Cubans can sell homes now, but how and to whom?

Posted on Saturday, 11.19.11

Cubans can sell homes now, but how and to whom?

Impact of new law is hard to predict after so many years of illegal
house sales
By Juan O. Tamayo
jtamayo@ElNuevoHerald.com

Havana widow Olga Ramirez wants to sell her three-bedroom house now that
her son and daughter have moved out and — for the first time in half a
century — the government has legalized the sale of homes.

Yet she worries about the room added illegally eight years ago, and
where she could move to in a country with a housing shortage so huge
that young couples sometimes put off having babies for years.

"Yeah, I could sell, but then were do I go? To an attic someplace? No
way," Ramirez said. "And if they find the room? You know that the only
cement we can get here is stolen from the government, no?"

Clearly, the legalization of real estate sales is one of the most
significant reforms Raúl Castro has adopted in his drive to grow Cuba's
economy by slashing state spending and allowing more private enterprise.

Enacted Nov. 10, the reform brought back a legal housing market crushed
by Fidel Castro in the early 1960s, turned homes into potential cash
and, at least technically, recognized an individual's right to private
property.

Yet much remains unclear about the details of the shift away from a
system that allowed only swaps of dwellings of roughly equal value and
was riddled with corruption, illegal constructions and a myriad other
problems.

Cubans generally have welcomed the housing reform, saying it was about
time the communist-run government recognized their right to dispose of
their property as they saw fit — and, of course, to profit from it.

Most Cubans own their homes after paying the government small monthly
quantities for years, some of them since the government seized all
rental and vacation properties in the early days of the Castro revolution.

The Website Cubisima last week listed about 500 properties for sale in
the Havana area alone, with prices ranging from $14,000 to $280,000.
They included several penthouses and eight properties with swimming pools.

Another 30 were on offer in each of several provinces, including a
five-bedroom beach house in eastern Santiago de Cuba priced at $200,000.

Under the new law, buyers must be resident Cubans or resident
foreigners, restrictions no doubt designed to block exiles from
personally dominating the new market. Yet Cubans emigrating — until now
the government seized their homes — can now sell them or pass them to
relatives before they leave.

Buyers and sellers each must each pay the government 4 percent on
whatever is higher — the declared price of the sale or the value of the
property as appraised by a government architect.

In line with Raúl Castro's promise that his reforms will not permit the
accumulation of wealth, the new law and regulations also allow Cubans to
own only one main residence and one vacation home.

The reform could help resolve the island's critical housing shortage,
estimated by the government at 600,000 units in a country of 11.2
million. More than half of the existing units are reported to be in
"bad" or worse condition, and old houses regularly collapse.

Three and four generations often live together, divorced couples are
forced to remain in the same quarters and tiny lofts — nicknamed
"barbeques" because of their searing heat – are added to many rooms.

At the same time, some retirees, divorcees, widows and widowers are
holding on fiercely to large but mostly empty homes and making ends meet
by illegally renting bedrooms to foreign tourists.

The new reform "is good because people can re-size — sell if their place
is too big and buy if they need something bigger," said one Havana woman
offering a penthouse for $140,000.

Yet many Cubans wonder exactly how the reform will work, given the
widespread corruption used in past years to sidestep the government
restrictions on housing swaps.

"They only legalized what was happening illegally for decades," said
Camilo Loret de Mola, a former Havana lawyer who admits he handled many
illegal cash payments for housing "swaps."

In a country where the average monthly salary officially stands at $17,
and where banks do not offer mortgages, most buyers are expected to get
help from relatives and friends abroad.

Only a handful of Cubans may be able to pay even $10,000 for a dwelling
– perhaps singers and other artists who earn money abroad, perhaps
operators in the island's massive black market.

Yet the new regulations require that payments for real estate be made
through the Central Bank, and that the buyer certify that the money came
from legitimate sources.

Cubans also question whether property titles, which contain the detailed
descriptions of lots and homes, have been kept up to date as required in
the municipal offices of the Institute of Housing.

Many dwellings have been subdivided over the years into apartments and
even single rooms used by as many as eight families, with unclear
boundaries and ownership rights.

Apartment blocks built under the Castro revolution issued property
titles to owners but have no legal arrangement for the maintenance of
common items such as elevators, water pumps or landscaping.

"There's no owners' association here, nothing," said dissident Angel
Moya, who lives in an apartment owned by his mother-in-law in Alamar, a
1980s housing development in eastern Havana.

But if she wanted to sell the apartment, she would have to get his
approval because Cuban law says that anyone who has lived in one place
for five years or more cannot be forced out.

The new law also makes no mention of new construction, or of the many
areas where housing swaps required security clearances because of
military or other activity.

There are Frozen Zones, Restricted Zones, Special Zones and even Speed
Ways – including Havana streets that Fidel Castro's armored vehicles use
between the city and his home in a western suburb.

Loret de Mola noted that the new law and regulations also make no
mention of a pardon for the many illegal housing deals done over the
year with the help of payoffs to government officials.

So many houses in one sector of the famed Varadero beach resort were
bought in the 1990s by South Florida exiles through relatives on the
island that it is jokingly referred to as "Hialeah Heights."

Spaniards, Russians and other Europeans also have bought vacation places
in Cuba over the years, "all on the black market," added Loret De Mola,
who now lives in Atlanta.

Some Cubans remain wary of the political will behind the housing reform,
noting that Fidel Castro put a quick stop to a 1990s program to build
condominiums for foreigners when fancy buildings began popping up along
his route between home and office.

But even some Cuban exiles who have been highly skeptical of Raúl
Castro's previous reforms, like sociologist Haroldo Dilla, now argue
that the housing reforms seem promising.

They "merit applause … because they are a positive and substantial
step," Dilla wrote in a recent column published on the Web site
Cubaencuentro.

The column's headline played off the signs, "This is your house, Fidel,"
that many Cubans displayed in their homes soon after Castro seized power
in 1959.

The title: "This is my house, Fidel."

http://www.miamiherald.com/2011/11/19/v-fullstory/2510578/online-head.html