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Stop Blaming The Developers Of Planned Communities

Sixty percent of Puerto Rico’s homes are built as makeshift construction projects that bypass or don’t require government regulation. This ‘free-for-all’ development is the real threat to the island’s environment.


November 13, 2003
Copyright © 2003 CARIBBEAN BUSINESS. All Rights Reserved.

Yo tengo ya la casita . . . que tanto te prometí: (I already got the little house that I’ve been promising you for so long...)

Lyrics from a popular tune by Puerto Rican composer Rafael Hernandez.

The dream of having your own little house, built as you please and when you please, on your very own little plot of land—without having to follow building codes or environmental regulations—is as deeply rooted in Puerto Rican culture as the popular tunes of Rafael Hernandez.

Yet that time-honored tradition is contributing more to urban sprawl and doing more harm to the island’s environment than the planned housing developments built by big developers, the constant target of criticism by environmental extremists and double-talking politicians.

These unplanned developments are evident along the streets, highways, and secondary roads of every municipality. In fact, it is estimated that as many as 60% of all homes in Puerto Rico are built using the simple land segregation method (lotificacion simple). And the number continues to escalate unabated.

This unplanned and unregulated construction has created a phenomenon called desarrollo al garete, free-for-all development, that threatens to cover the island with a mantle of residential and commercial structures built with no regulatory or environmental controls.

Yet, it’s the developers who are being blamed for the environmental damage and contamination caused by these makeshift developments.

The real culprits

"The real environmental and urban sprawl problem in Puerto Rico is caused by unplanned and unregulated construction [projects]," said Levitt Homes President & CEO Rafael Torrens, a former president of the Puerto Rico Homebuilders Association (PRHA). "This type of unregulated development does not comply with any environmental or building code regulations, and no soil studies or work by an engineer or architect is required."

When agriculture was the main economic activity on the island in the early part of the 20th century, Torrens explained, the Planning Board adopted the simple land segregation method, by which a landowner could divide a plot into up to 20 lots and build a home without going through the same permitting process as developers of planned communities.

Government part of the problem

Environmental contamination, as well as the multiple negative social and economic effects caused by these unplanned communities, is not only allowed but also encouraged by the government through the simple land segregation method.

The simple land segregation method allows a person to build a residence or business structure without hiring an architect or engineer; without submitting blueprints; without providing an infrastructure for potable water, wastewater, or electricity; and without having to follow building code requirements, which allows the structure to be built using whatever materials are at hand.

The fatal consequences of allowing this type of development were evident when Hurricane Georges hit the island in 1998, as these were the only structures that suffered significant damage, noted Torrens.

"The government encourages this type of unregulated development by having a special provision for them, making it easy for anyone to build a home without following a set of guidelines or any type of environmental controls," added Jose Vizcarrondo, vice president of Desarrollos Metropolitanos. "Once they are built, somehow they are able to get water and electricity, even though many of these structures are considered illegal."

Population growth causes housing demand

With nearly four million inhabitants, 9,000 miles of roadway, and 10,000 urban clusters in only 3,500 square miles, Puerto Rico ranks as the 11th most densely populated place on the planet. According to U.S. Census Bureau figures, the island’s population is projected to reach 4.5 million by 2025. Other estimates are even higher, indicating the population could reach 6 million within 20 years.

The number of homes in Puerto Rico has increased 230% in the past 50 years. While 73% of families own their own homes, 70% can’t afford one worth more than $100,000, the average median price for a single-family home. What’s more, most buyers of social interest homes must get some kind of government subsidy even to acquire one valued at $70,000.

Number of unplanned developments up

The number of unplanned developments has increased dramatically in the past few years, mostly because it’s much easier and more economical to build a home or a business structure without following regulations, building codes, and environmental controls and going through a lengthy, costly, and bureaucratic government permitting process like responsible developers do.

The increase in unregulated construction coincides with a reduction in the number of planned developments in recent years due to the government imposition of tougher restrictions (e.g., more red tape in the permitting process) on developers and attacks by community groups that oppose planned community developments.

"There are four million people in Puerto Rico that need places to live, work, and be entertained," said Ivar Pietri, chairman & CEO of Peregrine Development Co. and current president of the PRHA. "As a society, we have a challenge. If we want to retain the good talent here and become a productive society, we must have planned developments. If we don’t, the end result will be more unplanned communities, with more urban sprawl and contamination."

