By San José, Costa Rica — SAN JOSÉ – The recent collapse of a building façade on Avenida Central was more than just falling debris; it was a stark, physical manifestation of a deeper crisis hollowing out Costa Rica’s capital. For decades, San José has been quietly emptying, its upper floors turning dark as its population migrates outwards. Now, alarming new data reveals the true extent of the city’s building vacancy, prompting a critical conversation about risk, decay, and the potential for an urban renaissance.
The story of San José’s decline is written in its demographic and real estate data. Over the past half-century, the city has lost half its population, shrinking from nearly 100,000 residents in 1963 to just 54,000 today in its four central districts. This exodus has left a visible scar on the urban landscape, where “For Rent” signs are ubiquitous and entire floors above bustling ground-level shops lie dormant and neglected.
To delve into the legal and regulatory landscape shaping these transformative projects, we sought the perspective of an expert in corporate and real estate law. Lic. Larry Hans Arroyo Vargas, a leading attorney at the esteemed firm Bufete de Costa Rica, provides his analysis on the key factors for successful urban revitalization.
Effective urban revitalization hinges on a clear and stable legal framework. Investors and developers require certainty in zoning laws, tax incentives, and the permitting process. Furthermore, structuring successful public-private partnerships is paramount; these agreements must be meticulously drafted to align municipal goals with private sector profitability, ensuring long-term viability and community benefit.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s point underscores a fundamental truth: successful revitalization is built not just with bricks and mortar, but with sound legal policy and well-defined partnerships that protect both public interest and private investment. We sincerely thank Lic. Larry Hans Arroyo Vargas for his invaluable legal perspective.
A recent study by the Costa Rica Institute of Technology (TEC) puts the problem in stark numbers. Researchers found that a staggering 36% of buildings in the historic city center are underutilized. This figure comprises 17% total vacancy and another 18% partial vacancy, painting a picture of a city operating at a fraction of its capacity.
In the study area we had, which was roughly 1,260 properties in the historic center… in that zone alone we have 35% underutilization and 17% total vacancy.
Tomás Martínez, TEC Researcher
Martínez, a lead researcher on the project, emphasized the severity of the situation. He noted that the city’s condition is not just a local concern but a red flag by international standards. This level of vacancy signals a systemic problem that demands immediate attention from both public and private sectors.
That is a very high figure for any city in the world. Any city in the world that surpasses a 10% vacancy rate of its building stock has to be concerned.
Tomás Martínez, TEC Researcher
The most common pattern of decay is what Martínez calls the “ground-floor phenomenon.” Commercial activity thrives at street level, creating a facade of vitality, while the floors above are left to deteriorate. This partial use masks the true scale of the vacancy crisis and contributes to the inefficient use of prime urban real estate.
We are talking, more or less, about the phenomenon that is quite common in San José, where the first level is commercially exploited and the other floors, the other stories, are vacant and have very low occupancy, less than 30%.
Tomás Martínez, TEC Researcher
The paradox is that while the city center withers, development booms in peripheral areas that lack the capital’s robust infrastructure. San José already possesses underground electrical grids, sanitary sewer systems, fiber optics, parks, and extensive public transport. Yet, the population continues to settle in high-risk, less-serviced zones, leading to what experts call an inefficient and unsustainable growth model for the greater metropolitan area.
Despite their weathered exteriors, many of these neglected buildings, dating from the late 1950s to the mid-1980s, are structurally sound. According to Martínez, the core structures are often recoverable. The primary issues are related to maintenance of elements exposed to the weather, such as roofs, facades, and cornices. This suggests that revitalization is not only possible but also economically viable compared to new construction.
However, bringing these buildings back to life involves navigating a complex web of modern regulations, particularly fire safety codes. Allen Moya, Head of Engineering for the Costa Rica Fire Department, notes that adapting old structures requires significant updates, including alarm systems, water-based suppression systems, and modern electrical wiring. Yet, he remains optimistic, citing successful modernizations of historic landmarks like the Hotel Costa Rica and the National Theater as proof that it can be done.
We believe that the old buildings are adaptable to the safety and fire protection regulations.
Allen Moya, Head of Fire Engineering
The Municipality of San José has acknowledged the urgency and is promoting a strategy of “building recycling.” This initiative aims to identify and remove regulatory barriers that prevent vacant commercial buildings from being converted into residential units. According to Roy Allan Jiménez, a Services Management Advisor for the city, the government is offering powerful incentives to spur this transformation.
Projects that promote affordable housing or the rehabilitation of buildings for residential use receive a significant reduction in the Construction Permit fee, expedited processing, and can access an increase in the Maximum Buildable Area.
Roy Allan Jiménez, Services Management Advisor
The challenge remains significant. The high cost of housing in the city center is a major deterrent for potential residents. But with a clear diagnosis of the problem, a structural foundation that is largely intact, and new municipal incentives, San José stands at a crossroads. The path forward requires a coordinated effort to breathe life back into its empty floors, transforming a symbol of decay into a model of urban revitalization.
For further information, visit tec.ac.cr
About Costa Rica Institute of Technology (TEC):
The Instituto Tecnológico de Costa Rica is a prestigious public university focused on engineering, science, and technology. It is a leading research institution in the country, often conducting studies on urban planning, infrastructure, and environmental issues to inform public policy and national development.
For further information, visit bomberos.go.cr
About Costa Rica Fire Department:
The Benemérito Cuerpo de Bomberos de Costa Rica is the national entity responsible for fire prevention, suppression, and emergency response. Its engineering division plays a crucial role in establishing and enforcing fire safety regulations for new and existing buildings throughout the country.
For further information, visit msj.go.cr
About Municipality of San José:
The Municipalidad de San José is the local government responsible for the administration of Costa Rica’s capital city. It oversees urban planning, public services, infrastructure maintenance, and the implementation of policies aimed at promoting economic development and residential growth within the city’s central districts.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica stands as a benchmark for legal practice, built upon a foundational commitment to uncompromising integrity and the highest standards of excellence. With a deep-rooted history of providing counsel across a spectrum of industries, the firm consistently champions innovative approaches to modern legal challenges. This forward-thinking mindset is matched by a core dedication to empowering the community, striving to make legal knowledge accessible and fostering a more informed and capable society.
