For the past seven years, Marialys Santiago Martínez has lived in Cabo Rojo with her husband and son in a rented home in Plan Bonito, a sector of Miradero.
She was neither born nor raised there, but she considers herself a caborrojeña by adoption: Cabo Rojo is where she spent the best years of her youth. For more than two years, she has searched for a property to buy for her family in the coastal town. That dream, she said, keeps slipping farther away.
“Every day it gets harder,” Santiago Martínez said. “Homes are incredibly expensive — and there aren’t many available.”
The last house she toured in 2025 was purchased by a U.S. resident for more than its appraised value, paid in cash. Santiago Martínez, who sells cars for a living, had made an offer and had financing lined up. But she lost out to the higher all-cash bid. The home was later converted into a short-term rental by its new owner — part of a broader trend in Cabo Rojo.
Puerto Rico’s Tourism Co. reported that Cabo Rojo had 816 short-term rental units as of mid-2023, making it the municipality with the third-highest number of short-term lodgings on the island, according to data provided to the Centro de Periodismo Investigativo (CPI) as part of a public-records lawsuit. CPI later reported that the tourism agency’s figures were understated because not all operators are registered as such, as required by law.
Santiago Martínez said she has largely given up hope of owning a home in Cabo Rojo.
“I’ve had so many bad experiences that I stopped looking,” she said. “It’s draining.”
Photo by Abimael Medina | Centro de Periodismo Investigativo
She believes the planned Esencia project — a luxury community proposed by Cabo Rojo Land Acquisition LLC — will further reduce her chances of finding a home by driving up prices across the remaining vacant-property inventory in Cabo Rojo. The U.S. Census Bureau estimates the municipality has about 9,500 unoccupied housing units; more than half, however, are used seasonally for vacations or weekend stays.
The CPI found that the median sale price of properties in Cabo Rojo rose from $129,500 to $200,000 between 2019 and 2024 — a 54% increase — after analyzing sales data posted on the real estate platform TasaMax. The Esencia project was announced in May 2024.
In transactions that included an appraisal, the median appraised value increased from $134,450 to $216,000 over the same period — a 61% jump.
The spike in Cabo Rojo home prices is shrinking the chances for middle-class and low-income families to find a home in a market that was already competitive, the investigation found. A shortage of affordable units, sales above appraised value and the lack of effective government programs to make rentals or homeownership accessible have all compounded the pressure.
Beyond the rise in both sale prices and appraised values, the CPI’s analysis found a 290% increase in purchases made above asking price or above appraised value from 2019 to 2024. That surge is not unique to Cabo Rojo; it reflects a broader trend across Puerto Rico since 2019 that accelerated in 2021.
The CPI reviewed 1,376 real estate transactions recorded in the municipality from 2019 through 2024 using the TasaMax platform. Data from 2025 were excluded because the total number of transactions in the system could be incomplete. The findings — which include both sale prices and appraised values — underscore Santiago Martínez’s concerns.
Fewer options for the middle class
For more than three decades, Sandra Pagán Gallardo lived in Boquerón, a neighborhood in Cabo Rojo. Originally from Mayagüez, she moved there to live with her wife, drawn by what she saw as a safer community for LGBTQ+ people. In recent years, Pagán Gallardo tried to buy a home, but she said it was impossible, forcing her to move from one rental to another.
As property costs have climbed, sellers have also grown more reluctant to accept buyers who rely on government financial-assistance programs for home purchases.
“Right now, I’m in a tiny house (…) and eventually I’m going to have to leave. It would crush me — it would break my heart — to have to move to another community at 63, because we’ve built a community here in Boquerón,” Pagán Gallardo said in an interview. She died last week.
Like Santiago Martínez, Pagán Gallardo feared property prices would climb if Esencia moved forward, further reducing her chances of buying a home.
“Nearby, here in Boquerón, we went to look at a house — and you know what an 85-year-old man told us?” she said. “He told us he wasn’t going to sell because he was going to wait until Esencia gets built so he can sell it for a million dollars.”
The CPI interviewed nearly a dozen real estate agents who agreed that home sale prices in Cabo Rojo have risen since the luxury development planned for Boquerón was announced. Their on-the-ground accounts align with the sales data analyzed by the CPI.
