WILLEMSTAD – Unrealistically high property valuations, combined with rising renovation costs and complicated ownership arrangements, may be preventing the redevelopment of deteriorating buildings in Curaçao, particularly in older urban neighborhoods.
The concern is raised by Johan van Megesen in an opinion article published on the website of Dutch Caribbean Economists, Economenclub.com, titled “De Curaçaose woningcrisis: kijk eerst naar onszelf.”
Van Megesen argues that the housing crisis is not simply a matter of insufficient construction or increasing foreign demand. In his assessment, some properties remain vacant because their officially assessed values do not reflect what buyers and developers can realistically afford.
The problem is particularly visible in neighborhoods such as Seru di Otrobanda and along Breedestraat, where restored historic buildings stand alongside abandoned properties and deteriorating traditional homes.
According to Van Megesen, a property may have a high valuation on paper even when its physical condition makes it extremely expensive to renovate or redevelop.
This creates a difficult situation for owners and potential investors.
Families who inherit older properties may base their asking prices on an appraisal that does not adequately account for the building's deterioration or the cost of restoring it.
Developers, meanwhile, must consider not only the purchase price but also demolition or renovation expenses, construction materials, financing, permits and the income that the completed project could generate.
When those costs exceed the property's realistic economic potential, redevelopment becomes financially unattractive.
Van Megesen notes that construction, renovation and financing costs have increased considerably in recent years. At the same time, rental income from certain commercial properties, particularly offices and retail spaces, may be insufficient to justify expensive restoration projects.
The result can be a cycle in which owners refuse to sell below the appraised value, buyers decline to pay the asking price and buildings continue to deteriorate.
As the condition of a property worsens, the cost of restoration may increase further, making eventual redevelopment even less likely.
Van Megesen argues that property valuations should reflect economic reality rather than preserve theoretical prices that prevent transactions from taking place.
For severely deteriorated buildings, he believes appraisals should give greater consideration to the actual costs of restoration, demolition, replacement construction and financing, as well as the likely income or sale value after redevelopment.
His criticism does not establish that all official property valuations are excessive. The article does not provide a comprehensive study comparing appraised values with completed property transactions. Instead, it identifies a concern that Van Megesen says is frequently raised by participants in the real estate market.
The issue also extends beyond private investment.
Vacant and deteriorating properties can undermine neighborhood revitalization, reduce the attractiveness of commercial streets and create additional problems for surrounding residents and businesses.
In historic parts of Willemstad, restoration can involve particularly complex financial decisions because older buildings may require specialized materials, skilled labor and compliance with preservation requirements.
These considerations can make projects significantly more expensive than conventional construction.
Van Megesen believes that addressing the valuation problem, alongside legal and administrative reforms, could help return more existing properties to productive use.
His analysis challenges the government and the real estate sector to examine whether current valuation practices are encouraging redevelopment or contributing to the continued abandonment of buildings.
For Curaçao, the implications extend beyond housing affordability. They also concern the preservation of historic neighborhoods, private investment, urban renewal and the long-term economic value of the island's existing property stock.