The Construction Association of Puerto Rico

written by BVC April 20, 2016
The Construction Association of Puerto Rico

Serving the island’s construction industry

The Construction Association of Puerto Rico was founded 54 years ago as an extension of the National Homebuilders Association (NHA) in the United States. “It was, basically, a local chapter aligned with the same vision that the National Homebuilders Association had at the time,” says Ricardo Alvarez Diaz, the current President of the Associations’ Board of Directors. “Throughout the years, it evolved quite a bit, and even though we kept the relationship with the NHA, the reality is that, in Puerto Rico, it became an association that focused on developers, investors, and decision makers in the construction industry. A lot of our members not only developed residential properties, they also developed commercial, tourism, hotel and all sorts of construction-related developments. So, after 54 years, we realized it was time for us to remove the word ‘Home’ and just keep it as the Construction Association of Puerto Rico, representing the reality of our membership.”

Today, the Construction Association of Puerto Rico serves it members is a variety of ways, including lobbying, advocacy, networking, and education “When you talk about lobbying, we either promote, create, or in some cases, acknowledge and back different legislation that affects our industry,” says Diaz. “At the same time, it’s a networking association and an education group. We spend a lot of time on seminars and different activities to educate our membership on topics that affect them. We’re very successful when it comes to the education part, especially now. And we have very strong ties with different associations, like the MBA, the Mortgage Bankers Association, the engineers, the architects, the contractors. We have a very good relationship with many of them.”

Diaz reports that the Association’s membership is very diverse. “We have developers not only from Puerto Rico, we have developers from the U.S. who come to Puerto Rico to develop and they become members, too. And that creates a network for local developers to learn and see what’s happening in the U.S. And some of our local people are also developing outside of Puerto Rico. One of them is developing hotels in Orlando and Tampa; another one is in the Dominican Republic developing housing. So, even though it’s a local association, a lot of our developers are actually working elsewhere.”

There are three tiers of membership in the Association: builders, developers, and investors; associates, who are those who have some relationship with the construction industry, such as suppliers, etc.; and professionals – licensed architects, lawyers, brokers, and accountants, or others who are involved with the industry via their professional services. “Our revenue comes from membership, from seminars, from luncheons, from annual conventions, from golf tournaments,” Diaz explains. “And a big part of our revenue comes from sponsorships from suppliers and different members of the industry.”

“We have over 100 members, right now,” adds Diaz. “Those numbers have dwindled quite a bit because of what happened in 2008 and the fact that we began the recession in Puerto Rico in 2006. But we are starting to see some serious growth. In the last year, we’ve seen 15 percent more members either coming back again after they left, or new members. These new members are mostly international people coming from different places – Canada, the U.S. – wanting to invest in Puerto Rico and they feel that the first place they need to invest is to become a member of the Association.”

Diaz says that the Association keeps in touch with its members via a monthly newsletter, the Association’s website, and a weekly email. “We also have Twitter, LinkedIn, and Facebook; so we’re active in social media,” he says. Updating its communication platforms has been a key focus of the Association lately, since, according to Diaz, there is an undeniable “changing of the guard.” “The Millennials are slowly taking over,” he says. “The sons and daughters of family companies are taking leadership of them. So, we’re in an exciting time because of the generational change – the new energy and the confidence that we perceive within the membership.”

The Association’s staff is quite small – there’s only an Executive Director, an Assistant Director, and a receptionist. That is because the Board of Directors, which according to Diaz is “one of the most respected boards of any association on the island for the quality of people we have and their importance within the industry and the economic development of Puerto Rico,” has decided to farm out much of the Association’s day-to-day responsibilities. For example, lobbyists are under contract and press and social media people work out of a public relations company. “So, we’ve been able to maintain with a limited, slim amount of people, while offering very accurate and efficient service because we contract a lot of it,” he says.

As the Association looks ahead, Diaz says that Puerto Rico’s construction industry is being challenged to respond to the changing needs of the island. “We have to be creative,” he says. “We have to come up with different options – a new vision when it comes to building.” As an example, he cites the need to bulk up the rental housing market. “Rental was not something that was traditionally a big business. A very large number of people here owned their own property – way higher than in the U.S. – so there wasn’t a culture of rental. Now we’re starting to see developers come in and develop projects for rental purposes.”

A similar change is taking place regarding mixed-use communities and seniors housing. “Because of the ‘suburb mentality,’ you almost didn’t get any mixed-use communities; but you’re starting to see a revitalization of those,” Diaz states. “Elderly home projects: you’re starting to see a lot of those, too. That was not a part of the culture, before. Assisted Living was not a business model for years, here. It was actually frowned upon if you sent your parents to one of those facilities. Now it’s seen as a very good option. Affordable housing – HUD (the federal Housing and Urban Development agency) has determined that there is a need over the next five years for 30,000 more housing units and out of those 30,000, most of them are affordable housing. As a matter of fact, affordable housing is going to be the pillar of development in the next five to ten years.”

As the local landscape for the island’s construction industry continues to change, Diaz says that the Association’s structure will likewise continue to grow and adjust. “We are in the process of finalizing some strategic relationships,” he reports. “For example, we’re going to sign an alliance with Habitat for Humanity Puerto Rico, which is going to become our social side of the Association instead of developing our own. We also are strengthening a relationship with the government. We just signed an agreement with the Roosevelt Roads Redevelopment Authority, which is a quasi-government agency that’s looking to develop 8,000 acres. And we want to work together with them to develop ideas and projects for our members. We also have a relationship with ‘Together for Puerto Rico,’ which is a local foundation that’s focused on creating new options and developments for the island. And finally, we’re in the process of creating a new chapter for the Urban Land Institute, the ULI, through our Association, the same way that we are part of a national builders association chapter, we will become the ULI chapter in Puerto Rico, with a focus on land planning.”

When asked why membership in the Association is the smart thing to do, Diaz is unequivocal in his response: “If someone is looking to invest and do business in Puerto Rico, in matters of construction and real estate, certainly, they need to find out how to become a member,” he says. “Because as soon as they do that, they’re going to have access to many people, locally and internationally, who have done it before, who are successful, who would add value to their investment, and direct them in the right way – from permits to development, to land ownership – all those things can be done through our Association. So, for many of the people who are moving to Puerto Rico, or are looking to invest in Puerto Rico, our Association would be the first place to look. The first place to call is our Association.”

AT A GLANCE

WHO: The Construction Association of Puerto Rico

WHAT: A trade association representing the island’s construction sector

WHERE: San Juan, Puerto Rico

WEBSITE: www.constructorespr.com

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