More trees now than 50 years ago

Although community groups complain that developers of planned communities are covering the island with concrete, reducing the island’s green areas, and damaging the environment, evidence proves the opposite is true.

According to estimates by the Bureau of Forest Service of the Department of Natural & Environmental Resources, there were over 2.1 million forested acres in Puerto Rico during the 16th century; by 1948, that number had declined to only 144,780.

The decline, Torrens explained, was mostly due to deforestation to create fields for sugarcane and other agricultural products during the first part of the 20th century.

"The trees’ destruction was caused by agriculture, which required large plots of land," said Torrens. "Trees and forests began to grow again in Puerto Rico when agricultural activity started its decline with the arrival of Operation Bootstrap in the 1950s."

By 1990, the amount of forestland in Puerto Rico had climbed to 728,980 acres, over 400% more than in 1948, thanks mostly to Regulation 25 of the Regulations and Permits Administration (ARPE by its Spanish acronym), noted Torrens. This regulation, he explained, requires developers to plant two trees for every tree cut down or removed during construction. Some trees must also be relocated and replanted, a process referred to as mitigation.

"In planned communities, you end up with more trees than you had prior to construction," said Vizcarrondo.

Unplanned communities, Torrens noted, are not required to plant and mitigate trees, institute soil erosion controls, or even be connected to a sewer line to collect and treat their wastewater.

"We are talking about a high number of these unplanned developments; more than half of all homes in Puerto Rico are built that way. That’s a lot," said Vizcarrondo.

Developers, said Torrens, are not against the simple land segregation method; they just want a set of controls on builders of unplanned communities like the one imposed on builders of planned communities.

"That way, the same environmental protection the government requires [of developers] would also be required of these unregulated developments," said Torrens. "If we continue to allow this type of construction, without imposing any type of controls, the environment will continue to suffer and we will never solve the problem."

PRHA Executive Director Maria Elena Cristi said the criticism of these unplanned developments must not be interpreted as a social clash between the rich and the poor because not all the people that live in these unregulated communities are of modest means.

"Contrary to popular belief, not all residential and business structures in these communities are humble shacks built by the poor; there are luxury, moderately priced, and country-type structures owned by people of all socioeconomic levels, made out of concrete, wood, or a combination of the two," said Cristi. "Some even have pools or other types of recreational facilities."

Environmentally more dangerous

But many of these unplanned structures, regardless of their owners’ social status, use inadequate methods of wastewater disposal, contaminating the environment by utilizing homemade septic tanks or pipe systems that discharge wastewater directly into lakes, rivers, streams, and creeks—and onto the island’s beaches.

"Septic tanks could be a solution, if they were well-built and maintained, but that’s not the case at all in these communities," said Pietri. "Actually, they are the island’s main source of contamination."

Virtually all bodies of water in Puerto Rico are contaminated with fecal waste that comes from these unregulated communities, Pietri said, adding that lake reservoirs such as La Plata and Carraizo, which provide most of the drinking water used in the San Juan metro area, are surrounded by unregulated structures that spill their wastewater into the reservoirs.

In addition to creating environmental hazards, these communities contribute disproportionately to urban sprawl. Many of these unregulated structures are built in the maritime/land zone, and while they might have a minimal infrastructure, they take up more land. Developers build five to seven homes per acre, whereas unregulated communities—which may have only two homes per acre—are less dense, occupy more land, and are more spread out.

Another serious concern is the disposal of household garbage. The boundaries of environmentally sensitive or protected areas are not respected at these developments, and illegal landfills are easily formed.

"Since unregulated developments are spread out and isolated, it’s more difficult to collect their garbage," said Pietri. "So the developments resort to illegal landfills to solve their garbage situation, creating a serious environmental problem."

More costly for government and society

According to Desarrollos Urbanos President Adolfo Gonzalez, unplanned communities are the least expensive solution for the consumer, but financially and environmentally the most expensive for the government and society. He noted they are also the least regulated type of structure, therefore posing the greatest risk during a natural disaster such as a hurricane or earthquake.

Potential flooding is always a concern. "The cumulative effect of so many simple land segregations is causing many flooding problems at these communities due to the lack of erosion and water runoff controls, yet developers are being blamed for it," said Torrens.

