Public nuisance properties are seen by some as real estate investment opportunities that can generate tens of thousands of dollars through short-term rentals, long-term leases or resale after renovations. But as Puerto Rico faces an affordable housing crisis, several initiatives have emerged to expand access to these properties for people who do not own homes and live in the municipalities where they are located.

Managing abandoned houses and buildings, which for years have been a nuisance to mayors and neighbors, is a complicated process that usually takes time, as the municipality gathers the information needed for a court expropriation before the property can be transferred to a buyer.

In 2024, estimates from the U.S. Census Bureau’s American Community Survey indicated that Puerto Rico had about 237,426 vacant homes, though not all of them qualify as public nuisance properties. To meet that definition, they must be uninhabited, abandoned and pose a risk to health and safety, among other criteria established by law.

Of the 78 municipalities, dozens have privatized the management of their public nuisance properties. That practice declined after multiple irregularities came to light in the processes for declaring properties public nuisances, notifying owners and appraising the properties, among other problems.

Some municipalities still use a privatized process. Las Piedras, Arroyo, Aguadilla and Corozal have contracts with CRSG, a company that charges a fixed expense fee of $16,522.11 for each property assigned to it from the public nuisance inventory, regardless of the property’s size or type. The buyer of the public nuisance property assumes that cost.

By contrast, municipalities such as San Juan, which manage their own public nuisance programs, do not charge a fixed fee. Instead, they charge an additional 10% of the appraised value, as established by the Puerto Rico Municipal Code. If expenses exceed that amount, the buyer also assumes the additional cost.

Although the most common way to rehabilitate a public nuisance property is to sell it to the person who made a direct purchase offer, there are other ways to manage the transfer of unused properties. Land trusts and land banks have emerged as alternatives that can help guarantee affordable housing and prevent displacement.

Caño Martín Peña Community Land Trust

Five years ago, the Caño Martín Peña ENLACE Project Corporation, the Group of the Eight Communities Surrounding the Caño Martín Peña Inc. (G-8) and the Caño Martín Peña Community Land Trust in San Juan, began studying the mechanisms available to address the problem of abandoned properties in their communities that, because of their advanced deterioration and the danger they posed to neighbors, could be declared public nuisances.

After reviewing the public nuisance acquisition process being used by most municipalities, they concluded that it did not align with the mission and vision of their community project. They wanted to address the problem in a way that protected residents, provided affordable housing and prevented speculation, displacement and outside investors from entering their San Juan communities, Mario Núñez, executive director of both the Community Land Trust and the Caño Martín Peña ENLACE Project Corporation, told the Centro de Periodismo Investigativo (CPI).

That is how they developed the criteria that properties would have to meet to be declared public nuisances, with a focus on respecting and protecting residents’ rights.

After visiting each of the Caño Martín Peña communities, they created an inventory and, on Dec. 6, 2025, signed a collaboration agreement with the Municipality of San Juan and the Center for Habitat Reconstruction (CRH) so that all properties in the communities surrounding the Caño that are to be declared public nuisances will be bought by the Community Land Trust and the ENLACE Project Corporation.

Ricardo Cortina Aldebol, real estate asset management director for the Caño Martín Peña Community Land Trust, explained that the agreement seeks to ensure that properties declared public nuisances — when their owners cannot be found or fail to rehabilitate them — are transferred to the Caño Martín Peña Community Land Trust, which residents created as a mechanism to prevent displacement. In this way, the trust will develop housing for families who must be relocated because of infrastructure projects in the area, allowing them to remain in their community.

The Caño Martín Peña Community Land Trust was created by Act 489 of 2004 to administer land the government transferred to residents amid concerns over land speculation that could arise after the dredging and canalization of the channel, the ENLACE Corporation director told the CPI. Since its creation, its guiding principle has been that the land should not be sold, to protect residents of Barrio Obrero (San Ciprián and Marina), Buena Vista (Santurce and Hato Rey), Las Monjas, Parada 27, Israel y Bitumul and Cantera, neighborhoods.

“That means that, with [the Community Land Trust], the land remains in perpetuity in the hands of the trust — that is, in the hands of the community. Residents are recognized as the owners of their homes. They own the surface rights, and title to the land belongs to the trust, which means it belongs to everyone because the trust belongs to the community,” Cortina Aldebol said.

On Feb. 13, the Community Land Trust submitted to the Municipality of San Juan an inventory of the first 39 properties it has identified as potential public nuisances, to begin the formal process of declaring them as such and eventually expropriating them for transfer to the trust. So far, there are 518 potential public nuisance properties in total, including 46 lots, 70 ruins and 402 structures, Cortina Aldebol said.

“The houses have to be uninhabited, and the priority is to give the owner the option of keeping the property and making the necessary repairs. If it is formally declared a public nuisance, the agreement provides that it may be acquired only by the ENLACE Project Corporation or the Community Land Trust. It does not allow acquisition by third parties,” explained planner William Alexander McCormick Rivera, executive assistant to both entities.

For the Parada 27 and Las Monjas communities, the agreement with the municipality gives them greater confidence that public nuisance properties in their neighborhoods will go to community members, rather than becoming vehicles for displacement by speculators and investors.

Aileen Morales Vargas, chairwoman of the board of the Parada 27 Community Association, described to the CPI how residents constantly encounter outsiders who offer to buy properties there. She said that in her neighborhood, unlike in other G-8 communities, residents own both the structures and the lots. Because the land is not held by the trust, it is easier for residents to sell to third parties, the community leader said.

“Our community has the largest number of older adults. Many of these people have died, their children live in the United States and they are not interested in returning to Puerto Rico. So those people (the buyers)  identify them, talk to them and, well, many of them end up selling. There is a structure next to my house that an investor came in, bought and is now selling for $330,000. A structure that does not even have parking!” Morales Vargas said.

Community Land Banks

With assistance from the Center for Habitat Reconstruction, eight municipalities have chosen to establish community land banks to manage their public nuisance programs.

These land banks operate as municipal nonprofit corporations that seek to acquire and rehabilitate abandoned, vacant or ruined properties, restore them and turn them into affordable housing, CRH Executive Director Luis Gallardo Rivera said in an interview with the CPI.

He explained that under this type of agreement, each municipality must approve ordinances establishing the legal framework for managing the program to acquire, rehabilitate and transfer these properties. A board of directors for the land bank is created, composed of the mayor, the municipal planning director and five other people, along with a Community Advisory Council with representation from the municipality’s communities.

Unlike the Caño Martín Peña Community Land Trust, a private entity created to regulate collective land tenure, a land bank is a public corporation whose purpose is to acquire and rehabilitate abandoned, vacant or ruined properties, restore them and make them available for use by residents through sale.

After the process of identifying, declaring and acquiring public nuisance properties, the municipality, instead of selling to a third party, transfers title to the community land bank. The bank can sell the property under the regulations approved in each municipality. For example, it may determine that the buyer must be a municipal resident or someone from the municipality who wants to return because they were forced to rent in another town, or that the buyer must be a first-time homebuyer, a person with limited resources or meet any other requirement the community land bank chooses to establish as public policy.

The towns of Hormigueros and Vega Baja already have community land banks in operation.

The Municipality of Hormigueros, working with CRH, compiled a list of 348 abandoned properties, about 100 of which were rehabilitated by their original owners after signs were posted announcing the municipality’s intent to declare them public nuisances. Hormigueros Mayor Pedro García Figueroa told the CPI that 250 abandoned properties remain, 81 of which have already been declared public nuisances.

Of those, the Municipality of Hormigueros is preparing to acquire 24 properties: 10 through the traditional compulsory expropriation method and 14 through the abandonment acquisition process. This mechanism allows a municipality to acquire structures that have been declared public nuisances for more than five years without any interested party — whether an owner or heirs — appearing. To use that mechanism, the municipality must document the entire process, from the first notice and the posting of signs to cleanup and show that for more than five years no one has shown up to claim or repair the property.

García Figueroa explained that Hormigueros also used the process for buying inherited properties and transfer them to the land bank.

“We found that the University [of Puerto Rico] was inheriting properties. These are properties where a person dies and has no heirs. We wrote to UPR, and the properties were transferred to us. We transferred them to the [Hormigueros Land] Bank. One of them has already been rehabilitated and is ready to be auctioned,” García Figueroa said.

The mayor emphasized that only people who do not own a home may acquire public nuisance properties in his town. Some properties will be transferred to the land bank, while others will be auctioned through an “affordable auction” mechanism in which only low- or moderate-income people may participate, including residents or children of bona fide residents of the municipality who live in flood-prone areas and have to move, and will use the property as their primary residence, among other requirements.

These people, who usually cannot participate in a competitive auction process, will have the opportunity to obtain financing through credit unions. In the future, the mayor does not rule out the possibility of approving financing directly through the municipality.

“This project is for the people of Hormigueros, not for land grabbers. We are identifying public nuisance properties in communities to turn them into affordable housing for Hormigueros residents and the children of Hormigueros residents who do not own homes. The only buildings that business owners might be able to acquire — and they are the fewest — are commercial properties in the town center that would allow economic development in the area,” García Figueroa said.

A case study by the Liga de Ciudades de Puerto Rico published in March 2026 designated Hormigueros and its Community Land Bank as a model to follow in addressing Puerto Rico’s housing crisis.

The Liga de Ciudades de Puerto Rico is a nonprofit organization created by municipal governments from both political parties to strengthen municipalities’ ability to provide services to their communities. The organization studies and documents municipal best practices so they can be replicated in other municipalities and institutions facing similar challenges.

