Informacion economica sobre Cuba

Cuba's Housing Market in People Terms
June 9, 2011
Fernando Ravsberg

HAVANA TIMES, June 9 – Very soon Cubans will be authorized to buy and
sell housing, which is an old aspiration of people. In fact, this was
among the five most repeated demands raised by islanders during the
national discussion held back in 2007.

The reform guidelines approved in the Party Congress (April 2011) don't
explain — nor are they required to — how that transformation will move
forward, therefore some voices now fear the social and economic
consequences that might arise.

Learning from Spain and the USA

I read some concerns of Cubans who have emigrated and I find them
logical, keeping in mind the fact that those who reside in the United
States as well as in Spain know full well what a mistaken real estate
policy can mean.

Cuban socialism has the possibility of drawing from the experiences of
those countries that transformed housing into a commodity for
speculation, causing prices to skyrocket and making bank loans un-payable.

In Spain there are millions of empty apartments, constructed only
because "housing is a sure investment that always appreciates." At the
same time, millions of younger people are reaching their 30s still
living with their parents due to the lack of affordable housing.

The real estate bubble finally exploded resulting in large numbers of
American and Spanish families losing their homes and the equity they had
paid the banks through their mortgages. Those same banks came out on
top – like casinos, they never lose.

The opening of Cuba should keep in mind those experiences so they don't
commit the same errors. After 50 years of real estate immobility, one
runs the risk that the craftiest individuals will devote themselves to
speculation and prices will shoot.

The other danger is the end of socially mixed communities that have
existed up to now. The threat is that separate neighborhoods for the
rich, the middle class and the poor will form, as occurred previously in
Cuba and continues to happen in many countries of the world.

However, there doesn't seem to be an option. The current situation is
untenable. The crisis is such that almost half the housing is in
standard or sub-standard physical condition while the last government
programs for new construction ended in total failure.

Micro-Brigades and Diplomat Masons

For decades the bulk of the work was in the hands of "micro-brigades"
composed of people in need of housing; they would take leaves from their
regular jobs for years and work as impromptu builders.

This program was carried out in almost all sectors; even personnel of
the Foreign Ministry would take sabbaticals to devote themselves to
building for a number of years, with many diplomats working for some
time as assistant bricklayers.

I don't have data to assess the ideological results of the plan, but in
terms of construction those "micro apartments" turned out being far from
excellent, which is logical (at the Institute of International Relations
they don't train the attachés to erect walls).

It's true that when one of these efforts begins in a neighborhood, the
surrounding residents become ecstatic because they'll be able to repair
their houses by buying materials on the side. All they have to do is
reach an agreement with the contractors to resolver ("solve") everything
that's necessary.

The theft and misappropriation of supplies in the construction industry
is so common that a Cuban comedian claimed: "We were going to construct
socialism, but the materials were stolen." In this way the black market
has become the principal supplier for repairing and enlarging homes.

For the poorest families it has been almost impossible for them to
improve their housing. Materials are sold at subsidized prices, which
turned out to be a great sin because it allowed for these to be
monopolized and resold for higher prices to those who could pay.

To make things worse, though Cubans were provided with housing, they
weren't allowed to sell or exchange their units for smaller ones and
cash back. Nonetheless, many people did this despite running the risk
that the government would confiscate their properties.

Growth Is Visible

The recent relaxation of the regulatory scheme produced an immediate
change in the urban landscape. People are fixing up the houses,
enlarging them and even building new ones. The construction sector is
beginning to grow rapidly.

Private factories producing bricks and blocks are being set up,
self-employed workers are making sand reappear ever since the gates to
the quarries were re-opened, and brigades of bricklayers, carpenters and
plumbers are working endlessly.

The currently more flexible structure will allow some people to sell
their large houses that they're unable to maintain and buy other ones
more in line with their needs, while those who possess money will be
able to spend it legally on housing.

But if one wants this new measure to facilitate Cubans access to a roof,
and not the opposite, it will be necessary to establish a regulatory
scheme that regulates that activity, thinking of how to prevent
speculation and artificial price increases.

Housing is a civil right that shouldn't be considered simple
merchandise. If it's an economic absurdity to seek to eliminate the
real estate market, to leave it free and without controls would be a
social absurdity.

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