When individuals approached Samuel Sánchez Tirado while he was mowing his front yard the last time, he pretended to be a landscaper to get them to leave him alone. He knew exactly what the unwelcome guests wanted, and he was sick of repeating the same conversation.
Mr. Sánchez is a resident of Rincón, a beach front community in northwestern Puerto Rico known for surfing and sunsets that has become a hotspot for wealthy investors seeking tax incentives. The guests were interested in buying his one-story property, which is a two-minute walk from the beach, as had been the case with so many others before them. It isn’t for sale, but that hasn’t prevented people from making unsolicited bids.
He explained, “They don’t ask you for a price.” “They basically offer you a check and tell you to write whatever amount you believe the house is worth on it.”
Investors are flocking to picturesque communities across Puerto Rico, some to take advantage of tax incentives designed to entice new people and foreign money to the cash-strapped island, which is working its way out of bankruptcy. The appeal of the tax incentives grew stronger when the coronavirus outbreak drove many corporations to convert to remote labor, motivating mainland Americans to relocate to more temperate climates.
However, the flood of wealthy newcomers who must obtain residency and purchase property in Puerto Rico within two years of moving in order to keep the tax breaks, Home prices have risen, displacing residents who can no longer afford to live in their communities. Many residents have already left the island after Hurricane Maria wreaked havoc on thousands of homes in 2017.
The real estate bubble that began in San Juan, the capital, has spread over the island, with investors moving away from the metropolitan center and into smaller villages such as Rincón.
Aside from those seeking tax savings, there are newcomers who are buying up houses and driving up rents and home prices. The finance and tech investors, though, who have legally sought for tax-break status, have attracted the greatest interest.
Many of them are bitcoin traders who have started hosting weekly happy hours at a beach side bar in Rincón.
For its mainland-style chicken, a new BBQ food truck that started in August accepts Bitcoin, Ethereum, Cardano, Shiba Inu, Solana, and Litecoin.
Many Puerto Ricans are concerned about gentrification, which has prompted some to question how an economy based on tax favors for the wealthy can benefit local inhabitants who are increasingly unable to afford property.
Gloria Cuevas Viera, a Rincón native who is helping to spearhead the struggle against gentrification, said, “It feels like Hurricane Maria put a ‘For Sale’ sign on the island.”
Many investors purchase residential homes with the intention of reselling them at a higher price or turning them into short-term vacation rentals, transforming entire neighborhoods into Airbnb corridors and depleting local inventories. Puerto Ricans make about 43% of the population live under the federal poverty level.
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