[Marxism] With a Whisper, Cuba ¹ s Housing Market Booms By MARC LACEY January 28, 2008

[Bonnie Weinstein]

With a Whisper, Cuba¹s Housing Market Booms
By MARC LACEY
January 28, 2008
http://www.nytimes.com/2008/01/28/world/americas/28cuba.html?ref=world

HAVANA ‹ Virtually every square foot of this capital city is owned by the
socialist state, which would seem sure to put a damper on the buying and
selling of property.

But the people of Havana, it turns out, are as obsessed with real estate as,
say, condo-crazy New Yorkers, and have similar dreams of more elbow room,
not to mention the desire for hot water, their own toilets and roofs that do
not let the rain seep indoors.

And although there is no Century 21 here, there is a bustling underground
market in homes and apartments, which has given rise to agents (illegal
ones), speculators (they are illegal, too) and scams (which range from
praising a dive as a dream house to backing out of a deal at the closing and
pocketing the cash).

The whole enterprise is quintessentially Cuban, socialist on its face but
really a black market involving equal parts drama and dinero, sometimes as
much as $50,000 or more.

These days, insiders say, prices are on the rise as people try to get their
hands on historic homes in anticipation of a time when private property may
return to Cuba. Exiles in Miami are also getting into the act, Cubans say,
sending money to relatives on the island to help them upgrade their homes.

Officially, buying or selling property is forbidden. But the island has a
dire housing shortage, despite government-sponsored new construction. And
that has led many Cubans to subdivide their often decaying dwellings or to
upgrade their surroundings through a decades-old bartering scheme known in
Cuban slang as permuta.

Some of those housing transactions are simple swaps. Those the government
permits, tracking each one to keep an up-to-date record of the location of
every last Cuban. Many moves, however, are illegal and involve trading up or
down, with one party compensating, with money, another party giving up
better property.

A 1983 film, ³Se Permuta,² portrays how complex the system can get: A mother
scheming to get her daughter away from a boyfriend she dislikes organizes a
multipronged property swap. Of course, the deal, which would have involved
about a dozen people and taken mother and daughter from a tiny apartment
into a spacious colonial-era house, ends up in a mess, as does the mother¹s
meddling in her daughter¹s love life.

³It¹s very Cuban,² Juan Carlos Tabío, who wrote and directed the film, said
of his country¹s real estate bartering process. ³There aren¹t enough houses,
and families can¹t buy them. So they trade.²

Mr. Tabío has no personal experience with changing homes, having lived in
the same spacious third-floor apartment in the well-heeled Vedado
neighborhood since 1957. Many Cubans live in the same dwellings their
families owned before the revolution; others have been assigned units by the
state.

But almost every Cuban is either plotting to upgrade residences or knows
someone in the midst of the labyrinthine process.

Here is how it works. Imagine a married Cuban couple with two children and a
baby on the way who find their two-bedroom apartment in the historic Old
Havana neighborhood too cramped. What are they to do?

Well, with the help of an agent known as a runner they might start by
locating a bachelor from the countryside looking to come to the capital.
They could arrange for the newcomer to move into a tiny apartment in
Chinatown and move its residents ‹ who also have a house in Miramar where
their elderly grandmother lives ‹ to a first-floor unit they sought in
Central Havana. The Central Havana flat is available because the residents
have divorced; so the former wife would go to the bachelor¹s country house,
near where her parents live, while her former husband would go to Old
Havana. The Old Havana family that started the whole process would then head
to their dream house in spacious and quiet Miramar.

Sound complicated? It is. And the government adds even more hurdles by
trying to regulate the swaps with a variety of forms and fees as well as
inspections of the properties involved to ensure that they are of roughly
equal value.

All trades have to be endorsed by the government, but Cubans say slipping
money to bureaucrats increases the chances that deals of unequal properties
‹ as in those that involve money and carry the taint of capitalist yearning
‹ will be approved.

³Under the table, there are all sorts of things going on,² Mr. Tabío said.

The Cuban authorities occasionally make busts, but find the trades difficult
to control.

