restored to the island in early spring, Puerto Rico suffered from intermittent blackouts, underscoring the fragility of the grid.

The island’s electricity is expensive too—about double the cost on the mainland—since it relies on fossil fuels that have to be imported. But the 1988 Stafford Disaster Relief and Emergency Assistance Act authorizes government agencies to restore only existing utility service. Skeptics doubt that a plan promoted by the governor to privatize PREPA will infuse the utility with the capital needed to substantially improve its efficiency. For now, it seems that renewable sources like solar and wind aren’t likely to replace the grid, even on a sunny Caribbean island with year-round trade winds, because overhauling the mode of energy-transmission island-wide would require a significant public investment. Puerto Rico is broke, and Washington seems reluctant to increase its aid.

Some say political will is also lacking. “There’s a thing called the oil cartel. Somebody is cashing in, and a lot of those people are very influential,” said Flores-Marzan, the former planner for the island.

But a number of efforts are underway. A $750,000 federal block grant will go to the University of Puerto Rico to develop a Resilience Innovation Program to look for innovative solutions to promote home-based renewable energy generation and energy storage. The grant will also fund the study of community-wide resilience measures, home design, and construction methods (PRDOH 2018).

The biopharmaceutical company AbbVie recently announced a $50 million donation to the nonprofit group Direct Relief to equip more than 60 community health centers and local healthcare facilities with solar power, battery storage, and generators, and to enable them to power pumps that would ensure clean water supply. The group will also work over the next three years to rebuild the battered medical supply chain and fund telemedicine programs at select hospitals and health centers.

And there are smaller, grassroots initiatives pending. “Municipalities are tired of waiting for PREPA, so a lot of the push for resiliency and energy independence is coming from them,” said Flores-Marzan.

A group called Resilient Power Puerto Rico is fundraising to bring solar microgrids to the island and recently received a $625,000 grant to bring solar to 200 community centers.

If the PREPA grid failed, the microgrids could be used to power essentials like water pumps and medical devices. “We are rebuilding in a grassroots way. We’re not challenging or replacing PREPA” said Jonathan Marvel, a New York architect who leads the group.

With some funding from nonprofits on the mainland, Santiago and her neighbors in Salinas, who live in the shadow of two smoke-belching PREPA plants, are also working on plans for community-based solar micro grids that can at least provide a backup for essential services like water pumping and running medical devices, should PREPA power fail.

“PREPA is the provider of power to 95 percent of the island, but we want it to change its way of distribution. It’s not in the best public interest to do it the way it was done before,” said Santiago, a lawyer who lived in The Bronx before returning to Puerto Rico. “Developing energy infrastructure at the community level is not an easy thing to do, but we don’t have a choice. The old grid is unreliable—it’s killing us in the South.”

Recovering While Broke

Puerto Rico’s economic crisis looms large over any long-term planning and recovery efforts. Just four months before Hurricane Maria, the commonwealth declared a form of bankruptcy as it struggled under more than $74 billion in debt and $49 billion in pension obligations. The combined $120 billion debt made it the largest municipal bankruptcy in the United States, dwarfing Detroit’s $18 billion filing in 2013.

The territory’s cash solvency and liquidity problems and austerity measures imposed through economic and fiscal reforms inhibited its ability to provide services, notes Lourdes Germán, director of International and Institute-Wide Initiatives at the Lincoln Institute. “This dynamic significantly contributed to the humanitarian crisis that was building before the disaster and clearly continues,” she said.

Beginning in the 1970s, the island’s government had become more reliant on debt financing, and that crisis continued to unfold for decades. The bonds securing that debt—however risky—were easy to sell because they were exempt from federal, state, and local taxes thanks to a provision in the 1917 federal law that also granted Puerto Ricans American citizenship.

