Four Plans for Shaping the Future of Puerto Rico

In September 2017, Hurricanes Irma and Maria devastated the island of Puerto Rico. Recovery includes looking ahead to design a comprehensive set of plans for short- and long-term recovery.

Work on the plans is being done by Puerto Rico’s Central Office of Recovery and Reconstruction (OCRR) in coordination with the Federal Emergency Management Agency (FEMA), the National Security Operational Analysis Center (HSOAC), and various federal and state agencies.

Ivis García outlines these initiatives for economic, infrastructure, and social recovery.


Hurricane Irma, a Category 5 hurricane with 185 mph winds, tore doors and windows from houses, flew cars onto front lawns, and knocked down centennial trees when it arrived at the island of Puerto Rico. About 14 inches of rain fell on the northeastern part of the island on September 6, 2017, and Irma left 1 million people without power and more than 56,000 without potable water.

Only 40 percent of gas stations and 114 ATMs were open across the island (Government of Puerto Rico 2018). Roads were blocked and covered with debris. Telecommunications systems were destroyed, leaving people without contact for days. About 4,000 individuals were staying at shelters, and four people lost their lives (FEMA 2017).

Two weeks later, on September 20, 2017, Hurricane Maria, one of the deadliest disasters in U.S. history, struck the island. The official death toll is estimated to be 2,975 individuals in Puerto Rico alone (Fink 2018). It was the 10th most intense Atlantic hurricane on record (Willie 2018). Hurricane Maria was also the third-costliest storm in U.S. history — $90 billion — after Hurricanes Katrina ($160 billion) and Harvey ($125 billion).

The most severe loss of life and infrastructure damage was in Puerto Rico, where the two storms caused damage of about $100 billion (The Associated Press 2018). A record was achieved in Puerto Rico: the second-largest blackout in the world after the one caused when Super Typhoon Yolanda hit the Philippines in 2013 (Doug 2018).

According to a FEMA report it was also: (1) the lengthiest air mission delivering food and potable water in U.S. history, (2) the largest delivery of commodities due to a natural disaster, (3) the largest sea-bridge operation of federal disaster aid, (4) the largest disaster-generator installation mission in the United States, (5) one of the largest disaster medical response missions and, (6) one of the largest disaster housing missions in the history of the organization (FEMA 2018).

What the Disaster Revealed

The storm revealed the long-term lack of investment on the island. Maria's wind speeds knocked down 80 percent of the electric wire system, resulting in a 100 percent loss of power (Becker 2017). The power grid will need an investment of $30 billion for power to be restored (Beeler 2018). Puerto Rico Electric Power Authority (PREPA) was responsible for 10 percent of Puerto Rico's $74 billion debt, not counting other debts like pension payments — making the island poorer while unable to improve service (Pierog 2018).

The disaster revealed precarious preexisting conditions faced by many Puerto Ricans. For example, in 2017, the poverty rate in Puerto Rico was 45 percent compared with 13 percent in the United States (American Community Survey 2017). In general, working-age adults and children have been out-migrating at a fast pace for the last decade in search of work and a better quality of life.

Below is a summary of four plans that will shape Puerto Rico’s response to the urgent humanitarian needs of the island’s residents:

  • Economic Development and Recovery Plan for Puerto Rico
  • Fiscal Plan for Puerto Rico
  • Disaster Recovery Action Plan
  • Hazard Mitigation Plan

Economic Development and Recovery Plan for Puerto Rico

On August 8, 2018, the Central Office of Recovery and Reconstruction delivered the Economic Development and Recovery Plan for Puerto Rico to the U.S. Congress for approval. The plan estimates a total of $139 billion in projects for reconstruction.

This plan was delivered in compliance with the requirements of the Federal Bipartisan Budget Act of 2018 (Public Law 115-123), which requires Gov. Ricardo Rosselló and the Central Office of Recovery and Reconstruction of Puerto Rico (OCRR) (previously the Central Office of Recovery, Reconstruction, and Resiliency (COR3) to create a plan before funds can be approved. The plan was supported by the Federal Emergency Management Agency (FEMA) and the Homeland Security Operational Analysis Center (HSOAC).

Titled “Transformation and Innovation in the Wake of Devastation: An Economic and Disaster Recovery Plan for Puerto Rico,” the plan is divided into 17 initiatives, part of making Puerto Rico more resilient to future disasters as well as creating long-term economic recovery (RAND Corporation 2018). The $139 billion in funds would come from the federal government, foundations, not-for-profits, and the Government of Puerto Rico.

