Reforms to allow home ownership
TUESDAY, 26 JULY 2011 03:00
Cuba to ease prior restrictions
BY PETER ORSI
The Associated Press
HAVANA – Each morning before the sun rises too high, Cubans gather at a shaded corner in central Havana, mingling as though at a cocktail party. icebreaker is always the same: “What are you offering?”
This is Cuba’s informal real-estate bazaar, where a chronic housing shortage brings everyone from newlyweds to retirees together to strike deals that often involve thousands of dollars in under-the-table payments. They’re breaking not just the law but communist doctrine by trading and profiting in property, and now their government is about to get in on the action.
President Raul Castro has pledged to legalize the purchase and sale of homes by the end of the year, bringing this informal market out of the shadows as part of an economic reform package under which Cuba is already letting islanders go into business for themselves in 178 designated activities, as restaurateurs, wedding planners, plumbers, carpenters.
An aboveboard housing market promises multiple benefits for the cash-strapped island: It would help ease a housing crunch, stimulate construction employment and generate badly needed tax revenue. It would attack corruption by officials who accept bribes to sign off on illicit deals, and give people options to seek peaceful resolutions to black-market disputes that occasionally erupt into violence.
It’s also likely to suck up more hard currency from Cubans abroad who can be counted on to send their families cash to buy, expand and remodel homes, especially since U.S. President Barack Obama relaxed the 50-year-old economic embargo to allow unlimited remittances by Cuban-Americans.
“All these things are tied in,” said Sergio Diaz-Briquets, a U.S.-based demography expert. “They want expatriate Cubans to contribute money to the Cuban state, and this is one big incentive for people who want to help their families.”
But few changes are likely to be as complex and hard to implement as real estate reform.
From the earliest days of the revolution, Fidel Castro railed against exploitative, absentee landlords, and enacted a reform that gave property ownership to whomever lived in a home, regardless of who held title. Most who have left the island forfeited their properties to the state. The government, Castro preached, would provide everything a citizen could need: employment, food, education and housing, all for little or no money at all.
But the housing stock, already run down before the revolution, continued to deteriorate, the U.S. embargo choked off the supply of building materials, and new construction failed to keep pace with demand.
Meanwhile cyclones and salty air can start eating through metal bars in a year and have decimated rural shanties and older quarters of Havana. Empty lots dot the capital’s seaside Malecon boulevard as once-stately mansions regularly collapse following heavy rains. Many of those still standing are merely facades or are propped up by scaffolding and wooden beams.
While they wait for the new law to be enacted and the specifics to be announced, Cubans’ legal options are few. They can enroll in cooperative construction projects, build on existing properties or join the long waiting list for government housing. Or they can head to the open-air real-estate market in hopes of negotiating a “permuta,” which officially is a swap of equal-value properties but in reality usually involves illegal cash on the side.
Many enlist the services of “runners” like Manuel Valdez, an 83-year-old ex-military man who has been brokering the transactions for four decades. At the downtown bazaar, Valdez holds court on a concrete bench, keeping track of real estate offers in a tattered notebook and on posterboard that he tapes to a tree.
Gesturing at the people milling around hoping to strike a deal, Valdez said housing is such a problem that legalization was inevitable: “This is a situation that the state had to get off its back one way or another.”
There’s also www.revolico.com, a kind of Cuban Craigslist that has real estate ads asking tens of thousands of dollars. Site operators claim the real estate section alone gets 30,000 unique visits a month even though islanders must find a way around the web censors.
Some Cubans enter into sham marriages to make deed transfers easier. Others move into homes ostensibly to care for an elderly person living there; they register at the address and, after enough time passes, can legally claim the “inherited” title. Nowhere is there an official record of the money changing hands.
Cuba experts caution that the new measure is just a first step toward solving the housing crisis, and note that it deliberately stops short of creating a freewheeling, capitalist real estate market.
The Associated Press
HAVANA – Each morning before the sun rises too high, Cubans gather at a shaded corner in central Havana, mingling as though at a cocktail party. icebreaker is always the same: “What are you offering?”
This is Cuba’s informal real-estate bazaar, where a chronic housing shortage brings everyone from newlyweds to retirees together to strike deals that often involve thousands of dollars in under-the-table payments. They’re breaking not just the law but communist doctrine by trading and profiting in property, and now their government is about to get in on the action.
President Raul Castro has pledged to legalize the purchase and sale of homes by the end of the year, bringing this informal market out of the shadows as part of an economic reform package under which Cuba is already letting islanders go into business for themselves in 178 designated activities, as restaurateurs, wedding planners, plumbers, carpenters.
An aboveboard housing market promises multiple benefits for the cash-strapped island: It would help ease a housing crunch, stimulate construction employment and generate badly needed tax revenue. It would attack corruption by officials who accept bribes to sign off on illicit deals, and give people options to seek peaceful resolutions to black-market disputes that occasionally erupt into violence.
It’s also likely to suck up more hard currency from Cubans abroad who can be counted on to send their families cash to buy, expand and remodel homes, especially since U.S. President Barack Obama relaxed the 50-year-old economic embargo to allow unlimited remittances by Cuban-Americans.
“All these things are tied in,” said Sergio Diaz-Briquets, a U.S.-based demography expert. “They want expatriate Cubans to contribute money to the Cuban state, and this is one big incentive for people who want to help their families.”
But few changes are likely to be as complex and hard to implement as real estate reform.
From the earliest days of the revolution, Fidel Castro railed against exploitative, absentee landlords, and enacted a reform that gave property ownership to whomever lived in a home, regardless of who held title. Most who have left the island forfeited their properties to the state. The government, Castro preached, would provide everything a citizen could need: employment, food, education and housing, all for little or no money at all.
But the housing stock, already run down before the revolution, continued to deteriorate, the U.S. embargo choked off the supply of building materials, and new construction failed to keep pace with demand.
Meanwhile cyclones and salty air can start eating through metal bars in a year and have decimated rural shanties and older quarters of Havana. Empty lots dot the capital’s seaside Malecon boulevard as once-stately mansions regularly collapse following heavy rains. Many of those still standing are merely facades or are propped up by scaffolding and wooden beams.
While they wait for the new law to be enacted and the specifics to be announced, Cubans’ legal options are few. They can enroll in cooperative construction projects, build on existing properties or join the long waiting list for government housing. Or they can head to the open-air real-estate market in hopes of negotiating a “permuta,” which officially is a swap of equal-value properties but in reality usually involves illegal cash on the side.
Many enlist the services of “runners” like Manuel Valdez, an 83-year-old ex-military man who has been brokering the transactions for four decades. At the downtown bazaar, Valdez holds court on a concrete bench, keeping track of real estate offers in a tattered notebook and on posterboard that he tapes to a tree.
Gesturing at the people milling around hoping to strike a deal, Valdez said housing is such a problem that legalization was inevitable: “This is a situation that the state had to get off its back one way or another.”
There’s also www.revolico.com, a kind of Cuban Craigslist that has real estate ads asking tens of thousands of dollars. Site operators claim the real estate section alone gets 30,000 unique visits a month even though islanders must find a way around the web censors.
Some Cubans enter into sham marriages to make deed transfers easier. Others move into homes ostensibly to care for an elderly person living there; they register at the address and, after enough time passes, can legally claim the “inherited” title. Nowhere is there an official record of the money changing hands.
Cuba experts caution that the new measure is just a first step toward solving the housing crisis, and note that it deliberately stops short of creating a freewheeling, capitalist real estate market.
