Cuba’s Housing Debt with Havana
By Pilar Montes
HAVANA TIMES — The Cuban revolution has a debt with the capital, where residences have severely deteriorated over time; the process of building new houses is slow and the rebuilding of homes in regular or critical condition is sluggish.
In 1959, Cuba’s new government found a capital where many neighborhoods had poor sanitary conditions. These were the first to disappear, and its residents where given decorous homes. The old town and a large part of Centro Habana were in desperate need of repair and suffered from overcrowding.
The urban reform of 1960 lowered rent payments and the Housing Law of 1984 and subsequent reforms offered tenants the option of becoming the owners of the properties they lived in (or to continue under their previous status). It also authorized those who had summer homes to keep these and affected only the owners of apartment buildings.
The neighborhoods of Vedado, Nuevo Vedado and Miramar were the newest and most modern. In general terms, when compared to the rest of the country, Havana was the queen.
When the revolution triumphed, Cuba had a housing deficit of 700,000 homes. Four decades later – and despite the fact that hundreds of thousands of new homes have since been built – this deficit has increased owing to a population increase from 6 to 11.2 million.
In 2013, Cuba’s National Housing Institute reported that, of the country’s more than three million homes, only 61 percent is in good condition, while the rest can be classified as in regular or poor condition.
Some experts consider the percentage of homes in good condition to be an optimistic estimate.
A conservative estimate based on the country’s failure to meet different government plans reveals a housing deficit of about 1.5 million homes. If these were to be built at a pace of 100,000 homes every year, 15 years would still be required to meet the deficit. At the pace of 30,000 homes every year – the one estimated for 2015 – 50 years will be required.
If we consider natural disasters such as hurricanes, new housing needs and building collapses, then the country may well need a century to overcome its current shortage.
In December of 2011, seeking new mechanisms to alleviate this situation, the government approved the granting of personal subsidies of up to 81,000 Cuban pesos (some 3,300 US dollars) and more (for exceptional cases) for individual building initiatives.
“It’s financing and, even though the money must not be repaid, the parties still need to fulfill the terms of the contract,” Miguel Lima, a member of the work team that developed this proposal, told the website CubaSi.
Even though most of the credit requested has been approved, people still run into delays, obstacles and red tape.
In a recent paper, economist Omar Everleny Perez pointed out that, between 1945 and 1958 (the pre-revolutionary period in which the most homes were built, the houses in good or acceptable condition only met one third of the demand, owing to demographic growth.
The researcher at the Center for the Study of the Cuban Economy reveals that these housing-related problems have survived to this day.
Will Isn’t Everything
The economist points out that the obstacles include low productivity, a shortage of qualified personnel and the poor quality of construction work and urban design schemes. A poorly designed logistical scheme by the Housing Program has also been detected.
In many cases, those who receive such credit are unable to find the construction materials they need.
The lack of equipment makes all construction work slower, and the lack of clarity as to what construction technologies to use where adds to the problem. The use of a larger volume of materials for every unit built has also led to a rise in the cost of housing.
Last but not least, delays, obstacles and red tape surrounding the legal processes involved make managing these initiatives harder.
In 2011, following what could be described as an important turn, the government authorized Cubans to freely sell and purchase homes and automobiles.
That said, it has maintained the norm establishing that individuals are only entitled to one residence and one summer home (provided they owned one before the revolution).
Many retired persons or people with relatives living abroad have decided to sell their homes and move to a cheaper residence in order to live off the kind of money their pension does not afford them.
The Coming Changes
The Cuban capital, hallmark of the nation, is where the deterioration of homes and streets is most evident. Some foreigners, who visited the city shortly after the triumph of the revolution, say that Havana is arrested in time.
This is because classic buildings next to the Malecon ocean drive have been refurbished and high buildings in Vedado, such as the FOCSA, the Habana Libre, Nacional, Capri and Riviera hotels, have been repaired.
Today, there’s no time to waste. About to receive 3 million or more tourists this year (not counting those who are to stay at private rentals in Old Havana, Vedado and Miramar), there isn’t enough infrastructure to accommodate the coming visitors.
Those in Havana who lost their homes because of building collapses and hurricanes (who have waited years and even decades to be compensated for their losses) have even less time to wait.
That said, it appears that today’s changes – undertaken privately or through the State – are combining to once again make Havana the Caribbean’s number one destination.
Gerard, don’t think that Havana is a reflection of Cuba as a whole. Within Cuba, yes, some citizens are much more equal than others. Usually the more equal are involved in the Communist Party of Cuba (PCC), but there are others. For example for an Olympic gold medalist a very nice house complete with driveway and TWO car garage was constructed as a reward in our city. Imagine, a TWO car garage in a country where the number of cars including all the taxis is 25 for every 1,000 people. (In Canada there are 469 cars per 1,000)
If you read Gordon Robinson’s contributions or those that Gomezz used to post, you will get some idea of the lives of the privileged. Who you know and who you are related to is a significant factor.
The chances of every citizen having good housing are nil. In the older communities like Havana, much of the property is literally crumbling, and then concrete block homes are built on top of others to provide a roof over ones head.
Even if funding is available to construct a new home, the process of application to the municipality is incredibly slow – as I illustrated earlier and even although the funding is available. But new houses are built for the military with rapidity.
In Cuba, because there is a lack of motivation and lack of recognition of those who apply themselves, nobody cares!
