Wednesday, December 31, 2008

Cuba's black market housing boom

Cuba's black market housing boom
By Linda Pressly
BBC Radio 4's Crossing Continents

Maria Julia is desperate. She lives in a Havana flat that belongs to her
husband's grandparents.

For the last seven years she and her husband have shared a bedroom with
their two children.

Maria Julia - not her real name - fears her relationship with her
husband will not withstand the pressures of their living arrangements
for much longer.

She says she has only one chance of securing a separate flat in Havana
for her family and saving her relationship - and it is drastic.

"The only option I have is to divorce my husband, and to marry a man who
has legal title to a flat. I will pay him. Then in two years, he will
sign over the property to me, we will get divorced and I will marry my
husband again."

This complicated transaction will cost Maria Julia $10,000 (£6,800). It
is a fortune in Cuba, but the minimum going rate. Her sister has sent
her the money from the US, and Maria Julia has it hidden - in cash -
somewhere in Havana.

Maria Julia's plan to buy a flat is illegal, which is why we cannot
identify her. In Cuba, only the state has the right to sell property.
Private buyers - or sellers - may end up having their home confiscated
altogether by the state if they are caught.

Swap shop

There was already a shortfall of more than half a million homes before
three hurricanes wrought widespread destruction in 2008.

Overall, the housing stock is in a dilapidated state.

The precariousness of the Cuban economy, which the government says is
partly due to the impact of the US trade embargo, means the new building
programme is not keeping up with demand. So the black market is thriving.

"It's the biggest, really the biggest in Cuba," says Juan Triana, an
economist at the Centre for the Study of the Cuban Economy.

Mr Triana is unwilling to guess at what the housing black market is
worth in cash terms, but he is troubled.

"Everybody's losing. And for me, as an economist, it's frustrating.
Today if you want to buy your home, you have to use the black market."

Although Cubans are not allowed to buy and sell properties privately,
they are permitted to swap. And on a Saturday morning, hundreds of
people gather on the Paseo del Prado in central Havana in the hope of
finding someone they can exchange homes with.

Officially no money should change hands. Yet in practice, swapping a
smaller property for something larger will mean parting with several
thousand dollars.

But Maria Julia has no property to swap - her husband's grandparents
hold the legal title to the flat she lives in. So a bogus marriage is
the only way she can see of changing her circumstances.

Maria Julia has used an illicit middleman, known as a corredor -
literally, a runner - to find her new home. She is busy working and has
no time to do it herself. If the deal goes through, she will pay him $500.

Property chain

The transaction will take time, because the man she will buy from in
Havana is still securing his own new property.

"He has a girlfriend in Santiago de Cuba," she says. "They have seen
somewhere in Santiago they want to buy. And his girlfriend is going to
have to marry a very old man in his 80s to get that property.

"They will have to pay the old man too, with the money that I am going
to give them. It is a really long chain."

Cuba is marking the 50th anniversary of its revolution. One of the most
popular moves of Fidel Castro in his early years of government was
housing reform.

Many tenants got legal title to their homes and rents were capped.

Multiple property ownership was prohibited: Cubans can still only
legally own one home in the town where they live and another in the

But 50 years on from those heady, optimistic beginnings, housing is
close to the top of the list of complaints among Cubans.

Juan Marcos Mendez, the vice president of the government's National
Housing Institute, does not deny there are huge challenges. But he
maintains that the answer does not lie in privatising housing.

"Housing is social property. We don't believe it's right for people to
make a profit from it. Of course, some people still haven't understood
the reasons why we have these rules and they try to get ahead illegally.

"But it's only possible to improve the situation by continuing our
building programme - although the United States blockade has a serious
impact on that. We may have problems in Cuba but we don't have people
sleeping under bridges."

And that is true. But the impact of the housing shortage is distorting
family life for many people.

Now Maria Julia is worried that the deal she has set in motion will
further sour her relationship with her husband.

"It's one thing to accept the fact you have to make a bogus marriage as
an idea, but quite another to actually do it.

"I have a worry - maybe it's a premonition - that I'll solve the housing
problem for me and my children, but my relationship with my husband
won't survive."

You can hear Linda Pressly's programme about the Cuban housing crisis on
BBC Radio 4's Crossing Continents on Monday, 29 December, 2008 at 2030
GMT. It will be repeated on 1 January, 2009 at 1230 GMT.
Story from BBC NEWS:

Published: 2008/12/29 10:52:39 GMT

No comments: