| Arecibo, Puerto Rico
The Arecibo metropolitan area, located
approximately 50 miles west of San Juan, includes the three
municipalities of Arecibo, Camuy, and Hatillo. As
of July 2001 the area had a population of 176,420, a 0.09-percent annual rate of growth since the 2000
Census.
The metropolitan area’s economy, once dependent
on agriculture, is now based on trade, services,
construction, and the manufacture of electronics, apparel, industrial machinery, drugs, and chemical
products. In the agricultural sector dairy and
livestock products have replaced sugar production.
Nonfarm wage and salary employment averaged
32,627 during 2002, an increase of 983 jobs, or 3.1
percent over 2001.
Manufacturing jobs represent 17 percent of total
nonfarm employment and have remained at
approximately the same level over the past 2 years. The
area’s manufacturing employment is expected to
improve in the long term with the planned
construction of a $300 million biotechnology plant by
Merck, Sharpe & Dohme. This facility is expected
to bring more than 300 new jobs to the area. In
addition, Caribe Pak, a cardboard container
manufacturer, is expanding its operations and will hire
approximately 100 employees to establish an
estimated annual payroll of $1.3 million.
Residential building activity totaled 1,096 units for
12 months ending February 2003, up 166 units, or
18 percent, compared with the same period a year
ago. Single-family homes accounted for 914 units, or
83 percent of this total, and multifamily condominium units constituted the remainder. New home sales
have been strong with single-family detached homes
accounting for 77 percent of all sales and condominium apartments made up the remainder. More than
45 percent of sales are for single-family units priced
at $70,000 or less. These units are built under
Puerto Rico’s Affordable Housing Program, which
offers tax exemptions to housing developers while
providing downpayment and mortgage interest
subsidies to moderate-income families. During 2003 the
government will start construction of 7 new projects
in the area totaling 700 units. The sales market is
forecast to remain healthy as new and existing
homeowners continue to take advantage of low
mortgage interest rates.
With area growth the demand for rental housing
has increased since 2000, putting pressure on the
market and resulting in tightening market
conditions, especially in the municipality of Arecibo.
Production of new market-rate multifamily rental
housing has been nonexistent in the metropolitan
area. The relatively low renter income in the area
often makes development infeasible. Demand is
expected to continue to be met by single-family
rentals and small-scale construction, typically
second-story apartments built above existing
single-family homes.
In Arecibo Advancer Development Corporation, a
Community Housing Development Organization is
building 21 three-bedroom rental apartment units
for families. The units will rent for $356 a month,
excluding utilities, and receive assistance from
the HOME and Low-Income Housing Tax Credit (LIHTC) programs. In Hatillo the Puerto Rico
Department of Housing is financing the construction of six three-bedroom apartment units. These
dwellings receive HOME assistance and will rent for
approximately $360 a month, excluding utilities.
Several other construction projects will have a
positive economic impact on the metropolitan area. The
construction of a $4 million, 50-room hotel in
Hatillo is expected to generate 55 new permanent
jobs. The municipal government will build a baseball park, community center, and basketball court
that combined will cost $600,000 in federal funds.
In addition, the city will complete road and sanitary
system improvements costing $780,000 and rehabilitate approximately 60 housing units at a cost of
approximately $575,000. All of these projects are
expected to bring approximately 160 construction
jobs to the municipality. Arecibo will rehabilitate
23 recreational facilities including basketball courts
at a cost of $1,093,000, spend $700,000 for
reconstruction of municipal roads and sidewalks, repair
a municipal theatre costing $300,000, and use $190,000 to rehabilitate 20 single-family housing
units. These projects will generate approximately
160 jobs in construction-related trades.
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