³It¹s something people shouldn¹t do, but they do and we know it goes on,²
said José Luis Toledo Santander, a professor of law and a member of the
National Assembly. ³It¹s like saying you have to stop at the red light and
you can¹t go until it¹s green. You ought to do it, but not everybody does.²

The trading occurs in plain sight. Under the watchful eye of a police
officer, hundreds of people gather every Saturday under the ficus trees on
El Prado, one of Havana¹s grand avenues. Some carry cardboard signs
describing their units: the neighborhoods, number of bedrooms and whether
there are patios, garages, hot water, private bathrooms and gas supplies.
Less desirable dwellings use tanks of gas for cooking and require residents
to share toilets with others down the hall.

Ricardo Aguiar, 65, who lives in a two-bedroom apartment in the humble
Marianao neighborhood with his wife, daughter, son-in-law and granddaughter,
is looking for a more spacious place in Vedado, a popular area closer to the
center of Havana. ³It¹s going to be difficult,² he said, scouring the signs
on El Prado recently and checking in with the agents who sit on the stone
benches trying to make deals.

³I¹ve just started looking, but there are people who look for years and then
something goes wrong and they never move,² he said.

Nearby, a woman was working the crowd in search of a first-floor apartment
near her current third-floor unit in Central Havana so she would not have to
climb so many stairs.

³You have your system and we have ours,² she said, identifying herself only
by her first name, Alejandra. ³I prefer our system. We don¹t have mortgages
and so we¹re not facing foreclosure like so many of you are.²

Alejandra knows about the foreclosure crisis in the United States because
her son lives in Florida and is struggling to make his house payments. ³I
worry about him,² she said. ³If he loses his job, he¹ll lose his home.²

Property is sometimes seized in Cuba as well, but by the government, not the
bank. Property is taken from those who hop on boats to Florida, although
most switch their houses to relatives¹ names well before leaving. Those
fleeing the island also frequently downgrade their accommodations before
going into exile, trading big places for small ones and using the money
exchanged on the side to pay for their voyages ‹ the Cuban equivalent of a
home equity loan.

Although it is not clear how many thousands of swaps take place annually,
some of them involve the same people again and again, as in the case of a
woman in her 60s who said she had moved 42 times over the last two decades.
³I love to move,² she said. ³I can¹t live in the same place for a year.²

But her movement is about more than seeking new surroundings. She fixes up
each place, then turns it over for a profit, she said in a low voice,
declining to be identified out of fear that the authorities might catch up
with her.

Moving through the crowd with her is a learning experience. She knows the
regulars and can spot the deals. When money is discussed, she and the person
she is negotiating with fall into whispers.

³There are so many liars here,² she said, surveying the crowd. ³They say
they have the best place in Havana, and you get there and you don¹t even
want to go in. I just stop at the door and say, ŒNo, thanks.¹ ²

She said she used money sent from relatives who fled to Miami years ago to
keep her business going.

³It¹s a good time to invest,² she said. ³If you have family outside, $20,000
is nothing, and you can get a good place here. If change comes, and we all
expect it, then you¹re set.²

That is the philosophy of another mogul in the making, who also declined to
be identified by name.

Standing in the living room of a two-bedroom apartment in Central Havana
that he is renovating, the man estimated its current worth at $20,000, a
mint in a country where monthly government salaries can be one
one-thousandth of that. If private property ever comes to Cuba, he estimates
the price will most likely multiply by five.

Through a complicated transaction, the man recently managed to obtain a
historic home in Old Havana that he is also renovating. He said he
researched the ownership history of the dwelling because he did not want to
find one day that it had been expropriated from an American, possibly
leading to a court battle in a post-Castro Cuba. As for his apartment, he
rents rooms to tourists, which the government allows.

He is also buying up old chandeliers and other historic furnishings to
decorate his units. With most people so desperate for money, he said, he
pays next to nothing.

³This is the moment to buy,² he said, referring to Fidel Castro¹s illness,
talk of change by his brother Raúl and many Cubans¹ view that their system,
a half century old, will not remain as it is forever.