Cuban homes up for sale as housing law in effect

Posted on Thursday, 11.10.11

Cuban homes up for sale as housing law in effect
By ANDREA RODRIGUEZ
Associated Press

HAVANA -- For sale: 5BR 4BA tropical delight along Havana's exclusive
embassy row, just steps from the balmy waters of the Florida Straits.
Asking price $200,000. Foreigners need not apply.

This is the face of a brand-new real estate market that became official
in Cuba on Thursday, as a new measure legalized home sales for the first
time in generations, applying a jolt of free-market wheeling and dealing
to one of the socialist country's most dire problems: a grave shortage
of housing.

"I think this law is divine," said Tania Duran, who's offering the home
in western Havana. "What I find strange is that it hasn't happened
before, because it's only logical that if you have property and want to
sell it, you can."

Listings on a Craigslist-style website have mushroomed since the law was
announced last week, with prices ranging from the tens of thousands into
the hundreds of thousands of dollars, even a cool $1 million for an
oceanside villa in the resort town of Varadero.

The law is the highest-profile economic reform yet undertaken by
President Raul Castro, who has spearheaded a year of economic changes
that has let Cubans go into business for themselves in unprecedented
numbers, to legally rent out rooms and automobiles and even to buy and
sell used cars.

But the housing bill is the one most likely to affect the lives of
millions of Cubans. Residents of the capital began lining up at
government offices early to seek information and process paperwork for
property deeds, and their numbers increased throughout the day.

"This is great!" said Havana resident Maribel Diaz, who at 47 years old
had never known a time when she might have legally sold her home. "We've
really needed it for a long time."

Until now, islanders have turned to black-market transactions with many
thousands of dollars changing hands under the table. Now they can sell
real estate openly, bequeath property to relatives without restriction
and avoid forfeiting their homes if they abandon the country.

Cuba's housing crunch is acute. Many extended families are crammed into
aging, decrepit houses and apartments that have been subdivided again
and again to shelter more and more people. The government acknowledges a
shortfall of around 500,000 homes, and some experts say it lacks as many
as 1.6 million units of adequate housing.

The new law should make it easier for young couples to find their own
space, and for seniors to downsize their empty nests and pocket money to
fund their retirement.

Because of the new law, "I have a relative who's leaving the country and
now I can take over the house," said Ricardo Montero Bravo, 40, one of
dozens of residents seeking more information and help in putting
property titles in order.

Economists caution not to expect too much, too soon. Much of the money
for purchases is expected to come from exiles helping relatives back
home, but some may be wary of investing while one of the Castros are in
office. The exile community has also been hard hit by the economic
recession, and may not have that much disposable income.

"Maybe the expectations are a little overblown to the extent that the
situation in South Florida, where most Cuban immigrants are, is not that
great right now," said Sergio Diaz-Briquets, a U.S.-based demography
expert who has written about housing in Cuba.

But Omar Everleny Perez, the lead economist at Havana University's
Center for Cuban Economic Studies, said in a recent interview that some
Cubans do have the money: Bank accounts are concentrated among 13
percent of islanders who control 90 percent of the deposits, he said,
and some are worth $160,000 to $200,000.

The new law requires that Cubans prove the legitimacy of their funds,
and does not establish the right of foreigners to purchase property.
There also is no mechanism for lending or mortgages, meaning the price
must be paid in cash.

But many Cubans do have high hopes, evidenced by a flurry of activity on
Revolico.com, a Craigslist-style classified ad website that since 2007
has been a clearinghouse for real estate transactions involving
thousands of dollars changing hands, something that was illegal, until now.

Many listings are relatively modest: $11,000 for a two-bedroom,
one-bathroom apartment in Havana's Nuevo Vedado district, or $15,000 for
a three-bedroom house in historic Old Havana advertised as "needing
profound repairs."

But some homes in the upscale western neighborhoods of the capital run
into the hundreds of thousands. And then there's the Varadero villa,
just steps from the sea, pictured as a whitewashed, red-tile roof
mansion on a walled property with palm trees and a second-story balcony.

Its $1 million price tag is particularly eye-popping in a country where
government salaries average about $20 per month, and a number of
Revolico users doubted its legitimacy, writing in postings on the
website that nobody could have come by that kind of money legitimately.
There was no phone number given for the owner, and a message sent to the
listed email address bounced back.

But in Havana's embassy district, Duran, 34, is confident that she'll
find someone with a wallet thick enough to pay $200,000 for her
five-bedroom, two-story home, which her family spent years remodeling.

Built in 1955 a few blocks from the sea, its exclusive neighborhood is
home to numerous stately mansions that belonged to the elite before
Fidel Castro's revolution and today are mostly in government hands or
occupied by foreign diplomats. Duran's is an uncommonly
well-accommodated house with gray-granite floors, wood-panel walls and
stained glass interior details.

"There are people who have that kind of money and will be able to pay,"
Duran said. "Nobody has set down official prices anywhere. I believe my
home is worth what I'm asking."

Associated Press writer Peter Orsi in Havana contributed to this report.

http://www.miamiherald.com/2011/11/10/v-fullstory/2496125/cuban-homes-up-for-sale-as-housing.html