The Municipality of Vega Baja transferred 11 properties to the Vega Baja Community Land Bank Inc. The first was sold in early May for $92,000, confirmed Kenneth M. Nieves, president of the land bank’s board of directors.

The transferred properties are published on the Vega Baja Community Land Bank’s website, where interested people can fill out a prequalification form that is evaluated by the bank’s Community Advisory Council. Nieves explained that this body, composed of community representatives, decides who the property will be sold to.

As in Hormigueros, Nieves said anyone interested in buying a property must live in Vega Baja or be the child of someone from Vega Baja, must be a first-time homebuyer and must have low or moderate income, among other requirements. The land bank will also seek to offer financing.

“There were many applications in this first sale. We even received applications from private-sector buyers. The person who got it is a single father, a working man, low income, from Vega Baja, had government assistance and was a first-time buyer,” Nieves said.

With the sale, the land bank recovered the money from its fund that it had used to rehabilitate the property. But not all properties will be repaired. Nieves said that decision is made by the bank’s board and council on a case-by-case basis.

“The house was sold for $92,000, and the repair cost was $57,290, from funds received through the CRH fund [whose maximum available amount is $75,000]. The approximate gain for the land bank was $34,710,” Nieves explained.

Isabela and Yauco have also approved their respective ordinances for their public nuisance programs. Adjuntas has just registered its land bank with the Puerto Rico Department of State, while Guánica, Utuado and Naguabo are close to incorporating theirs officially.

The island municipality of Culebra also has the Culebra Community Land Bank, but it is not a municipal corporation. It is an initiative that emerged from the community. Since 2021, leaders of Mujeres de Islas Inc. have sought to create a project to help Culebra residents access affordable housing. Through the land bank, they established a tool to address the housing crisis that, because of the island municipality’s tourism value and the proliferation of short-term rentals, has driven up the cost of buying or renting in Culebra.

That is how the Culebra Community Land Bank was born: to pick up abandoned properties in the island municipality, rehabilitate them and make them available to Culebra residents or children of residents who do not own property, Mujeres de Islas co-founder Dulce María Del Río Pineda told the CPI.

Del Río Pineda said this is the first land bank that is not a municipal corporation but was instead created as an organization with representation from all of Culebra’s communities. The project launched in March, and they are raising the funds needed to acquire a first property.

The community organizer said the idea was initially developed with the municipal administration as an alternative to managing public nuisance properties, but along the way, the municipality decided to handle the disposal of those properties independently. Still, they believe that the mayor is committed to collaborating with the land bank.

“Mayor [Edilberto Romero Llovet] was at the land bank’s launch and gave his support for working together. We have always worked in collaboration with the municipal administration — meaning that, even though it is a community bank, the intention is that when they identify public nuisance properties, the bank can be an option,” Del Río Pineda said. The mayor of Culebra did not respond to several interview requests from the CPI.

The mayor of Culebra did not respond to several interview requests from the CPI. On social media, the municipality published a recent notice clarifying that it does not currently have an official inventory of public nuisance properties and that it is in the process of identifying, evaluating and administratively investigating the status of properties that could receive that designation in the future.

Toa Baja Mayor Bernardo “Betito” Márquez García announced in 2021 that he would establish a community land bank to manage abandoned properties and provide affordable housing with CRH. Later, after amendments were made to the Municipal Code, he preferred that the municipality manage the public nuisance program internally, without the intervention of a third party. That program is still being designed.

Auctions to the Highest Bidder

In the Municipality of San Lorenzo, there is no land trust or land bank, but Mayor Jaime Alverio Ramos said he did not want public nuisance properties to be used for speculation or property hoarding through direct sales.

“No one should be profiting from the process,” Alverio Ramos said in an interview with the CPI.

So, the municipal administration chose to put those properties up for competitive public auction to the highest bidder. Interested buyers made their offers orally during the auction. In March 2026, the municipality auctioned five public nuisance properties it had already expropriated, becoming the first municipality to use public auctions to dispose of abandoned structures.

In this way, San Lorenzo manages its Public Nuisance Eradication Program without intermediaries. The program is handled by its director, an attorney and a field technician who visits each property’s community to notify residents and verify whether the structure meets the parameters to be considered a public nuisance and whether neighbors know who the owners are, the mayor said.

In San Lorenzo, for example, the municipality identified 437 properties it said posed a public health hazard. In 43% of the cases, the owners came forward and took care. Another 105 have already been declared public nuisances, and 145 are being declared public nuisances.

The municipal program has three phases. The first, which began in 2025, consists of identifying structures; buying and selling those with no owner or whose owners are not interested in repairing them; lowering costs by using municipal personnel; and creating a fund. The second phase involves establishing a community land bank to restore properties and offer financing to people who do not have access to traditional banking. A third phase, projected to begin in 2036, would renovate the remaining homes and donate them to people with limited resources.