The agents told the CPI they have repeatedly encountered owners who insist on listing homes in Cabo Rojo above appraised value, assuming Esencia will draw more buyers — and more people looking to move to the area.
“You run into those clients all the time,” said real estate agent Noemí Alicea González, referring to deals she has seen in Cabo Rojo. “Word has gotten around that people are paying above appraisal, and anyone who wants to sell knows the house appraises at $140,000 but says they want $160,000 — and ‘I’m not selling for appraisal,’” she added.
Alicea González said properties have sold above appraised value, in cash. “Many people with cash are coming in, and many people have paid above the price”, she said.
Cash sales in 2024 were eight times higher than in 2019, according to TasaMax property data. In 2024, of the 337 property sales in Cabo Rojo, 99 were cash purchases.
Real estate agent Michelle Maloy Dufour said she, too, has heard from prospective clients who want to sell above appraised value, confident that Esencia’s construction will drive up demand for real estate in the town. She has also seen an increase in interest from foreigners and from Puerto Ricans in the diaspora who want to buy homes there.
“Cabo Rojo has been a sleeping giant that’s now drawing the attention of a lot of people,” she said.
No strategies to expand affordable housing
The housing market dynamics in Cabo Rojo could lead to the displacement of local residents if the Esencia project moves forward, according to a recent report by economist Ricardo Fuentes Ramírez examining the tax incentives granted to the project.
In the report, Fuentes Ramírez said the development will push out local residents unless safeguards are put in place to prevent negative economic effects.
“The success of the Esencia Project will depend largely on [the Municipality of Cabo Rojo’s] ability to mitigate the impact of this residential complex on the local housing market,” Fuentes Ramírez warned. “Without government intervention, the speculative real estate boom and the unchecked growth of short-term rentals [Airbnb, among others] will drive local families out of their own communities,” he added.
The economist urged the Municipality of Cabo Rojo to create a Cabo Rojo Housing Affordability Fund, financed through property-tax revenue tied to Esencia and through a review of the fees charged for short-term rental licenses. He said the fund would allow the municipality to establish affordable housing programs and promote sustainable economic development initiatives aimed at preventing displacement.
Economist Antonio J. Fernós Sagebién, a professor at the School of Business at Universidad Interamericana de Puerto Rico’s Metropolitan Campus, said the rise in home prices in Cabo Rojo was to be expected given the economic activity the project is projected to generate.
Fernós Sagebién believes Esencia “should bring many benefits.” Still, he said its impact on Cabo Rojo’s housing market will depend on whether the development delivers on what it pledged in its application for tax incentives — and whether those commitments align with the government’s and the private sector’s economic development goals..
“If comparable sales go up, people sell for more,” he said.
“If appraisals rise, municipal revenues rise. That’s very normal,” he added. “Infrastructure investment also brings other investment projects that create direct, indirect and induced jobs. Certain economic sectors benefit from a geographically captive market,” he said, when asked about the factors driving increases in housing costs and property values.
Fernós Sagebién pointed to Dorado, Río Grande, Humacao, Ponce and Guayama as examples of coastal municipalities where tourism-oriented residential complexes have been developed — and where property prices later climbed.
Luis Felipe Nieves Velázquez, interim director of the Department of Business Administration at the University of Puerto Rico at Carolina, said that in Cabo Rojo, as in other coastal towns, proximity to hotels and tourist lodging influences property values. “With a luxury project, the expectation is that property prices nearby will rise,” he said.
The development of commercial buildings and new roads can also affect property values, he added.
Benefits for whom?
Sales above appraised value can also inflate the value of nearby properties, said Nieves Velázquez, who is also a licensed real estate broker. That benefits sellers, but it reduces buying opportunities for people who rely on financing to complete a purchase.
Nieves Velázquez explained that banks typically approve mortgages based on the appraised value. If the sale price exceeds the appraisal, the buyer must cover the difference out of pocket—an arrangement that favors people with cash on hand.
“Investors are businesspeople who take risks,” he told the CPI. “Generally, they’re people with money in hand who don’t depend on financing.”
