Unheard Voices of Puerto Rico

Dozens of pigeons roamed around the Plaza de Colón in Old San Juan. They were not afraid to go up to the tourists that were mingling together enjoying the warm weather. The plaza was mostly filled with locals, and a few sat on a bench smoking a cigarette, which was rare to see on the island.  

One man dressed in shades of pink and a cowboy hat bought a soda from the food stand in the plaza. Michael Hoxsey, an expat from Michigan, moved to Puerto Rico because there is more of a sense of community. He is only in Puerto Rico for five and a half months this year and then eight months in 2023. Hoxsey admitted he loves Puerto Rico, but he has some strong political opinions towards the government.  

When asked if he is aware of Act 60, he responded, “Oh yeah, it’s horrible.”  

The island has been drawing in more tourists to help boost the economy after the damage caused by the Category 5 Hurricane Maria in 2017 which destroyed homes, local businesses and schools. In 2019, Act 60 enabled Act 20 and Act 22 that were passed in 2012 to attract investors to the island to promote economic development.   

Since then, Puerto Rican businesses have been replaced with fancy restaurants, luxury hotels and Airbnb’s.  

Alberto Maldonaldo, chief executive and administrative officer of the Roberto Hernadez Center at the University of Wisconsin-Milwaukee said in the last five years, Airbnb’s have been multiplying across the island.  

“Locals are losing some of the shares they want to own,” said Maldonaldo. 

Locals are not only losing some of the shares that they want to own, but they are being pushed out of their homes because of the wave of gentrification.  

This is particularly apparent in Rincón, a popular surfing town on the west coast of the island. The municipality is notably different from the others in Puerto Rico. English speakers from the mainland can be found roaming the streets of Rincón, hanging out and eating outside of the restaurants along the main road. In other municipalities, only a handful of people speak English well. The municipality is like a little Americanized village, making it the perfect place for entrepreneurs. There is even an overhead structure with the words “Rincón, el mejor lugar para vivir,” translating to “Rincón, the best place to live,” engraved on it.  

Before the wave of gentrification, many locals would have agreed that Rincón is the best place to live, but when investors buy property in places like Rincón, they raise the housing prices forcing locals to move because they can no longer afford to live in the area. 

Investors are buying properties over the appraisal value which is creating an imbalance in the market. 43.4% of Puerto Ricans live in poverty, according to the U.S. Census Bureau, so many Puerto Ricans cannot afford another place to live once they are ejected. 

Puerto Rico has become a tax haven for investors and entrepreneurs and many Americans from the mainland are taking advantage of the benefits. To qualify for the benefits, one must have residency in Puerto Rico. 

The IRS lists the criteria for establishing bona fide residency in Publication 570. One must live on the island for 183 days and have a “tax home” in Puerto Rico during the tax year and also have a “closer connection” to Puerto Rico than anywhere else.  

Once someone has gained residency, they qualify for a series of tax benefits including exemption from U.S. federal tax on income and capital gains under Act 22. Under Act 20, export service companies can get a 4% corporate tax rate and exemption from full tax on dividends. 

Wealthy investors like Logan Paul, an American YouTuber and boxer, were drawn to the island to avoid paying higher taxes on the U.S. mainland. Paul moved to Dorado, 15 miles west of San Juan, avoiding the 37% capital gains tax in Los Angeles. Paul along with other entrepreneurs who are taking advantage of the island have faced backlash from locals. 

Hoxsey said the idea to bring capital to the island to improve it is not working.  

“It’s decidedly not working for Puerto Ricans,” said Hoxsey. “It’s working great for investors. It’s working like shit for Puerto Ricans. That’s colonial power right there. That’s the imposition of imperial demands on a rural country.”  

He said Puerto Ricans are colonial subjects.  

“You can call it an American territory if you want, but that’s semantics,” said Hoxsey. “It’s a colony and it’s ruled imperially by the United States.” 

Hoxsey said the government continuing to “dominate and extract” is an insidious system.  

“We’re in a tropical paradise with all the wind and solar energy that you could ever want,” said Hoxsey. “Post-Maria there was every opportunity to fix the power system here which has always been problematic.”  

After Hurricane Irma and Maria hit, more than 50% of the population was without power, according to the U.S. Economic Development Administration. 

The government has installed a corrupt system where instead of using the money to repair public institutions, they pocket the money, according to Hoxsey. After Hurricane Maria hit, Hoxsey said millions of dollars were granted to repair Puerto Rican institutions, such as, public beaches, but instead they were “backdooring and selling the property.”  

“Selling property for individual gain,” said Hoxsey. “That’s the kind of thing that exists here.”  

José Levee, 73, of Salinas, Puerto Rico expressed that the United States helped more than the government after the hurricane. He said organizations in Texas came to clean out destroyed homes from the hurricane.

Gentrification is not the only issue that Puerto Ricans are suffering from. The U.S. Supreme Court ruled in April that congress can deny Puerto Rican residents SSI benefits because they do not pay all federal taxes.  

SSI benefits are available in all 50 U.S. states, but not in some U.S. territories. The program is meant to benefit people who are 65 and older who meet the financial qualifications.  

Levee said the government is not listening to elderly people. 

“This is a very bad thing because the help is for everyone,” said Levee.  

He said they cannot deny the help of people who have done things for society.  

Elderly people cannot get any monetary benefits either, according to Levee.

“I feel very, very sad,” said Levee. “I feel let down by the government.”  

The issue at large is that it depends on the status of living on the island versus the mainland to determine what rights people can have.