Santo Domingo –
Legislation that favors tenants who violate rental contracts and a tax structure that penalizes those who invest in real estate are two reasons behind the shortage of long-term rental properties in the country.
This situation affects young people in search of housing for themselves or their families. Most new units are one- or two-bedroom apartments suitable for short-term rentals through systems like Airbnb. Three-bedroom apartments are now rare.
According to El Día, Alberto Bogaert, the President of the Association of Real Estate Agents and Companies (AEI), reports that units developed in central areas primarily cater to the demand for short rentals. However, larger units can still be found outside the city center.
Bogaert notes that the lack of tax incentives for developers has restricted the construction of buildings for long-term rentals in central areas. He believes that with tax incentives, sectors outside the city could also be developed.
“Developers focus on trends, and the cost of land has increased significantly, which is why they focus on investment projects such as short-term rentals,” adds Bogaert.
Legal certainty is crucial for the real estate sector’s development, and the Dominican Association of Housing Builders and Developers (Acoprovi) has repeatedly emphasized the need to update the Real Estate Leases and Evictions Law.
Acoprovi calls for the inclusion of new obligations and requirements for owners and tenants to encourage new investments in the sector.
Short-term rentals have experienced a boom in the areas of Punta Cana and Greater Santo Domingo due to the lack of incentives to construct long-term rental buildings.
Several apartment buildings have been constructed and sold to investors as suitable for short-term rentals, thereby increasing availability for tourists. This is good news for tourists as the prices are attractive, especially when compared to hotel rooms in the city. Hoteliers argue that short-term rentals represent unfair competition.