Community Land Banks: An Alternative to Displacement in Puerto Rico?

SAN JUAN, PR — “We started taking care of ourselves because we knew help was not going to come from any place.”

By:
Carlos Berríos Polanco
Published in
February 11, 2024
Right to Belong
Political participation

This story was made possible thanks to a partnership between 9 Millones and Proximate, a not-for-profit media platform that reports about emergent participatory models that shift power to people with lived experience.”

Migdalia Pérez Montalvo is a community leader in Toa Baja’s Ingenio neighborhood. She has been “officially” working in her community since Hurricane Maria tore through Puerto Rico in 2017, but “unofficially,” she has been looking out for her neighbors since she was young, whether that meant helping her elderly neighbors clean their houses or cooking meals for the community.

The Ingenio neighborhood has about 1,600 families, Pérez Montalvo estimates, mostly composed of elderly people and multiple families crammed into single houses. Accurately counting Ingenio’s population is hard because some homes are occupied yet look abandoned, while others are well maintained but empty. Between 2010 and 2020, there was a 16 percent decrease in the municipality’s population.

Pérez Montalvo poses for a photo outside the Impacto de Dios Pentecostal Church in Toa Baja, Puerto Rico on Dec. 9, 2023. She, alongside an organization Hope Engineers Inc, holds monthly events where they give out groceries to Ingenio community members. (Photo by Carlos Berríos Polanco/Proximate/9 Millones)

This dynamic can be explained by current real estate trends in Puerto Rico. Fueled by tax breaks, developers are buying up properties to turn them into short-term rentals as foreign investors “rush for a slice of paradise.” While there are over 257,000 empty houses, there is also a shortage of accessible housing —in part, because there are an estimated 25,000 short-term rentals across the archipelago. Accessible housing is a necessity for more than 40 percent of the population living below the poverty line, according to the US Census.

Knowing her community was in need, Pérez Montalvo got involved with the Toa Baja Land Bank, the first of its kind in Puerto Rico. She hopes that this initiative will help people in her community acquire accessible housing.

The situation in the Ingenio neighborhood is only one of many happening all over Puerto Rico. U.S. Census data indicates that the archipelago has seen a nearly 12 percent decline in population over the last decade, contributing to an aging population as the younger generations flee in hopes of work opportunities and higher life quality in the United States. Lack of affordable housing and a shortage of doctors and medical specialists have also caused people to leave. This migration was exacerbated by Hurricane Maria in 2017, when over 123,000 Puerto Ricans (about 4 percent of the population) left permanently.

A seemingly abandoned house in Toa Baja, Puerto Rico on Dec. 02, 2023. Many houses and buildings throughout the municipality have been left in disrepair because their owners cannot take care of them. (Photo by Carlos Berríos Polanco/Proximate/9 Millones)

It is within this context that land banks, like Toa Baja’s, are being created in Puerto Rico to address one of the root causes of displacement: the lack of affordable housing.

A solution under trial

Pérez Montalvo, who helps run the Asociación de Comunidades Unidas Tomando Acción Solidaria (ACUTAS) community center in Toa Baja, never specifically planned to get involved with the municipality’s land bank. She had written a letter to the municipality saying that she wanted to participate in any and all drives that would help the community. Eventually, she became one of many community advisers for the land bank, seeking to place the needs of the community at the forefront.

An aerial view of the Ingenio neighborhood on Dec. 09, 2023 in Toa Baja, Puerto Rico. The community often floods when it rains heavily, because of their proximity to the La Plata River. (Photo by Carlos Berríos Polanco/Proximate/9 Millones)

Community land banks, first created in St. Louis in 1971, are public or quasi-public entities created to acquire unused property to then be repurposed for community needs. In many cases, the properties acquired by land banks are turned into low-income housing or open green spaces. Throughout the U.S. there are more than 250 community land banks —approximately 80 percent of which were created thanks to state statutes.

Land banks are new to Puerto Rico. They first came to the island through 2020’s Municipal Code, which allowed for their creation and facilitated the legal structures necessary to receive properties through the Public Nuisance Management program. The archipelago’s first land bank was created in 2021 in Toa Baja, as a collaborative effort between the municipality’s government and the Centro para la Reconstrucción del Hábitat (CRH), a nonprofit organization focused on addressing the problem of abandoned and foreclosed properties in Puerto Rico.

“The typical model, and how it has been in Puerto Rico until the present, was that houses were simply sold on the market. They go to the highest bidder. Obviously, low- and middle-income people cannot participate in that type of auction,” said Luis Gallardo, executive director of the CRH. Land banks were invented to address this necessity and help “stabilize communities” with affordable housing.

“When you create a space for the community, they have a voice and they can participate in the decision making… that practice, by design, is a way to combat displacement because you’re giving [the community] an opinion and a direct role,” – Luis Gallardo

So far, five municipalities have approved land banks: Toa Baja, Vega Baja, Yauco, Hormigueros, and Isabela. Together, the five municipalities have over 222,000 residents, according to the 2020 U.S. Census.

The process a land bank follows to acquire a property has several stages. First, abandoned and unmaintained properties —or those whose property taxes have not been paid— are identified in a given community. CRH has already done this in over a dozen municipalities. If an identified property appears to be abandoned, several attempts are made to contact the owner. If the owner does not respond, the municipality begins the process to declare it a public nuisance,  expropriate it, and finally transfer it to the municipality’s land bank. The municipal government takes care of “cleaning” the title deed and paying any debts, while the land bank’s administration handles restoring the property and finding a buyer that matches the organization’s community goals.