“People who invested in Puerto Rican bonds didn’t look at the credit risk. They just looked at the fact that they could get a high interest rate,” said Desmond Lachman, an economist and senior fellow at the American Enterprise Institute (AEI). “Puerto Rico didn’t have trouble borrowing money. Until it did. It kept borrowing until the music stopped, and that’s where we are now.”

Despite this common perception, Puerto Rican securities continue to trade, even a year after the island entered its de facto bankruptcy. The market activity among investors demonstrates that the risk profile is affecting the pricing and trading activity around the securities and resulting in new patterns of investor interest and segmentation. These factors will influence the island’s ability to attract outside capital and investment as well as the cost of capital, according to Germán. “The trading activity continues because there is a secondary market. Investors are looking at these securities and pricing risk while evaluating the potential for returns. Last April, for example, Bloomberg reported that Puerto Rico’s bonds emerged as a top performer in the US municipal market—gaining more than any other dollar-denominated debt in the world,” she explained.

Tax-supported debt is now 55 percent of the Gross Domestic Product in Puerto Rico, as opposed to the US average of 2.67 percent according to figures released in April by the Financial Oversight and Management Board for Puerto Rico. The island is confronted with ever more volatile and challenging capital markets while it works through its bankruptcy, and opinions vary regarding how best to resolve the stalemate with investors.

AEI’s Lachman, for one, is unequivocal. “The debt has to be written down big time. That’s just basic math,” he said. “Creditors didn’t do due diligence when lending, so I don’t see why we should feel sorry for them or ask taxpayers to foot the bill when the creditors also messed up.”

Debt in the Aggregate

Puerto Rico accumulated unsupportable levels of debt in the form of general obligation bonds, which are secured by the territory government’s full faith and credit, and revenue bonds, which are secured by specific revenue sources, such as fees or specific taxes. Puerto Rico’s constitution provides guarantees for general obligation bonds.

“The heart of the problem is an inability to support their general obligation-backed bonds, which are subject to constitutional protection,” Germán explained. “And then you have the added problem of revenue bonds, which have been issued by over a dozen separate public and quasi-public entities in ways that are not sustainable. Puerto Rico’s revenue debt is secured by many different revenue sources—including, for example, sales taxes—which could have otherwise been used to fund current government operations. This combination was a recipe for disaster.”

Historical Context

Critics blame a bloated public sector, mismanagement, and corruption, but many believe the roots of the crisis lay in the island’s colonial history. Puerto Rico has had an often-fraught relationship with the federal government since the former Spanish colony was ceded to the United States at the end of the Spanish-American War in the late 1800s.

Puerto Ricans were granted American citizenship in 1917—just in time to serve as US forces in World War I. In 1920, the Jones Act required all goods ferried between US ports to be carried on ships built, owned, and operated by Americans. The mandate makes shipping more expensive, especially in Puerto Rico, where most commodities—even those needed for disaster relief—must be imported.

In 1996, the federal government began a 10-year phase-out of corporate tax breaks—Section 936 of the tax code—that were designed to spur manufacturing growth on the island. Puerto Rico lost 40 percent of its manufacturing jobs in the subsequent decade ending in 2006, according to the Bureau of Labor Statistics.

The island’s tax base shrank, and the next blow came in fairly quick succession with the dawn of the Great Recession of 2008. Puerto Rico’s government continued to borrow to meet its obligations, and many of the island’s most employable citizens—the young and healthy—emigrated in large numbers to the mainland United States.

From a 2004 high of 3.8 million, the population in Puerto Rico fell to about 3.4 million last year (Table 1), and it is expected the island will lose nearly half a million more residents by 2023, according to the Financial Oversight and Management Board for Puerto Rico (FOMB 2018). The board was created by Congress under the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA) signed into law in June 2016.

The oversight board paints a grim picture for the island’s economy in the near term: fully 100 percent of the Gross National Product this year will come from the expected $62 billion in public and private disaster relief.

