11.6 Million Visitors. Zero Airbnb Restrictions. The Caribbean's Housing Crisis Nobody Covers.

Human Becoming

The Landlord Who Stopped Renting to Dominicans

She owns four apartments in the Zona Colonial of Santo Domingo. Two-bedroom units in a restored colonial building on Calle Las Damas, three blocks from the Alcázar de Colón. She bought them in 2018, when the neighborhood was still a place where Dominicans lived. Not exclusively — the Colonial Zone has attracted tourists for decades — but residentially. Families. Small businesses. A colmado on the corner. The woman who sold empanadas de yuca from a cart at the intersection of Arzobispo Portes and Isabel la Católica.

By 2024, the empanada cart was gone. The colmado was a cocktail bar. And she had stopped renting to Dominican tenants.

The math was not complicated. A Dominican family could pay 18,000 to 25,000 pesos a month — roughly $300 to $420 at current exchange rates. An Airbnb listing for the same apartment generated $85 to $120 per night. Even at fifty percent occupancy, the short-term rental produced three to four times the income of a long-term Dominican tenant. She did not make the decision out of hostility. She made it out of arithmetic. The market had spoken, and the market spoke in dollars.

She is not unusual. She is the median. Across the Colonial Zone, across Piantini, across Naco, across the emerging corridors of Gazcue and Villa Francisca, landlords are making the same calculation. The Dominican tenant is being priced out not by explicit exclusion but by currency arbitrage — the structural gap between what a local economy pays in pesos and what a global tourism economy pays in dollars. The apartments are the same. The buildings are the same. The city is the same. The currency is different. And in that difference, an entire class of residents is becoming invisible.

She told a Dominican journalist in early 2026 that she felt guilt about it. She said the word — culpa. But she also said she had a mortgage denominated in dollars, because the bank had offered better terms on a dollar-denominated loan. She could not service a dollar mortgage with peso income. The structure was self-reinforcing: borrow in dollars, earn in dollars, price in dollars, exclude anyone who earns in pesos. The circle closes. The Dominican disappears from her own city.

Structural Read

The Numbers Behind the Displacement

The Dominican Republic received 11.6 million tourists in 2025, a record that the government of President Luis Abinader celebrated as proof that the country's economic model was working.^[1] In the same year, foreign direct investment reached $5.03 billion — another record — with 42 percent flowing into tourism and real estate.^[2] The economy grew at approximately 5 percent. Inflation remained manageable by regional standards. The peso held relatively stable against the dollar. By every macroeconomic indicator, the Dominican Republic was the Caribbean's success story.

But macroeconomic indicators do not live in apartments. People do. And the people who live in Santo Domingo are experiencing a housing market that has structurally decoupled from their wages.

The average monthly wage in the Dominican Republic is approximately $300. In Santo Domingo, where wages are higher than the national average, the median sits closer to $400-500 for formal-sector workers — but roughly half the labor force operates in the informal economy, where earnings are lower and unpredictable.^[3] Against this income base, the rental market has moved decisively upward. Rents in Santo Domingo rose between 10 and 25 percent in 2024-2025, depending on the neighborhood.^[4] In desirable zones — the Colonial Zone, Piantini, Naco, Evaristo Morales, Serralles — the increases have been steeper. In Piantini, a one-bedroom apartment that rented for 30,000 pesos ($500) in 2022 now lists for 45,000 to 55,000 pesos ($750 to $920). In the Colonial Zone, many listings have abandoned peso denomination entirely and quote exclusively in US dollars.

This is the first structural marker: the dollarization of residential real estate in a peso-denominated economy. When apartment listings shift from pesos to dollars, they are no longer priced for the local market. They are priced for the international market — for the digital nomad arriving from Brooklyn, for the retiree from Miami, for the Airbnb operator running a portfolio. The Dominican worker earning 18,000 pesos a month is not the intended customer. She is the externality.

The Airbnb dimension is where the signal sharpens. Between 2023 and 2025, Airbnb listings in the Dominican Republic grew by approximately 31 percent.^[5] The country has zero national regulations on short-term rentals. No registration requirements. No density caps. No percentage limits on building conversions. No taxation framework specific to short-term rental income. No tenant protection against landlord conversion from long-term to short-term rental. The regulatory environment is not merely permissive — it is absent. The Dominican Republic is one of the last major tourism destinations in the Western Hemisphere with no Airbnb governance framework whatsoever.

For comparison: Mexico City implemented short-term rental registration requirements and taxation after residents in neighborhoods like Roma, Condesa, and Juárez organized against displacement. Barcelona capped total Airbnb listings and began phasing out tourist apartment licenses entirely by 2028. Lisbon imposed registration, taxation, and density limits after entire neighborhoods emptied of Portuguese residents. New York City's Local Law 18, effective September 2023, effectively banned most Airbnb listings by requiring hosts to be present during stays and to register with the city. In every one of these cities, regulation came after the displacement was visible, documented, and politically untenable.