"These communities are more expensive for the government to maintain because they are more spread out. When developers create a planned community, they take into consideration the cost of all the services, including payment of road impact fees, water, sewer, and electrical power right from the start," said Gonzalez, who is vice president of the Puerto Rico Home Builders association. "Unplanned communities are bad business for the government because it is more difficult and costly to provide them with services such as police protection, garbage pickup, water, and electricity."

The fact that the government is investing $1 billion in the Special Communities program is proof positive that unplanned and unregulated developments are more costly and their problems more difficult to solve, noted Vizcarrondo.

Torrens said developers have told the government numerous times that environmental controls must be established at these communities, but nothing has been done.

"No one wants to touch the unregulated communities issue with a 10-foot pole due to the political cost involved," said Torrens. "Meanwhile, a massive environmental problem is being created in Puerto Rico."

Local housing market mix

Puerto Rico’s current housing market is based on multiple solutions that serve sectors with different expectations and needs.

Today, 60% of the homes were built under the simple land segregation method, 35% are in planned communities, and the remaining 5% are condominiums and walk-ups, according to PRHA statistics. While the number of condominiums and homes in planned communities has decreased 5% over the past 10 years, the number of homes built under the simple land segregation method has gone up 10% during the same period. Multistory structures such as condominiums provide a higher population density, which is desirable given Puerto Rico’s limited geography. But they have a problem: the higher the buildings go, the costlier they get. In fact, condominiums are the most expensive solution for developers, and low- and middle-income earners just can’t afford them.

On the other hand, walk-ups, now called garden apartments, are multifamily alternatives similar in cost to a single-family home, offering greater population density but, obviously, less space.

"Garden apartments have really helped to increase population density, as 15 to 20 families can be accommodated per acre," said Levitt Homes President & CEO Rafael Torrens. "It’s an accepted alternative that has become popular in suburban areas because it requires less maintenance."

Reinvesting in urban centers

Although developers praise the government’s initiative to reinvest in and more densely populate urban centers such as Santurce, the initiative does have its share of challenges.

"The redensification of our urban centers will happen in phases over a span of 25 to 30 years, not next year or even in the next four. That’s because the infrastructure is outdated, and it will require a serious investment by the government as well as private sector participation," said Gonzalez.

Another issue is the high cost of land in urban centers, which virtually prohibits the development of urban planned communities because no one would be able to afford to live in one.

One example is the social interest housing at Peninsula de Cantera, a special community in Santurce. The cost of the homes, built by the Infrastructure Finance Authority in Cantera, can run as high as $130,000 for a two-bedroom, one-bathroom unit, according to Torrens.

"The cost of land alone in Santurce comes to about $100,000 per unit. No matter how much Santurce may have deteriorated, homeowners are asking $300 to $400 a square meter," Gonzalez said. "The cost of social interest housing will not be solved unless there’s a gigantic government subsidy of at least 50% in urban centers." He added, "Meanwhile, people need to live somewhere, and the only real solution is the development of planned communities in suburbs.

Sustainable development is the best solution

"Sustainable development offers greater population density, security, and planning than the simple land segregation method. It is environmentally sensitive and the lowest-cost alternative for the government," said Cristi.

"There is a great misconception that developers are covering the island with cement and destroying the environment, when the reality is that there’s a huge housing need in Puerto Rico, and developers are supplying that need in a environmentally and socially responsible way," said Torrens. "Would you build homes if nobody needed or wanted them?"

The housing market has become very competitive, and the market demands housing developments that are well-planned and environmentally sensitive, with trees and attractive landscaping, Torrens said. He added that developers don’t charge whatever they want for a house; they charge what the market dictates.

"If we don’t develop responsibly, people will buy their home from someone that does," said Torrens. "We owe that to the real environmentalists, who changed the developers’ mentality so that our projects are in tune with the environment. Now, we are environmentalists more than many of the so-called pro-environmental groups.

"Vizcarrondo agreed: "Developers are also environmentalists. Why are they more environmentalists than we are? We mitigate and plant more trees and protect rivers. What have these communities done to protect their own environment?"

Pietri said he believes sustainable development means providing adequate facilities for everyone, whereas for the so-called environmental groups, it means that developers and their planned communities must be stopped, which promotes the construction of more unplanned developments.