The panel in April approved a series of austerity measures aimed at “aggressive structural reform” in Puerto Rico, such as scaling back employee benefits unheard of on the mainland, like mandatory Christmas bonuses and allowing for “at will” employment. The recommendations also included loosening labor laws and implementing pension and welfare reform. Critics say the “reforms” are punitive and rely on unrealistic growth projections. As economic policy, they say the austerity measures are the last thing Puerto Rico needs as it struggles to recover.

“Can Puerto Rico be rebuilt under that plan? Not much,” said Carlos Vargas-Ramos, director of policy for Centro.

But proponents say it’s the best way to address the underlying fiscal crisis so the island can move forward. “From a community planning point of view, we are in the crossfire. . . . At this moment, the big question is, ‘What is going to happen with this government and the debt’?” said Frederico Del Monte Garrido, a government planner, vice president of the Puerto Rican Planning Association, and Hunter summit attendee. “The principal point is we need to accept this fiscal plan.”

One factor clouding Puerto Rico’s prospects has been its inconsistent classification under US law as a territory. Some past court decisions and US policies have treated Puerto Rico as a foreign jurisdiction and excluded it from certain sections of the US Code, Germán noted. “Part of what has made this very difficult is that our own laws are unclear. For example, Puerto Rico was not authorized to seek protection under the part of the US bankruptcy code, Chapter 9, that provides relief for some insolvent governments, and it’s unclear why it was excluded. PROMESA attempted to fix some of these issues, providing Puerto Rico with a remedy similar to Chapter 9 to enable it to adjust the debt problems that are at the heart of its insolvency.”

Taxation and Land Use

The panel also recommended implementing tax initiatives that many experts believe are essential to righting the ship. They include creating a unified payment system, reducing corporate taxes with the goal of increasing investment, broadening the tax base, and improving compliance.

Puerto Rico’s chaotic land development has, of course, led to a haphazard system of property taxation. In many rural areas, land has been handed down for generations, and there is no paperwork or deeds—a barrier for as many as 60 percent of the 1.1 million claimants seeking FEMA aid, according to the financial oversight board.

By some estimates, as many as half of Puerto Rico’s 1.6 million housing units may have been constructed “informally”—an umbrella term that includes illegal subdivisions. Entire communities grew informally, such as Villa Hugo, a makeshift settlement of 6,000 residents who were forced from their homes by an earlier hurricane, for which the community is named.

Most of the informal homes don’t have insurance of any kind. Many don’t have addresses and don’t show up on the tax rolls. An equitable property tax base—a staple of healthy communities—is absent in many parts.

“They haven’t done a great job in capitalizing on land value,” said George W. McCarthy, president and CEO of the Lincoln Institute. “They’ve done a very poor job of even collecting property taxes.”

By improving land registration systems, establishing property values, and enforcing taxation, Puerto Rico can tap an important revenue source needed for rebuilding, he said.

The fiscal oversight board found no workable assessments for “tens of thousands” of properties on the island and estimated that more than $800 million could be raised by improving tax compliance, registering properties not on the rolls, and capturing back taxes.

The issue is critical, said Flores-Marzan. “It’s an immense problem and an important issue to address right now,” he said. “A lot of lawyers in Puerto Rico—people with the skills to address this problem—are probably out of work now.”

Over the next five years, the nonprofit housing group Habitat for Humanity International, which also received a $50 million grant from AbbVie, will partner with families to repair and rebuild housing and to address so-called “land tenure” issues that have substantially hindered housing recovery, said Bryan Thomas, head of public relations for the Georgia-based group. “A large portion of the housing was built without clear title, and that has caused huge delays,” said Thomas. Habitat will also work with government officials to look for ways to address the problem on a systemic level, he said.

Thomas said Habitat encounters similar issues in many of the less-developed countries where it builds. “Puerto Rico is in many ways sort of a hybrid—it’s part of the US but doesn’t operate under the same systems or laws,” he said. Habitat also plans to train construction workers, since many left the island as the economy plummeted.