The Dominican Republic is in the pre-regulatory window. The displacement is underway. The documentation is sparse. The political response is silence — or worse, celebration, because every converted apartment is a new line item in the tourism revenue statistics.

The national housing deficit compounds the pressure. The Dominican Republic has a housing deficit of approximately 1.4 million units, representing 39.3 percent of all households.^[6] Nearly half the population — 48.9 percent — does not own their home. Mortgage interest rates hover around 13 percent, making homeownership structurally inaccessible for most formal-sector workers, let alone informal-sector earners.^[7] The 2025 rent cap law, which limits annual rent increases to 10 percent, exists on paper but has weak enforcement mechanisms — landlords routinely circumvent it by declining to renew leases and relisting at market rates, or by converting to short-term rental entirely, which falls outside the law's scope.^[8]

Into this deficit — 1.4 million units short, nearly half the country renting, mortgage rates at 13 percent — the tourism economy is injecting a demand signal that competes directly with residential housing. Every apartment that converts from long-term rental to Airbnb removes a unit from the residential supply. Every building that sells to a foreign investor listing in dollars removes a building from the peso-denominated market. Every neighborhood that gentrifies into a tourist district displaces the residents who made it a neighborhood in the first place.

The Zona Colonial is the most visible case. Property values in the Colonial Zone appreciated 15 to 25 percent between 2023 and 2025, driven primarily by foreign buyers and tourism-oriented development.^[9] UNESCO World Heritage designation, which was intended to protect the neighborhood's historical character, has functioned instead as a marketing asset for luxury real estate developers. Restored colonial buildings that once housed Dominican families now house boutique hotels, co-working spaces, and vacation rentals. The restoration is beautiful. The displacement is total.

But the Colonial Zone is not the whole story. The pattern is replicating across Santo Domingo's emerging neighborhoods. Gazcue — a historically middle-class residential district adjacent to the Malecón — is experiencing rapid conversion as developers recognize its proximity to the waterfront and the Colonial Zone. Villa Francisca, one of the city's oldest working-class neighborhoods, is being marketed to foreign investors as "the next Gazcue." The gentrification pipeline has stages, and each neighborhood enters the pipeline when a critical mass of dollar-denominated transactions signals to the market that the conversion has begun.

Pattern Confirmation

The Mexico City Mirror

Dominican media has already drawn the parallel. In early 2026, several Dominican outlets published analysis comparing Santo Domingo's trajectory to Mexico City's — the same currency arbitrage, the same Airbnb proliferation, the same displacement of local residents from historically affordable neighborhoods.^[10] The comparison is structurally precise, but the Dominican case is worse in three measurable dimensions.

First, the income gap is larger. Mexico City's average formal-sector wage is approximately $600-800 per month. Santo Domingo's is $300-500. The ratio between local income and tourist-economy pricing is more extreme in the Dominican case, meaning the displacement threshold is lower — it takes less tourism pressure to make a neighborhood unaffordable.

Second, the regulatory response is further behind. Mexico City, despite its limitations, has implemented some short-term rental taxation and registration. The Dominican Republic has implemented nothing. The regulatory gap means that the market operates without friction — conversion from residential to tourist use faces no legal barriers, no administrative costs, no cooling-off periods.

Third, the housing deficit is proportionally larger. Mexico's national housing deficit is significant but represents a smaller percentage of total households than the Dominican Republic's 39.3 percent. When the baseline shortage is this severe, every unit removed from the residential market has amplified impact. The system has no slack. Every conversion is felt.

The pattern extends beyond Mexico City. The Dominican trajectory maps closely onto what happened in Lisbon between 2015 and 2020, when Portugal's Golden Visa program combined with Airbnb proliferation to displace working-class residents from neighborhoods like Alfama, Mouraria, and Graça. Lisbon's population inside the historic center declined by over 25 percent during that period. The Portuguese government eventually responded with regulation — but only after the displacement was largely complete. The same sequence played out in Barcelona's Barceloneta neighborhood, in Berlin's Kreuzberg, in New Orleans' Tremé and Bywater. The template is consistent: tourism economy enters, currency arbitrage activates, short-term rental platforms accelerate conversion, residents are displaced, regulation arrives too late.

What makes the Dominican case distinct is the combination of scale and absence. The scale: 11.6 million tourists in a country of 11.2 million people. The tourist-to-resident ratio has crossed parity. For every Dominican citizen, there is more than one tourist per year. The absence: zero regulatory framework. No registration. No caps. No taxation. No enforcement. The market is operating in a regulatory vacuum, and the vacuum is not accidental — it is policy. The Abinader administration has explicitly positioned tourism as the engine of national development, and any regulation that might slow the engine is politically unthinkable.

The FDI composition tells the story. Of the $5.03 billion in foreign direct investment that entered the Dominican Republic in 2025, 42 percent went to tourism and real estate.^[2] This is not diversified investment. This is a bet on a single sector — and that bet is being placed on the physical space where Dominicans live. The foreign capital is not building factories in free-trade zones. It is buying apartments in Santo Domingo and condos in Punta Cana. The investment is literally purchasing the residential supply and repurposing it for non-residential use.

