Gentrification in Costa Rica is rapidly transforming many coastal and rural communities into luxury destinations. While this phenomenon can bring economic development and foreign investment, it also generates profound negative consequences: displacement of local populations, loss of cultural identity, and environmental damage .
In this article, we explore how this process is affecting regions like Santa Teresa, Nosara, and the Southern Caribbean, and share sustainable proposals that seek a balance between development and social justice.
What is gentrification?
Gentrification is an urban process in which wealthier people move into neighborhoods traditionally inhabited by lower-income communities. This transformation is often accompanied by housing renovations, new business openings , and a significant increase in property values.
Although it may seem positive economically, gentrification has troubling consequences. Original residents are often displaced because they can no longer afford the new rents, services, or prices. Furthermore, this process alters the cultural identity of the neighborhood, replacing traditions and ways of life with a more homogeneous aesthetic geared toward tourism or foreign consumption.
At its core, gentrification is an ambivalent phenomenon: it can revitalize certain areas, but it also generates social exclusion, inequality, and the loss of community roots .
The phenomenon of gentrification in Costa Rica
Gentrification in Costa Rica has taken hold in areas that until recently were considered remote, rural, or underdeveloped. Towns like Santa Teresa, Nosara, Playa Penca, and San Juanillo have seen an accelerated surge in luxury real estate projects and a massive influx of expats , leading to a sharp increase in the cost of living.
In San Juanillo (Guanacaste) , for example, the construction of a mega residential project resulted in the destruction of an indigenous cemetery dating back more than 800 years BC , demonstrating a lack of respect for local cultural heritage.
This type of development not only displaces local communities , but also disrupts the social and cultural fabric that has defined the identity of these regions for generations.
In just 21 years, more than 50% of the Penca Beach Rock was destroyed.
Santa Teresa: An emblematic case of gentrification
Santa Teresa , a former fishing village on the Nicoya Peninsula, has been radically transformed over the past two decades. From a quiet, authentic town, it has become a luxury destination for surfers, investors, and international tourists .
This change has led to an unsustainable increase in the prices of housing, food, and basic services . As a result, many of the original inhabitants have been displaced to outlying areas or are forced to live in precarious conditions in order to remain close to their communities.
Saint Teresa no longer reflects the lifestyle and traditions that once defined her.
Negative effects of gentrification
Displacement of local communities
One of the most visible impacts of gentrification in Costa Rica is the forced displacement of local communities . The sustained increase in housing costs , coupled with a lack of clear regulations , has meant that many families can no longer afford to live in their own homes.
This displacement not only affects people's economic stability but also uproots entire communities , severing family ties, support networks, and local traditions. The result is a fragmentation of the social fabric that has sustained the identity of these regions for generations.
Satellite images of Playa Avellanas in 2004 and 2025, showing deforestation and tourism development as effects of gentrification in Costa Rica.
Loss of cultural identity
The massive influx of foreigners and the expansion of luxury real estate projects have profoundly changed the cultural identity of many coastal areas in Costa Rica. What were once communities with unique traditions and strong local roots are now facing an accelerated transformation driven by high-net-worth tourism. A clear example of this is the planned mega-project in Playa Panamá.
Businesses, fairs, services, and public spaces that once served the needs of the community now cater to the tastes of visitors and new residents. This reconfiguration has led to a loss of authenticity , turning unique towns into generic versions of other globalized tourist destinations.
Not only is a local aesthetic lost, but also a way of life that has been woven for generations.
Environmental impact
Costa Rica is world-renowned for its biodiversity , but gentrification threatens to undermine the very value that attracts tourism. The rapid development of luxury villas, hotels, and businesses in previously pristine areas is causing a series of worrying environmental impacts:
- Massive deforestation to make way for real estate projects
- Contamination of water sources due to lack of control in construction
- Loss of biodiversity and fragmentation of natural habitats
- Saturation of public services , especially in waste collection
An alarming example occurs in the Southern Caribbean , specifically in Playa Negra, Puerto Viejo , where the UCR Socio-Environmental Kiosks Program and environmental advocate Philippe Vangoidsenhoven have denounced forest clearing aimed at forcing land-use changes and facilitating urban development projects. This practice endangers not only local ecosystems but also the area's social balance. You can read the full article. here
Growth cannot be sustainable if it destroys the environment that makes it possible.
Santa Teresa, Nosara, Manzanillo de Talamanca: The next Tulums?
In 2016 , a New York Times article compared Santa Teresa to Tulum, Mexico , describing it as “the next Tulum.” Both destinations began as quiet towns with a strong local identity and transformed into luxury havens , accessible only to tourists and high-net-worth investors.
Today, Tulum faces serious problems : a housing shortage for residents, overexploitation of natural resources, and a growing disconnect between the local community and the tourism industry. Santa Teresa, along with Nosara and Manzanillo in Talamanca , appears to be following the same path .
The question is no longer whether Costa Rica will have its Tulum , but how many more towns will lose their essence in the name of uncontrolled development .
Sustainable solutions to mitigate gentrification
Although the negative effects of gentrification in Costa Rica are evident, we still have time to redirect the course . Here are some proposals that can contribute to more equitable, sustainable, and balanced development:
Regulate the real estate market
It is urgent to establish clear and effective regulations to protect local communities from speculation. This includes:
- Limit the uncontrolled construction of luxury properties
- Promote affordable housing projects for local families
- Require social and environmental impact studies before approving tourism developments
Investing in infrastructure that serves everyone
Infrastructure investment should not only serve tourism. It should:
- Improve waste management , access to water and public transport
- Ensure basic services for current residents
- Prioritize regenerative tourism that generates income without damaging local identity.
Defend and make local culture visible
Preserving cultural identity is key to authentic development. How?
- Supporting family businesses, fairs, markets, and artisanal ventures
- Promoting cultural practices in public spaces
- Integrating local history and voices into tourism narratives
Educate to transform
There is no sustainability without collective consciousness. It is essential:
- Educate tourists, investors, and new residents about the impact of their actions
- Promote respect for territories and their communities
- Promote local campaigns that inspire pride, belonging, and environmental responsibility
Between Luxury and Identity: What Future Do We Choose?
Gentrification in Costa Rica , especially in areas such as Santa Teresa, Nosara and the South Caribbean , poses urgent challenges for local communities, the environment and the cultural identity of these regions.
However, with a clear vision, sustainable practices , and strong regulations , it is possible to mitigate these impacts and build a development model that benefits both residents and visitors.
Costa Rica's future cannot depend solely on luxury or foreign investment. It requires a real commitment from authorities, investors, tourists, and local communities to ensure that the country's natural beauty and cultural richness remain accessible, authentic, and protected .
The decision is collective: gentrify or regenerate.
