The Municipality of Santa Cruz is moving to impose order on one of Costa Rica’s fastest-growing property markets, preparing a coastal and urban zoning plan that will, for the first time, set out a formal legal framework for development across the area’s booming shoreline.
Municipal officials expect the plan to be completed during the first quarter of 2027. Once in force, it will regulate construction in coastal areas that have drawn heavy foreign investment in recent years, including Tamarindo, Playa Flamingo and Cabo Velas, where oceanfront demand and scenic mountain lots have fueled a sustained building surge.
That surge has reshaped the area. Hotels, luxury homes, condominiums and commercial projects have multiplied as developers compete for a shrinking supply of land, and in destinations such as Tamarindo, vacant parcels have grown increasingly scarce. Much of the expansion, the municipality acknowledges, has advanced without a governing plan, because no municipal regulation currently exists to direct where and how development takes place.
Mayor Jorge Arturo Alfaro said the growth, while economically valuable, has outpaced planning. “Growth is positive. Many people talk about gentrification, but there is significant economic development taking place in our canton,” Alfaro said. He added that such expansion must be paired with territorial planning that protects the canton’s natural resources, arguing that Santa Cruz cannot allow its entire land area to be consumed by construction while ignoring water-recharge zones and aquifers.
According to the mayor, the municipality has already completed the required public consultations and institutional procedures. The zoning document is now being drafted with the assistance of a specialized consulting firm and a team of municipal professionals assigned exclusively to the project. Alfaro described the plan as the most important initiative of his administration and said its scope will extend well beyond dictating where building is permitted.
Officials say the plan will establish measures to protect environmentally sensitive areas, including groundwater-recharge zones, aquifers, mangroves, parks and other ecosystems that have come under mounting pressure from development. It is also intended to confront broader planning challenges such as urban mobility, flood-prone areas and heat islands, while identifying which zones are suitable for future construction and which are not.
Santa Cruz has become one of Costa Rica’s leading areas for new building, rivaling some of the most urbanized areas in the volume of square meters under development. Much of the recent activity is residential, though a substantial share of the homes function as vacation properties rather than primary residences.
Once the document is finished, the municipality will open a public consultation process with residents, businesses, investors and other stakeholders before submitting it for final approval. Local authorities believe the resulting rules will help balance economic growth against environmental conservation while giving future development greater legal certainty in one of the country’s most sought-after coastal destinations.
