This is the second installment in a series of three articles that explore measures adopted to stop the impacts of the gentrification phenomenon. Read the first article here: What lies behind the phrase: “If the foreigner buys, it’s because the Tico sells”?
Gentrification in Guanacaste is a beast with many heads. It can be seen in the pastures where cows eat next to “For Sale” signs with very high prices in U.S. dollars. Sometimes it looks like a crowded community; other times like a ghost town of mansions, or like a beach with conditional access.
It’s a word that has been gaining more and more ground among citizens, who recognize its manifestations as a problem that needs to be solved. It has already made the news on national television, been discussed in the Legislative Assembly and, this year, Bad Bunny put that word in the mouth of the entire world with his latest album.
It’s clear that this is a situation that doesn’t just affect Guanacaste and Costa Rica, and that’s why many countries have already been forced to apply measures to halt the effects of gentrification. What are some of those solutions that are being put in place internationally?
Many of the measures that different countries and cities have in common to stop gentrification have to do with regulating the real estate market.
Rent control: The excessive increase in rental prices in communities along Guanacaste’s coast is a fairly common situation. In Spain, they combated this problem by means of Decree Law 6/2024, which regulates excessive increases in the price of temporary rentals and renting rooms. It originated because many residents in cities such as Madrid and Barcelona have been displaced due to the inability to pay the established prices, which are aimed at wealthy or tourist sectors. The penalties for violating this law can reach fines of up to 90,000 euros (about $94,000 USD).
Tax on empty houses: The Spanish Housing Law allows surcharges of up to 150% on the property tax (Spanish acronym: IBI) for owners of vacant houses who do not put them up for rent. In Spain, a house is considered vacant when it remains unoccupied continuously and without justified cause for a period of more than two years. José Mancillas, an anthropologist and professor at the Autonomous University of Barcelona, explained to The Voice that the intention of the law is to encourage these houses to be put up for rent.
“I imagine that those who own the properties [in Guanacaste] are people who possibly live in the United States. In this case, doubling the tax payment could be a trivial matter. The fine or the consequence has to be so enormous that it really matters to them,” stated Mancillas.
Read: Guanacaste, a tourist paradise with empty houses
Farewell “Golden Visas”: After the economic recession of 2008, Lisbon encouraged bringing foreign capital to the country through fiscal policies such as creating golden visas, which provided legal residence to people outside of the European Union in exchange for real estate investments. This has turned 60% of Lisbon’s housing into tourist apartments and driven out around 30% of its population since 2013. Following protests against the increase in rental prices in 2023, the prime minister revoked the golden visas. Those already granted can only be renewed if the people who obtained them by purchasing a home live in it, if one of their descendants lives there or if they offer it on the long-term rental market.
Restriction on rental platforms: Mexico City’s congress approved a reform to the Tourism Law to mitigate gentrification and unfair competition on digital platforms such as Airbnb and Booking.com. With the modification, homes registered on these platforms can only be rented for six months per year, and it also prohibits social welfare homes or houses rebuilt with public funds from being used for this purpose.
Additionally, individuals or legal entities that offer this type of accommodations must be registered with the city government, submit a biannual report on their activity and can’t have more than three properties registered on the platform.
It’s a step in the right direction, according to Gustavo Marín, an anthropologist and researcher at the Center for Research and Advanced Studies in Social Anthropology (Spanish acronym: CIESAS) located in Mérida, Yucatán, but he affirmed that the motives for the regulation aren’t in response to demands from citizens.
These regulations are in response to pressures from the hotel industry and not from the local populations,” Marín commented.
Development of public and social housing: Public housing policies in some European cities have worked as a shield against the increase in rental prices in recent years. Vienna, the capital of Austria, has 25% of rental housing managed directly by the city government and if social housing subsidized by the state but built by cooperatives or private associations is included, the percentage rises to around 60%.
In Amsterdam, the Netherlands, 47% of housing is social rental. That means that almost half of the apartments in the city are required to be rented for less than 879.66 euros ($922.78 USD) per month.
According to Wendy Molina, Costa Rican sociologist and former Minister of Housing and Human Settlements, regulations of this type make it much easier to control prices or freeze them to stop the population from being forced out.
That’s a legislation that we don’t have in our country. We don’t have any type of subsidy in the housing financial system that is directed at rental housing, only to the acquisition of your own housing. We are very behind with respect to what could be implemented as a solution and therefore very vulnerable to everything that is happening to us,” she explained.
First things first
In Heredia, where there was once a coffee plantation, there are now condominiums. The streets and sidewalks that lead to them remain the same. Here in Guanacaste, farms and pastures have given way to mansions and rental accommodations.
Pablo Acuña, an architect and professor at the University of Costa Rica (UCR), explained that in the country, land use certificates are governed by three major descriptions: rural land dedicated to agricultural or conservation activities, developable land, where services must be provided and the needs of future urban land must be supplied, and urban land, where there is construction development.
What we have is that more and more rural land is being ceded, and it jumps from rural land to urban land, without even going through the developable process,” Acuña commented.
Cities like Barcelona, Vienna and Amsterdam have “a historical advantage,” commented Wendy Molina: fairly robust legislation and urban planning.
“Unfortunately, coastal areas, exactly like Guanacaste and the South Pacific, are mainly where there are no regulatory plans. When we don’t have a zoning system that gives us a plan, we have a territory that is 100% for sale, 100% vulnerable to economic pressure when the building permit application comes,” affirmed the sociologist.
Barely half of the cantons in the country have a regulatory plan. The other half is in the process of establishing them. That’s why Molina believes in the importance of joining the processes of elaborating these plans and being watchful of what is planned to be implemented in them, such as zoning, heights, building densities and land uses.
José Mancillas agrees that the lack of urban planning is the root of the problem and the first thing the country should begin to regulate.
“If you tackle the problem when it arises, which is basically that anyone can build wherever they want, you avoid all the problems of control over accumulated properties and things like that. Unfortunately, the lack of control is a common denominator everywhere, but it seems that it is more so in Latin America,” explained the Spanish researcher.
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