The plan identifies projects that impact housing (rehabilitation, reconstruction, and new construction) ($33 billion), improvements to solid waste facilities ($30 billion), and the restoration of energy systems throughout the island ($26 billion):

Communication $3.2 million
Environment $3.9 million
Public Buildings $5.8 million
Health $6.3 million
Economy $6.3 million
Transportation $8.4 million
Municipalities $190 million
Planning $590 million
Education $15 billion
Energy Systems $26 billion
Water Systems $30 billion
Housing $33 billion

For six months, the OCRR, in coordination with the FEMA, the National Security Operational Analysis Center (HSOAC), various federal agencies and state agencies, and other participating entities, held planning meetings with representatives of the different sectors, municipalities, and state and federal agencies to work on the plan. Once a draft was prepared, public hearings were held in Fajardo, Cataño, Ponce, and Mayagüez to receive citizen input. The RAND Corporation, the company that created the plan, conducted focus groups with residents and interviewed stakeholders.

The plan was published online in English and Spanish for public comments. Once the comment period was completed, public recommendations were evaluated and incorporated.

Short-term goals of the plan include:

  1. Restoring essential infrastructure systems, including electrical system, water, communication, and transportation
  2. Improving emergency preparedness through improvement of infrastructure and capacity of government employees to protect citizens in future disasters
  3. Optimizing tenure and responsibility of public facilities and buildings by promoting their repair and reducing future risk

Long-term goals include:

  1. Stopping emigration and fostering economic development
  2. Revitalizing urban centers
  3. Optimizing the scale of public services
  4. Rebuilding the infrastructure
  5. Improving data collection and management for accurate and comprehensive information

Fiscal Plan for Puerto Rico

On October 23, 2018, the Fiscal Plan for Puerto Rico was approved by the Financial Oversight and Management Board for Puerto Rico — an unelected seven-member body that ensures Puerto Rico's $74 billion debt is paid.

The revised Fiscal Plan that Gov. Ricardo Rosselló presented to the Financial Oversight and Management Board will finance the creation of a new government structure that would divide the island into four counties. According to the revised Fiscal Plan, the government would regionalize essential services that are now in the hands of the central government and municipalities including security, education, housing, and family services.

From 2018 to at the end of the fiscal year 2022, the funding reduction to the 78 municipalities would be around $395 million (The Puerto Rico Fiscal Agency and Financial Advisory Authority 2018). According to the Fiscal Plan, this is a blunt blow because it represents the elimination of 100 percent of what they receive from the central government.

It is estimated that by 2022, 71 of the 78 municipalities will be bankrupt because most municipalities depend on that funding. For example, 90 percent of the budget of the municipality of Maricao is funded by the central government (Mercado 2017).

Meanwhile, the Fiscal Plan estimates that the economy would grow by $82 billion over 10 years because of the reconstruction funds. The projection is for an average annual growth of 3.9 percent, which is 20.8 percent for the entire period. An expectation of economic growth influences the estimate of how much interest and principal toward the public debt the government could pay.

When a more optimistic growth estimate is presented, a higher repayment capacity of debt service is also being presented.

Disaster Recovery Action Plan

On February 1, 2018, the U.S. Department of Housing and Urban Development (HUD) through HUD’s Community Development Block Grant-Disaster Recovery (CDBG-DR) program awarded $1.5 billion to support the long-term recovery of Puerto Rico — in particular housing, economic development, and infrastructure outlined in the Puerto Rico Disaster Recovery Action Plan.

This was the first of one of three CDBG-DR disbursement funds that will come to the island. The other ones are estimated to be closer to $8 billion each, for a total of $18.5 billion. After many months of anticipation, on September 20, 2018, the Government of Puerto Rico released its Second Draft Disaster Recovery Action Plan (DRAP) so it could receive the first disbursement of CDBG-DR funds assigned to the island mainly for the reconstruction of devastated housing and the economic development sector.

Funds will be available for family buildings or condominiums through the multifamily housing reconstruction, repair, and resiliency program, so that the infrastructure arrangements of those buildings do not have to be charged, for example, to a maintenance fee or through money that comes from the owner’s pocket.

Likewise, funds will be available to rehabilitate the area surrounding the University of Puerto Rico, Río Piedras Campus, as well as in the Mayagüez university area. Some of the programs included in the Action Plan are:

  • Comprehensive Planning of Community Resilience
  • Repair, Reconstruction, or Relocation Program
  • Property Title Program
  • Mortgage Program
  • Reconstruction, Repair, and Resilience of Multifamily Housing
  • Assistance for Home Buyers
  • Incubators and Accelerators of Small Businesses
  • Tourism and Business Marketing Program and
  • Urban and Rural Agriculture (Puerto Rico Department of Housing 2018)

DRAP funds are divided into $1 billion for housing, $145 million for economic revitalization, and $100 million for infrastructure. The second package not only expands the capacity of action in these lines but also adds more programs, for example, to promote agriculture in urban centers and the economic development of that sector. The plan also allocates funds about $50 million for community planning, including funds for citizen participation. The Foundation for Puerto Rico would obtain the Community Planning disbursement, which would be sub-awarded to municipalities.

The Department of Housing in Puerto Rico is in charge of the process, including the citizen participation that included 15 days of public involvement for the first amendments with no public hearings, and 30 days with public hearings for the second or substantial changes. This was a response to the concerns of the civil sector.

Many organizations and community groups argued there was a lack of time and forums for community participation on that first round of public comments. As a result of these changes, the second participatory process was much more expansive.

After responding to public comments and incorporating some additional elements into the plan, the Department of Housing in Puerto Rico submitted the Draft Substantial Amendment to the Action Plan to HUD for final evaluation and approval on November 18, 2018. As of that date, HUD had 45 days to report whether or not to approve the draft; the U.S. government shutdown has delayed a response.

Hazard Mitigation Plan

Each one of the 78 municipalities needs to either create or update a Hazard Mitigation Plan according to the 2000 Federal Disaster Mitigation Act. The law was passed to encourage the reduction of loss of life and property after a disaster.

The ruling stated that to receive economic assistance from FEMA, municipalities need to prepare a multi-hazard mitigation plan, and these plans need to be revised every five years. Updating these plans is an essential way of continuing to incorporate mitigation practices in the daily operations of municipalities and in the planning of long-term activities that will contribute to reducing the vulnerability of the island to natural hazards.

The purpose of the plan is to identify activities and measures aimed at mitigating hazards such as hurricanes, floods, droughts, earthquakes, landslides, and other atmospheric, hydrological, and geological hazards. The plans will be revised to continue with the reduction of loss of life and property associated with different natural hazards and identify measures to meet the needs of each municipality and its residents in a planned manner. The plans will be ordered to promote sustained development by preserving the physical function and the benefits of conserving natural resources and infrastructure.

The Puerto Rico Planning Board has been given the responsibility as the administrator of this process. On September 2018 the board requested proposals to create or update these Local Hazard Mitigation Plans — some municipalities had planned while others have never created one (Puerto Rico Planning Board 2018).

Although an international company was chosen to conduct all of the mitigation plans, this information has not been made public yet.

In the end, these plans will allow the federal agencies to allocate funding to the different municipalities and address needs in an evidence-based manner. For planners, it will enable the full use of land use planning methods and benefits.

This is an excellent opportunity for capacity building of local planners in Puerto Rico.

Public participation and involvement with the municipalities are critical, and funds from CDBG-DR for community planning could be dedicated for public participation. Of course, municipalities will have to apply for these funds, which will be distributed on a first-come, first-served basis. There are concerns are that the company hired to update the Hazard Mitigation Plans might not engage the public in a meaningful way.

Moreover, municipalities with more capacity to apply for community planning funds would most likely take advantage of them, while municipalities with fewer resources might not.

As of right now, the plans are not expected to be organized multi-jurisdictionally. Also, older plans (when available) have not taken into consideration climate change, which is an element that research has shown to produce more effective plans.

Conclusion

These four plans prioritize housing, economic development, and infrastructure. However, given that Puerto Rico has suffered massive population loss and about 25 percent of properties are vacant according to the most recent American Community Survey, it is unclear why housing in the Action Plan — which determines how CDBG-DR funds will be spent — is being prioritized instead of economic development and infrastructure.

There is a real opportunity for these goals to employ a planning lens with input from practitioners. However, as of right now, they employ little input from local planners, which is a major concern.

Moreover, while the Fiscal Plan calls for regionalization, the other plans are scaled to the municipal level. There is a need to think both locally and regionally.

Finally, although some efforts have been made to increase community participation, planners and grassroots organizations feel that this aspect could be improved.

Top image: NASA astronaut Joe Acaba photographed Puerto Rico from the cupola of the International Space Station on October 12, 2017. Photo courtesy NASA.


Headshot of Ivis Garcia.
About the Author

Ivis García, AICP, PhD

Ivis García is an assistant professor in the City and Metropolitan Planning department at the University of Utah. She is a fellow and board member of the Asset Based Community Development Institute at DePaul University, Chicago.

January 29, 2019

By Ivis Garcia, AICP