Esencia Disrupts the Market
Real estate agent Ruby González Serrano said she knows people who, in response to the Esencia project, are looking to make a range of investments in Cabo Rojo — not only in real estate.
“When the project is finished, it’s going to have an impact on Cabo Rojo. I can’t tell you whether it will be positive or negative because there could be displacement of the town’s residents,” she said. “With a minimum wage of $10.50 an hour, no one can buy a $200,000 house because they won’t qualify for a bank loan unless they’ve saved half the money. What we could see is displacement of locals — of young people from Cabo Rojo.”
Another real estate agent, Laura E. Rosas Valdespino, said developers had been interested for years in building a residential or tourism complex like Esencia in Cabo Rojo. But she said Esencia’s ripple effects have helped land that had sat on the market for years to finally sell.
“I’m worried it will be so exclusive — so exclusive — that it creates those [extreme social and economic] gaps in Cabo Rojo,” Rosas Valdespino said.
Soleil Ruiz, also a real estate agent, said she knows owners who have taken advantage of Esencia’s announcement to list their properties above appraised value. In 2025, she said, she has noticed more interest from foreigners, Puerto Ricans on the island and Puerto Ricans in the diaspora looking to buy in the municipality.
“I’ve had clients tell me, ‘I want to sell, but I want to sell at this price [above appraisal] because when they build Esencia, it’s going to be worth a lot more,’” she said.
González Serrano noted that the sale price is negotiated between the seller and the buyer, while the appraised value is what the market dictates.
1/2 Screenshot of a map showing the boundaries of the 1,549 cuerdas (about 1,500 acres) where Esencia is planned, along with points of interest around the site.
2/2 Screenshot of a conceptual image showing what public access to the beach would look like within the Esencia project.
In its recently published 2024-2030 Five-Year Plan to address Puerto Rico’s housing crisis, the Puerto Rico Department of Housing recommends rehabilitating abandoned structures, promoting new affordable housing projects, encouraging the preservation of low-cost homes, expanding financing options for local buyers, formalizing titles for informally held properties and pursuing other strategies.
The report notes that Puerto Rico’s median property value is $121,800, while Cabo Rojo’s reached $200,000 in 2024, according to TasaMax. Median household income in Puerto Rico is $24,002; in Cabo Rojo, it is about $26,000, according to U.S. Census data.
In February, the Puerto Rico Institute of Statistics released its latest data on median income by municipality. The analysis highlights a widening gap between households in the San Juan metropolitan area and those elsewhere on the island — an economic disparity that has sharpened over the past five years.
Limited government assistance
Although the Government of Puerto Rico has offered help for home purchases through incentives under different administrations, Raúl Santiago Bartolomei, a professor at the University of Puerto Rico’s Graduate School of Planning in Río Piedras, said the State has failed to ensure that mortgage payments and property taxes — among other obligations — remain sustainable for buyers over the long term.
The Puerto Rico Department of Housing provides up to $60,000 toward the purchase of a new or existing home through its Direct Buyer Assistance Program, now known as Pronto Pa’ Tu Casa (Down payment for your home). From the program’s launch in 2020 through February 2026, at least 178 home sales in Cabo Rojo were completed with assistance from the program, according to data provided by the agency.
The number of properties in the town purchased through the program is “extremely low,” Santiago Bartolomei said.
He argued that the program’s success will depend on its “ability to ensure sustainable, affordable financing for the people who need it,” so that, eventually, “they don’t fall into default, as has happened [with other similar programs] in the past.” High long-term payments on financed properties, he added, are compounded by sellers’ reluctance to accept buyers using government assistance programs.
Photo provided
From last June through February 2026, at least one home sale in Cabo Rojo was completed under the Vivienda Joven (Youth Housing) program, which offers mortgage financing to young adults ages 21 to 35 who have graduated from an accredited university, technical or vocational institution.
“Young people are the ones who find it hardest to secure stable, sustained, permanent work — with recurring income that can serve as a guarantee for a bank loan,” Santiago Bartolomei explained. “On top of that, many young people are of working age and typically rent, and because rents are so expensive, that rent eats up the savings they might otherwise have for a purchase down the line.”