Although Toa Baja’s land bank is the first one in Puerto Rico, subsequent land banks have already adapted its structure for their own needs. Vega Baja’s land bank, incorporated in December 2023, added a provision in its municipal ordinance which allows for the property’s price to be changed to meet the appropriate buyer’s needs.

However, there are still some obstacles to face before progress is achieved. Although the Toa Baja Land Bank is the furthest along, it is still looking for volunteers to serve as advisers and fill out the board of directors, made up of the mayor and several community members.

The Toa Baja Land Bank’s board of directors has identified about 200 properties that would be the easiest to expropriate and donate to the land bank, according to executive director of the land bank Eric Marrero. The reason for the delay is twofold. First, these properties must be evaluated  by an agronomist and an appraiser. Second, it’s a process that has never been done before in the archipelago, so it has been hard to find funding.

“We’re a new alternative and we’re trying to do things right,” Marrero said.

Obtaining financing for Puerto Rico’s land banks has been one of the many challenges, but Gallardo remains confident that once people see the purpose they’re supporting, funders will come around. In fact, the CRH was recently given a $50,000 grant by the Hispanic Federation for their land bank programs. The majority of funding for land banks across the U.S. mainly comes from government grants, appropriations, and real estate revenue, according to the Center for Community Progress.

“Once we get the first one, I know the rest will fall like dominoes,” said Héctor Mármol, a pastor who also serves as an adviser to the Toa Baja Land Bank.

Mármol has been working with the community since the aftermath of Hurricane Maria, when he and his wife would distribute food and water to communities. When he was contacted to be a part of the land bank after Hurricane Fiona —a Category 1 storm that swept through Puerto Rico in 2022— he only had one condition: “it’s not to hang out with the mayor around town. But if it’s for me to help the community, then I’m available.”

Building trust with the community is an essential part of the process, both Gallardo and Marrero emphasize. Although the executive director of the land bank is not from Toa Baja, he claims it leaves him with “no political commitment, relationship or favoritism.” In order to maintain a transparent process, one of his first actions was to ensure that neither employees nor the board of directors can benefit from the land bank.

Citizens who apply for the Toa Baja Land Bank’s properties are put in a tiered point system. The first people who should benefit from the land bank are those who live in Toa Baja, but cannot afford to rent or buy in the municipality. First responders and medical personnel are second on the list. When it comes to people who had to move out of Toa Baja, but were raised there, the intersection uses a point system based on how long they lived there and other criteria.

Foreign investors buying properties remain a big worry for people across Puerto Rico, as they drive up rent for the surrounding properties and could potentially price people out of neighborhoods. For Pérez Montalvo, she worries that her community could disappear if this type of displacement continues. She hopes that the land bank’s properties could be used for a community child care center, where mothers can safely leave their children to be cared for, or a house for elderly neighbors who cannot afford to live in a center for the elderly.

“When you create a space for the community, they have a voice and they can participate in the decision making… that practice, by design, is a way to combat displacement because you’re giving [the community] an opinion and a direct role,” Gallardo explained.
A worker with One Stop, a career center, discusses findings for the community’s integral resilience plan in case of emergencies with Toa Baja neighbors. Residents were approving key information to make sure it accurately meets the community’s needs.

Looking to the Past to Understand the Future

Although Puerto Rico’s land banks are just starting, looking at the country’s most famous community land trust (CLT) could give another example of land banks’ potential. Unlike land banks, CLTs are private entities that own the land where buildings stand. While the two are often confused or seen as opposites, they can complement one another. “In many places, they coexist and feed off of each other,” Gallardo said. He explained that land banks acquire and sell properties while CLTs preserve them long-term.

The Caño Martin Peña CLT —a world-renowned organization that has legalized the relationship between over 2,000 families and the land they live on— serves as a similar example of how communities can work together to establish more just relationships between them and the places they live. It started with nearly 200 acres in its care. Since then Proyecto ENLACE —a public corporation that connects several entities developing the area— has gradually purchased more land, always consulting the community first about their needs, according to Mariolga Juliá Pacheco, director of the Office of Social Development and Citizen Participation for ENLACE.

They have also worked with the government to accelerate projects, such as the dredging of the Caño Martín Peña canal. Currently, they are acquiring properties along this channel and helping occupants move to different houses in the same area, ensuring they will not be affected by potential flooding.

A map of the Caño Martin Peña in the offices of Proyecto ENLACE in San Juan, Puerto Rico on Nov. 02, 2023. The community collectively owns nearly 200 acres of the Caño. (Photo by Carlos Berríos Polanco/Proximate/9 Millones)

Much like with Puerto Rico’s land banks, the community trust has allowed ENLACE to do their work for nearly 20 years, explained Juliá Pacheco. The Caño Marin Peña CLT board of directors is composed of six community members, two members from the municipal and state government, a member of the ENLACE board of directors, and two citizen experts chosen by the G-8, a community non-profit that consists of eight communities in the Caño Martin Peña.

“We start by [acknowledging] the government has to be at the table. The government cannot be hands-off and the community is in charge of everything… Whether municipal or state, the government has a responsibility to its citizens,” Juliá Pacheco said.Tweet

When it comes to curbing the impact of short-term rentals on the Puerto Rico housing market, a robust regulatory framework is needed to strengthen the very lax governmental measures, writes the Center for a New Economy.

Juliá Pacheco emphasized that while CLTs and land banks are specific solutions to specific problems, without an expansive public housing policy that provides low-cost housing and curbs short-term rentals, displacement and gentrification will continue to occur. Marrero echoed her sentiment, saying “a land bank does not substitute the functions of the municipality.”

Land banks and CLT’s form the patchwork of solutions from communities fighting displacement from within, ensuring that families will be able to live comfortably in areas that are being bought up for a revolving door of tourists and investors across Puerto Rico.

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