Enormous Potential in Puerto Rico's Construction Sector

By Brenda A. Vázquez Colón, The Weekly Journal
June 2, 2020
Resilient buildings necessary in the face of ongoing natural disaster

The crises that have battered Puerto Rico in the past three years after hurricanes, earthquakes, and COVID-19 have not waned the need for the construction of affordable housing and has increased opportunities in this important economic sector, which is pivotal to ensure infrastructure safety and economic development.

“The disasters have increased the need for housing. What you need to look at is the supply chain, how it is going to move globally. There is a lot of access to federal programs, but it will be challenging for the private sector that is not dependent on these funds. Homes will now be more resilient and spaces could be adjusted depending on family composition, although remote work will be more prevalent and many families will think about the issue of space to work from home,” said Emilio Colón Zavala, president of the Business Emergency Operations Center (BEOC), an organization that carries out work related to emergency response from the private sector and non-profit entities.

Apart from building and repairing housing, there is a need to improve or expand complementary services that address the new reality of remote work and education, which entails a myriad new opportunities for the sector that includes contractors, developers, engineers, architects, appraisers, bankers, and realtors, among other professionals who benefit from new construction.

“The energy issue is also important because many people will now have micro-businesses from home and will need a better infrastructure for roads, electricity and telecommunications, because the demand will be much higher. On the other hand, it all depends on there not being an upturn in the virus—that we do not go backwards and close again—but the reality is that now we are safer here than in the United States,” Colón opined.

Meanwhile, the president of the Associated General Contractors of America Puerto Rico Chapter (AGC), Umberto Donato, stressed the importance of building units for the elderly population, as well developing abandoned areas with great potential for community growth.

“There is a tremendous opportunity to build subsidized multifamily residences, low income, nursing homes, units for people with physical limitations, and the revitalization of urban centers that are convenient due to the proximity of transportation services and hospitals, among others. There are also aid programs to purchase residential properties, for housing repair and reconstruction, as well as subsidies for first responders, such as firefighters and police,” said Donato, who is the contractor and designer of the second phase of the residential senior citizen complex, Ciudad Lumen, in Guaynabo, which is under construction.

Possible Shortage to be Seen

The high cost of construction materials has made commercial, industrial, infrastructural, and housing projects more expensive; and may continue to increase because of the pandemic, which is why observing the market is key.

“It remains to be seen whether there will be demand and a shortage of construction supplies. It should raise the cost somewhat, but you have to wait for everything to normalize. Under the new reality, it is necessary to be aware of the urgent factors for the reconstruction of the southern part of the island that needs safe houses,” said Alfredo Martínez-Álvarez, Jr., president of the Puerto Rico Builders Association.

He coincided with Colón in that consumer preferences could change after the lockdown caused by COVID-19, which is why the market would have to adapt to the new lifestyle and work of the average Puerto Rico resident.

“The closing experience will change the perception of people, who will at least want to go out to the patio to sunbathe, which is better than an apartment with a balcony. Later, we will see the changes in people, but there is still a great need because there is a lot of informal housing that has to be attended to. We also need a permitting process that is more streamlined,” Martínez-Álvarez said.

By late 2019, some 19,000 people had already requested CDBG funds, but it was estimated that in reconstruction alone, the need was about 35,000 homes and, when adding the real need for homes under code, the figure exceeded 100,000.

Resilient construction gains ground in Puerto Rico, where roughly 55 percent of existing houses are built outside the guidelines established in construction codes.

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