According to the Census Bureau, Cabo Rojo has at least 1,800 renter households with annual incomes below $15,000. That income level, for example, would make them eligible for the Housing Choice Voucher Program (Section 8), whether administered by the commonwealth government or by the municipality. Yet only 79 households have rented homes in the past six years through the commonwealth-run Section 8 program, and last year just 103 properties were rented through the municipal program.
The Puerto Rico Department of Housing’s report on the island’s housing crisis acknowledges the need to revise eligibility criteria and income limits to expand the number of families who qualify for the federal Housing Choice Voucher Program, known as Section 8.
In a written response to the CPI, the Department of Housing said it has formed a specialized, multisector working group that meets periodically to advance initiatives such as repurposing “public nuisances” and properties under the agency’s ownership so they can be rehabilitated and sold at an affordable price. The agency also said it is developing an initiative to build housing on land owned by the commonwealth or municipalities. It did not specify what efforts, if any, it is leading in Cabo Rojo considering Esencia.
The Municipality of Cabo Rojo did not respond to the CPI’s questions about what changes it believes are needed to the Section 8 program so more residents can benefit.
Skeptical but cautious
Cabo Rojo Mayor Jorge A. Morales Wiscovitch acknowledged that sale prices and rents have risen in the municipality, but he does not believe Esencia caused the increase.
“Right now, house prices and rents have gone up a bit. Not because the project exists,” the mayor said. “But it’s not correct to say everything gets more expensive, that you can’t find housing. That’s not entirely accurate. Everything has gone up, and it’s likely that properties around [Esencia] will increase — will rise in value. Of course,” he added.
According to data from the Office of the Commissioner of Financial Institutions (OCIF in Spanish) on residential mortgage activity, Puerto Rico saw a 7.5% decrease in financed home sales from 2023 to 2024. Cabo Rojo moved in the opposite direction: those sales rose 32.8% year over year.
The Department of Housing reiterated in its state plan that high housing costs remain one of the Government of Puerto Rico’s central challenges.
To address the need for affordable housing in Cabo Rojo, the mayor said his administration has focused on revoking usufruct rights for abandoned properties in the downtown area. The municipality confirmed it has revoked 111 usufructs — the right to use a parcel of land without owning it.
Photo by Jorge A. Ramírez Portela | Centro de Periodismo Investigativo
The mayor also said the municipal government has held auctions to sell municipally owned lots where buyers could develop affordable housing. But he acknowledged that only one lot has been sold, and 11 remain available. He said the proceeds from those sales will be invested in demolishing structures declared public nuisances or claimed by the municipality through the cancellation of usufruct rights.
Town officials said nearly 100 properties could be declared public nuisances, and they are evaluating at least another 100 in Cabo Rojo’s downtown area. The municipality has 46,876 residents, according to the 2024 census, and about 10% live in rental housing.
“There are always alternatives to work on this, recognizing that there are people who want to get started and have a small home of their own,” Morales Wiscovitch said in an interview with the CPI.
Daniel Hernández, a spokesperson for Cabo Rojo Land Acquisition, did not respond to the CPI’s questions about Esencia’s potential impact on housing costs in the municipality.
The company plans to build 1,132 luxury residences and 530 hotel units. Puerto Rico’s Tourism Co. approved nearly $498 million in tax credits for the project, along with a 10-year exemption from commonwealth and municipal taxes. According to documents the company filed with the Office of Permit Management, the development would encompass 1,549 cuerdas of land.
This translation was generated with the assistance of AI and reviewed by our editorial team to ensure accuracy and clarity.
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1. Employees are typically underpaid because competition for employment enables greedy business owners to hire those willing to accept low wages with little or no benefits.
2. Stagnant property values should not be the result of greedy business owners who underpay their employees, for example, banks and grocery stores. Rather, the minimum wage should be raised commensurate with increased business profits. Greed has a direct impact on
stagnate wages.
3. The Cabo Rojo Municipal Gov’t does not adequately zone properties, nor enforce zoning laws. Cabo Rojo allows established singke famiky communities to be transitioned into trailer park havens. Example: Combate. The lack of communuty planning and management, poor infrastructure, and cohesive direction all contribute to poor economic growth and opportunity.