"We as a society must forge a vision as to what kind of place we want for future generations. We must have multiple solutions to our housing problem, but we cannot afford to do nothing and allow more of these unregulated developments," said Pietri. "If developers are stopped, the end result will be more of these free-for-all developments."

What can be done

Torrens said legislative controls must be established requiring existing and newly built homes to be connected to an efficient wastewater treatment system. Additionally, all new structures and all repairs to damaged structures must have a certification from an engineer or architect that the structure meets current hurricane wind resistance and seismic code regulations.

Developers could be required to provide water and sewer connections to a neighboring community as a condition to the approval of a planned development near an unregulated one, said Gonzalez. New projects would then be paying for solving the environmental problems of these communities.

The replacement of trees under Regulation 25, said Torrens, must also be required at all new construction sites in these unregulated communities; basic restrictions on soil erosion and sedimentation must also be put in place.

"A construction permit must be obtained from ARPE for any new construction, repair, addition, or remodeling job to an existing structure at these communities to ensure they are safe," Torrens said, "otherwise, the government will continue to spend millions of dollars in these communities every time there is a natural disaster."

The government, said Pietri, should designate which areas must be preserved and establish mitigation plans for those areas jointly with the private sector.

Gonzalez added that the government should also streamline and simplify the permitting process and regulations for the development of planned communities.

"The net effect of excessive regulation and complex permitting requirements is that it makes developments more costly, which directly affects the working class," said Gonzalez. "People have to live farther away [from a city] in order to acquire an affordable home."

According to a study by research firm Estudios Tecnicos, the price of a single-family home doubled between 1990 and 2000, but personal income only grew 50%. The price of a social interest home, now around $70,000, is expected to increase to $140,000 by 2010, the study shows.

"There will be a point at which housing development projects will not be feasible; people will not have the purchasing power to pay for them if the costs continue to increase due to the high cost of land and excessive regulation and permitting requirements," said Gonzalez.

Life in Puerto Rico, Torrens said, should be like living in a big park that was designed and planned by professionals. "Achieving the change will result in a better Puerto Rico for present and future generations. With certain adjustments, it can be achieved," he said.

Unplanned Communities

  • Do not pay fees to the Puerto Rico Aqueduct & Sewer Authority for regional water distribution or wastewater treatment systems
  • Do not pay fees to the Highway Authority for road improvements
  • Do not pay fees toward the construction of schools, community centers, or recreational facilities
  • Do not follow Regulation & Permits Administration (ARPE) Regulation 25 for the removal and replanting of trees
  • Do not need to meet ARPE’s building code
  • Do not pay construction excise taxes or property taxes to the municipality
  • Do not follow guidelines for soil erosion control
  • Do not prepare, submit, or comply with environmental evaluations or environmental impact statements or perform soil studies
  • Do not have to go through a lengthy and costly government permitting process
  • Promote the creation of illegal landfills

Planned Communities by Developers

  • Contribute to the Puerto Rico Aqueduct and Sewer Authority for regional water distribution and wastewater treatment systems
  • Contribute to the Highway Authority for road improvements
  • Contribute toward the construction of schools, community centers, and recreational facilitiesMust follow Regulation & Permits Administration (ARPE) Regulation 25 for the removal and replanting of trees
  • Must meet ARPE’s building code
  • Must pay construction excise taxes and property taxes to the municipality
  • Must follow guidelines for soil erosion control
  • Must prepare, submit and comply with environmental evaluations and environmental impact statements and perform soil studies
  • Must go through a costly and lengthy bureaucratic government permitting process
  • Must identify and protect environmentally sensitive areas

Developers join forces to help communities protect the environment

A group of eight developers, with planned housing development projects in Guaynabo’s southern section, have joined efforts to curb the environmental damage caused by unplanned or unregulated communities in the area.

The Guaynabo South Combine, as the group of developers is called, plans to invest $30 million to provide water and sewer connections to 1,000 homes that currently spill their wastewater directly into the Guaynabo River and 26 interconnecting creeks and streams.

The affected communities include the Hato Nuevo, Sonadora, Mameyes, Camarones, Limones, Damiana, and Guaraguao sectors of South Guaynabo.