The construction boom reinforces the illusion of supply response. Santo Domingo is building aggressively — cranes are visible across the skyline, and new condominium towers are rising in Piantini, Naco, and along the Malecón. But the new construction is almost exclusively luxury-tier, priced in dollars, marketed to foreign buyers and diaspora investors. A new two-bedroom apartment in a Piantini tower lists for $180,000 to $350,000. At a 13 percent mortgage rate, the monthly payment on a $200,000 unit is approximately $2,200 — more than seven times the average monthly wage. The construction boom is not building housing for Dominicans. It is building investment vehicles for the international market that happen to be shaped like apartments.

The diaspora dimension adds a layer that most gentrification analyses miss. The Dominican diaspora — concentrated in New York, New Jersey, Massachusetts, and Florida — earns in dollars and sends remittances that totaled $10.2 billion in 2025, representing nearly 9 percent of GDP.^[11] A segment of the diaspora is also purchasing real estate in Santo Domingo, either as retirement investments or as rental income properties. These buyers are Dominican by origin but operate economically like foreign investors: they earn in dollars, they price in dollars, they compete with local residents who earn in pesos. The gentrification is partially internal — Dominicans displacing Dominicans across a currency divide.

The geography of displacement follows predictable corridors. The most affected areas form a ring around the Colonial Zone, extending north through Gazcue and Ciudad Nueva, east through Villa Francisca and San Carlos, and west along the Malecón toward the George Washington strip of hotels and casinos. Working-class and lower-middle-class residents in these neighborhoods are experiencing the classic gentrification squeeze: rising rents, landlord non-renewal, building sales to developers, and the gradual replacement of local commercial infrastructure (colmados, talleres, salones de belleza) with tourist-oriented businesses (boutique hotels, rooftop bars, co-working spaces, artisanal coffee shops).

Where do the displaced go? The data is thin, but the pattern in comparable cities suggests peri-urban expansion — residents pushed to peripheral neighborhoods with longer commutes, fewer services, and less infrastructure. In Santo Domingo, this means displacement toward Los Alcarrizos, Santo Domingo Norte, Pedro Brand, and other municipalities in the greater metropolitan area where rents remain affordable but where access to employment, healthcare, and education deteriorates. The displacement is not just economic. It is geographic, and it carries cascading costs in commute time, transportation expense, and quality of life that do not appear in any tourism revenue statistic.

What Is Not Known

The exact number of apartments that have been converted from long-term residential rental to short-term tourist rental in Santo Domingo. No Dominican government agency tracks this conversion. No academic institution has conducted a systematic survey. The 31 percent Airbnb growth figure captures listing volume but not the residential units removed from the long-term market to create those listings. The displacement is happening, but it is happening in a data vacuum — which means it is also happening in a political vacuum, because policy responses require documentation, and the documentation does not exist.

The actual enforcement rate of the 2025 rent cap law. The law limits annual increases to 10 percent, but no enforcement data has been published. Tenant advocacy organizations in Santo Domingo report that landlords routinely exceed the cap, either through direct violation or through structural workarounds (non-renewal, short-term conversion, informal agreements outside the lease). Without enforcement data, the law functions as a political statement rather than a tenant protection mechanism.

The proportion of new construction that is sold to foreign buyers versus domestic buyers. Developers in Piantini and Naco market primarily in English and price in dollars, which suggests a predominantly foreign or diaspora buyer base, but no systematic data on buyer nationality or residency status is collected at the point of sale.

What would change the signal: If the Abinader administration or the incoming government of 2028 introduced Airbnb regulation — registration, taxation, density caps, or conversion restrictions — the signal would shift from "unregulated displacement" to "contested governance." If the rent cap law received meaningful enforcement resources, the signal would shift from "paper protection" to "active intervention." If Dominican media sustained coverage of the displacement pattern (rather than treating it as a one-off think piece), the signal would shift from "latent crisis" to "political issue." None of these shifts have occurred as of June 2026.

What would downgrade the signal: If new construction genuinely expanded affordable housing supply at a rate sufficient to offset the short-term rental conversion — but current construction is luxury-tier and does not address the affordable segment. If tourism revenue generated wage increases proportional to rent increases — but tourism employment in the Dominican Republic is concentrated in low-wage service positions that do not track with real estate appreciation. If the peso strengthened significantly against the dollar, narrowing the currency arbitrage — but monetary policy objectives and remittance dynamics make sustained peso appreciation unlikely.

Monitoring indicators: Track Airbnb listing volume in Santo Domingo quarterly. Track peso-to-dollar rental listing ratios in the Colonial Zone, Piantini, Naco, and Gazcue. Monitor rent cap enforcement actions (if any are reported). Track construction permits by price tier. Monitor Dominican media coverage frequency of housing affordability. Watch for any legislative or regulatory proposals addressing short-term rental governance. Track displacement indicators in peri-urban municipalities (population growth, school enrollment, informal settlement expansion).