McCarthy said Puerto Rico could also benefit from the creation of more public land bank authorities as it grapples with what to do with tens of thousands of abandoned properties. Such mechanisms helped rebuild in Japan and Germany after World War II and more recently in Detroit, he said.

Land banks aggregate and pool property and then design more efficient use. They can promote economic development by leveraging loans and grants for an area. The public Detroit Land Bank Authority owns about 100,000 pieces of property in the city, much of which was in foreclosure.

When Maria hit, Puerto Rico was already in the midst of a foreclosure crisis, with rates that were three times higher than on the mainland. Tens of thousands of properties have been abandoned, and there are an estimated 40,000 vacant properties in the San Juan area alone, planners say. San Juan created a land bank for its most densely populated neighborhood, Santurce, in 2016 (Vélez 2016).

Puerto Rico will also need to demolish or repurpose hundreds of school buildings. A quarter of the island’s schools have been shuttered because of the exodus to the mainland. The territory’s education department this spring announced plans to close another 265 schools. This would leave Puerto Rico with one-third fewer public schools than it had at the outset of the 2017–2018 academic year, potentially accelerating the out-migration (Mazzei 2018).

“I don’t see a path forward unless they can rationalize their land use,” said McCarthy. “It all hinges on effective leadership. It’s going to require somebody who is both charismatic and visionary.”

But the path seems anything but clear-cut on the ground. “Everything in Puerto Rico has become really complicated. There’s a perception of an anarchic environment,” David J. Carrasquillo-Medrano, president of the Puerto Rican Planning Society, told a panel at the recent “diaspora summit” in Manhattan. “The narrative of the government is that Puerto Rico is a blank slate, and you can go do what you want to do,” he said, referring to the courting of developers. “In Puerto Rico, it’s not that we don’t have planning; it’s that there’s no real estate regulation.”

Housing, Infrastructure, and the Return of the Cruise Ships

Many planners are deeply concerned that desperation and expediency will upend any planning already in place and thwart innovative rebuilding in Puerto Rico. Zoning and planning vary across the island. Del Monte Garrido said much of the reconstruction in poorer areas has been makeshift. Flores-Marzan said there are island-wide zoning codes and plans in place in 30 of 78 municipalities, but enforcement often is lacking, as is regional planning.

In 2011, Puerto Rico adopted a uniform building code that required structures to be built to withstand winds of up to 145 miles per hour. But most homes on the island were built informally before then.

To date, there are few concrete plans for new housing; an “action plan,” drafted by the federal government when it awarded the Community Development Block Grants, was more a statement of need than a plan. There are enormous price tags for righting the island: $375 million for debris removal, $1.5 billion to repair and rebuild roads and bridges, $8 billion for public buildings.

Puerto Rico is poor: before the storm 43.5 percent of the population lived below the poverty line. The island is home to the second-largest US public housing authority, with over 55,000 units across 340 properties. More than a quarter of those units were damaged, and initial damage claims totaled over $119 million in public housing alone.

In all, a million homes were affected by the storm; 472,000 sustained “significant damage” and 70,000 homes were completely destroyed, according to government estimates. The preliminary federal action plan estimates that rebuilding for greater resilience could cost $34.3 billion.

Foundation and nonprofit funding could be important. Groups like the Resilient Puerto Rico Commission, supported by the Rockefeller and Ford foundations, have been working with community groups to assess the damage and look for sustainable solutions. Rockefeller also has supported an island-wide public engagement campaign called Reimagine Puerto Rico. Still, many feel ignored after a lagging federal response and much confusion in the aftermath of Maria.

“I represent the people, and nobody is listening to us. We’re still being told 64 people died, and it’s over 1,000,” said Rev. Jose Antonio Oquendo, growing visibly agitated during a discussion at the summit at Hunter. Oquendo is a Catholic priest in the diocese of Caguas, and his parishioners had no electricity or running water for six months. “We say on the island that it is going to take us 10 years to set up again.”