"The septic tanks at these unregulated communities, built and operated without permits under the simple land segregation method, do not comply with the established requirements in their design or operation. As a result, the Guaynabo River has become an open sewer," Rafael Torrens, managing partner of the Guaynabo 10 South Combine, told CARIBBEAN BUSINESS. "Additionally, these communities lack soil sedimentation controls, and the river has also become a depot for trash and garbage."

Torrens, president & CEO of Levitt Homes, noted that community groups such as "Friends of Guaynabo River," who have opposed the establishment of planned developments in South Guaynabo, have done nothing to prevent or stop the contamination of the river.

The urban sprawl caused by unregulated structures in Guaynabo’s southern area, added Torrens, is having a negative and destructive impact on the sector’s forestland.

Torrens said the area is already impacted by unregulated construction under the simple land segregation method, and the only way the area can be improved and protected is through the development of planned communities.

"As ironic as it may sound, only by allowing the development of planned communities will we be able to curb the environmental contamination caused by these communities," said Torrens.

"This will be achieved by eliminating their septic tanks and connecting their sewer lines to those of the Puerto Rico Aqueduct and Sewer Authority, which were built for the planned communities."

Guaynabo South Combine will donate the water and sewer connections, plus an integrated electrical distribution system for 1,000 homes, while water company Ondeo plans to donate the water and sewer connections for an additional 1,000 homes, Torrens said.

The Guaynabo South Combine was established five years ago to share costs and jointly develop South Guaynabo.

Solving the island’s housing problem

Puerto Rico Homebuilders Association recommendation

  • A solution must be found for the pollution caused by the septic systems in simple land segregation method projects.
  • Development of planned communities must be emphasized.
  • Government must maintain a low cost of doing business in Puerto Rico.
  • Roadblocks to professional development projects must be eliminated.
  • Government must find an economical housing alternative that meets and complies with environmental regulations.
  • Government must decide which land is suitable for agriculture, which is suitable for housing developments, and which areas to preserve.
  • Upgrade infrastructure in urban centers.
  • Promote development projects in urban centers.

Alexis Molinares: Unregulated developments have a negative impact on environment

Historically, people have seen unregulated construction under Puerto Rico’s simple land segregation method as a remedy for the chronic housing shortage that has little or no environmental impact, said ecologist Alexis Molinares, an environmental consultant for the Enrique Marti Coll Foundation.

"Where these developments are located—and how they take up space and pollute—does have an environmental impact," Molinares told CARIBBEAN BUSINESS. "If we really want to be honest with ourselves and fair to everyone, we must start to recognize this and look at it as a problem, not just look the other way.

"Unregulated communities that are developed in areas with a propensity to flood or experience landslides have an environmental and socioeconomic impact, said Molinares, adding that when environmental regulations are to be enforced, we must strip ourselves of the instinct to protect certain groups or communities because we feel sorry for them (the Ay Bendito syndrome).

"We could be creating false expectations that these communities are safe, when in reality they are located in areas not suitable to live in," said Molinares. "This happens in many communities found in areas that are prone to flooding.

"Planned development projects, said Molinares, are subject to regulations and governmental supervision and are easy to monitor; on the other hand, unregulated developments are much more difficult to monitor and lightly regulated.

"They also have the social component of the Puerto Rican idiosyncrasy, that we don’t want to deal with this issue because it’s a way for certain people of our society to function under the housing limitations that we have in Puerto Rico," he said.

Molinares said we must break from the false notion that unregulated developments house people of modest means, noting there are people of all socioeconomic levels in these communities. As a way to foster the exchange of ideas and find ways to protect the remaining green areas in our urban centers, the foundation is celebrating its second eco-urbanism congress Nov. 18 and 19 at the Caguas convention center.

Under the theme "Rediscovering our lushness," the congress will consist of a field trip and a series of workshops with renowned experts in the areas of ecology, planning, architecture, psychology, and economics.

"The topic underscores the evident need we all have to enjoy contact with nature, whether individually or in a group," said Molinares. He said among the conference topics will be the efficient use of remaining open spaces.

The keynote speaker for the Nov. 19 luncheon will be Deborah Lev, parks & recreation director of the city of Portland, Ore. Lev previously was director of New York’s Central Park, one of the most dramatic examples of preservation and utilization of a green area in a large city.

This Caribbean Business article appears courtesy of Casiano Communications.
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