“In this first phase, we are also demolishing properties that are not habitable. To get to the second phase and talk about affordable housing, we need to sell these properties and raise new revenue so we can renovate them and offer financing through a land bank. We can’t do it if we’re broke,” said Alverio Ramos, who estimated that if a structure does not have to be demolished, the management and expropriation process can entail costs of $4,000 to $7,000 per unit.

Although the mayor says he wants to use auctions to prevent property hoarding, he acknowledged to the CPI that, beyond avoiding direct purchases, he is still not clear on how he will prevent the same person or company from acquiring several structures in public auctions.

“We have not found that San Lorenzo has a problem with land grabbers. If one person comes in wanting to buy everything, we would have to see how to regulate that. In the first auction, this didn’t come up. We are closely watching what happens in the next auctions, and if changes are necessary, they will be made, but we do not anticipate having that problem,” Alverio Ramos told the CPI.

Before the public auctions, the municipality holds an open house so interested buyers can visit the properties and see their condition. On the day of the auction, anyone who wants to participate as a bidder must register by presenting valid identification and a $5,000 cashier’s check for the property, made out to the municipality.

San Lorenzo does not give auction priority to people who are from the municipality or who do not own a home.

The auction winner hands over the cashier’s check, which is deducted from the winning bid amount. The bidder has up to 120 days to pay the full amount or loses the $5,000 deposit and has one year from the signing of the deed to repair the acquired property. If the bidder fails to comply, the municipality may exercise its right to reclaim the property and put it back on the market.

During the first auction, San Lorenzo awarded five properties and seven more in the second, with prices ranging from $9,000 to $104,000 per structure, for a total of $707,000 for the 12 properties. In the second auction, two properties were left unawarded because no bidder showed interest. They were moved into an inventory to be sold at a discount, the mayor explained. Both processes were quick, lasting barely 15 minutes. Ten of the 12 properties were auctioned for more than the municipality’s proposed price.

The Municipality of Aguas Buenas, meanwhile, is considering establishing the public auction mechanism, Mayor Karina Nieves Serrano said. She was in San Lorenzo to observe the first auction process. Nieves Serrano said she also wants the management of public nuisance properties to remain in municipal hands.

Vega Baja tried to auction two properties last year using sealed bids. However, the bidding process was canceled because the adjacent property was abandoned, and officials decided to restart the process so that property could also be declared a public nuisance, according to Susana María Pesquera Colom, an attorney with CRH.

In 2023, San Sebastián used the auction mechanism to sell properties declared public nuisances to the highest bidder, allowing interested buyers to submit written offers in sealed envelopes before expropriation. The minimum bids for each structure included the appraised value plus 10% for administrative expenses. After selecting the future buyer, the municipality began the expropriation process.

Warning About Auctions to the Highest Bidder

CRH’s executive director said competitive auctions to the highest bidder can allow municipalities to maximize resources and generate revenue quicker, but they do not necessarily favor affordable housing.

“The [public nuisance property] goes to whoever can pay the most, and that is usually the person who needs housing the least because they are trying to make money. They buy it as an investment,” he said.

Gallardo Rivera said the main purpose of establishing a public nuisance management program is not to sell houses but to eliminate the risk these structures pose to the community. During the process of identifying public nuisance properties, he said, the municipality must do everything in its power to find their owners.

“If the main purpose of a program is to make money, it is wrong. A good public nuisance management program is aimed at getting owners to show up and rehabilitate their properties, not at creating an inventory to put them up for sale,” Gallardo Rivera said.

Affordable Housing Auction Concept Emerges

The Municipality of Isabela will also use public auctions to sell five properties declared public nuisances on June 25, Mayor Miguel “Ricky” Méndez Pérez announced. But he added another type of auction, in which two additional properties will be offered for use as affordable housing.

At 10 a.m., the affordable housing auction will be held, allowing people to acquire one of two properties with the commitment that it will be used as a primary residence. Requirements to bid include living in a rented home or being related to an Isabela resident, having an annual income between $20,000 and $70,000, and presenting evidence of financial capacity, whether through certifications of available funds or loan prequalification from financial institutions, among other requirements.

In this affordable housing auction, prequalified bidders will submit offers in sealed envelopes, which will be evaluated by a board that will award the properties.

The second auction will be a live auction at 1:30 p.m. for five properties to be sold to the highest bidder in a process like San Lorenzo’s.

This affordable housing auction model was also adopted by municipal ordinance in Hormigueros, CRH Public Policy Director Alicia Díaz Santiago told the CPI. Juana Díaz and Manatí will implement it soon, she added.

This translation was generated with the assistance of AI and reviewed by our editorial team to ensure accuracy and clarity.