Carrasquillo-Medrano, who heads the Puerto Rican Planning Society, said too much information is missing, such as accurate flood maps, to make informed planning decisions. And he cautions about the rush to build rather than rehabilitate housing. “We don’t need new homes; we have 326,000 vacant units on the island.”

Most planners agree that communities will probably have to be relocated from areas particularly vulnerable to the flooding and mudslides that affected the mountainous interior and coastal lowlands of the 35-by-100-mile island. More than 50 rivers and 60 watersheds surged with flood waters when Maria hit, according to the government.

Agriculture has nearly been wiped out and industry is flagging, but tourism is rebounding. Puerto Rico resumed cruise operations just two and a half weeks after Hurricane Maria, and 1.7 million passengers are expected for the 2018–2019 season, according to forecasts included in the federal government action plan. Traffic at the Luis Muñoz Marín airport is expected to reach pre-Maria levels this summer. And most hotels are back in business; the government estimates that the tourism sector has spent or planned for $1.9 billion in new developments and renovations.

McCarthy points to Puerto Rico’s estimable amenities—it is a Caribbean island after all—and said perhaps the island can look to New Orleans and Detroit, which have stabilized, if not rebounded, from decline and calamity. “It’s not like Puerto Rico is going to stay vacant for long. The question is, who is going to develop it?” said McCarthy. “Can you build a thriving economy in Puerto Rico beyond tourism?”

At the recent summit in Manhattan this spring, panelists and attendees seemed humbled by the work ahead. “We still need a lot of information. There is still a sense of the enormity of the task at hand,” said Hunter College’s Vargas-Ramos. “Rebuilding Puerto Rico is going to take decades, so we need to think short-term, medium-term, and long-term.”

Patricia Alex is a principal at Silk City Communications, which specializes in writing and editing for nonprofit organizations. She is a former newspaper reporter and editor in northern New Jersey.

Additional reporting by Loren Berlin.

Photograph: cestes001 (iStock/Getty Images Plus)

References

Brown, Nick. 2018. “Special Report: In Puerto Rico, a Housing Crisis US Storm Aid Won’t Resolve.” Reuters, February 6, 2018.

FOMB (Financial Oversight and Management Board for Puerto Rico). 2018. “New Fiscal Plan for Puerto Rico: Restoring Growth and Prosperity.” Puerto Rico: Financial Oversight and Management Board for Puerto Rico (April).

Kishore, Nishant, Domingo Marqués, Ayesha Mahmud, Mathew V. Kiang, Irmary Rodriguez, Arlan Fuller, Peggy Ebner, Cecilia Sorensen, Fabio Racy, Jay Lemery, Leslie Maas, Jennifer Leaning, Rafael A. Irizarry, Satchit Balsari, and Caroline O. Buckee. 2018. “Mortality in Puerto Rico after Hurricane Maria.” Special article, New England Journal of Medicine, May 29, 2018. DOI: 10.1056/NEJMsa1803972.

Johnson, Laurie A., and Robert B. Olshansky. 2017. After Great Disasters: An In-Depth Analysis of How Six Countries Managed Community Recovery. Cambridge, MA: Lincoln Institute of Land Policy.

Mazzei, Patricia. 2018. “Puerto Rico’s Schools Are in Tumult, and Not Just Because of Hurricane Maria.” New York Times, June 1, 2018.

PRDOH (Puerto Rico Department of Housing). 2018. “Puerto Rico Disaster Recovery Action Plan for the Use of CDBG-DR Funds in Response to 2017 Hurricanes Irma and Maria.” Draft for public comment. San Juan, Puerto Rico: Department of Housing, Government of Puerto Rico (May 10).

Vélez, Eva Lloréns. 2016. “San Juan Creates Community Land Bank.” Caribbean Business, October 2016.