In our city the PCC has a gas station which only a few party members ever use well over an hour can elapse between customers – but there are four staff. About half a mile down the same road, there is a Cimex gas station, which although owned by GAESA does not have in the minds of the public, the same association with the PCC. So while the four party faithful are twiddling their thumbs, there is a line-up at Cimex. The gas is supplied by the same tankers! That accounts for the Cuban shrug of the shoulders while saying: “Es Cuba.”
What condition are government officials houses compared to the everyday people of Havana? Are some citizens more equal than others? Every single citizen desrerves good housing.
Yes Gordon, that is a reasonable response. In 1980 the average size of a house in the UK was 860 square feet. Sorry I don’t know the figures for Canada or the US, but both would be bigger. The traditional Canadian bungalow of three bedrooms was about 1200 Square feet.
My own assessment of “normal” in Cuba would be about 500 – 550 square feet with two bedrooms. It is possible to make a decent two bedroom house in 640 Square feet.
The big advantage in Cuba is that yards, balconies and roofs add to the living space by exploiting the climate.
Circles, in defence of Gordon, I think he was responding to my question (see below) about his definition of a decent house and the percentage of houses in Cuba that meet that definition.
Gordon, the house sounds very nice but that’s not what the article is about. Please try to separate your personal things with the text of the posts.
Decent house Cuba – 800 square feet – three bedrooms – small kitchen / bathroom – large living room and nice portch. All built of cement blocks and rebarred to foundation – metal roof / doors / window shades. Please feel free to check out my houses in Niquero – Granma. they are a block away from the Caribbean Sea but the beach is swamp like.
Gordon Robinson
[email protected]
Proving where the money comes from isn’t the problem. The problem is the delay consequential upon inefficiency and lax organization.
The family house was destroyed by Hurricane Dennis so I put forth $$$ for my family to build two new houses on the large lot. Currently many new houses are being built in Cuba but you must prove where the $$$ are coming from.
Definition please Gordon of “a decent house”? Secondly, what percentage of houses in Cuba meet that definition.
Prior to Raul Castro’s decision to rid the regime for the responsibility of housing, there was indeed a black market (Cubans are largely dependent upon it as Raul himself has recognized). We bought our home well prior to Raul’s decision. When that decision was enacted the previous owner and my wife had to go the the necessary paperwork to make the purchase legal.
I hope I am wrong, but I will bet a couple of glasses of the ‘clara’ produced at La Muralla in Havana, that my niece and nephew will receive no assistance from the regime when eventually they are permitted to build their home. Time will tell dani!
Note “the terms of the contract”. What does the contract say?
Can I pick up two things on a previous post which are answered quite well in this article. You said that Cubans only had ownership of their housing in the last 3 years. They have only had the right to buy and sell since then – though in practice it happened before. As the article says “the Housing Law of 1984 and subsequent reforms offered tenants the option of becoming the owners of the properties they lived in (or to continue under their previous status).” So in fact Cubans have had responsibility for their homes for quite a while.
In my post I suggested that the government set up a fund to provide grants and loans and your reply was “They wouldn’t be interested”. However according to the article “In December of 2011, seeking new mechanisms to alleviate this situation, the government approved the granting of personal subsidies of up to 81,000 Cuban pesos (some 3,300 US dollars) and more (for exceptional cases) for individual building initiatives.
“It’s financing and, even though the money must not be repaid, the parties still need to fulfill the terms of the contract,” Miguel Lima, a member of the work team that developed this proposal, told the website CubaSi.”
Ah Gordon, but you know Machado Venturo and as you know, in Cuba connection with the power brokers has its benefits. You have sensibly utilised such contact to your benefit
I gave factual information about the reality of a housing application. My niece and nephew are ordinary Cubans subject to the inefficiencies of the system so beloved of your amigo.
My niece and nephew as ordinary Cubans, cannot aspire to becoming President and Minister of Health. Such aspiration is confined to those who liase with people like the Second Vice-President.
However Gordon, A warning for your two children. They should consider what their position will be if the people of Cuba get freedom from the current totalitarian dictatorship. When the previous dictator fled, his supporters were shot under instruction of his successor, frequently without trial. Cecilia Sanchez will not be there to save them and neither will Ventura.
Your current contented view may possibly be shattered.
I have built numerous houses in Granma with no problems. Many Cubans are now working outside of Cuba and they plan to build new houses. The cost of a decent house in the Varadero area is now + CUC $ 40,000.00
The houses I built in Granma – labour / material CUC $ 5000.00. In Vancouver these houses would sell for + $ 2 million.
That my friend we may not see for many years to come. Building a legal structure to protect private property is going to take some effort.
In early December 2014, my niece and her husband who have two children, submitted plans to our municipal office, seeking to build a two bedroom home upon a site which has been purchased. Finance is in place.
It is now over nine months later, mid-September, 2015 and despite regular enquiries, permission to commence construction has yet to be granted.
The administrative system built upon socialist concepts, is rankly inefficient.
It is little wonder that Cubans become increasingly frustrated and this frustration has consequences as reported by non-less than President Raul Castro Ruz, when he said on July 7, 2013:
“There has been a propagation of illegal construction with relative impunity, moreover in inappropriate sites, non-authorized occupation of housing”
What has been the consequence of his concern?
Absolutely nothing!
Why?
Because the Castro family regime has devised an incompetent system!
Trying to improve the number of houses to be built annually in Cuba reflects wishful thinking.
The concept of allowing foreign construction companies to operate in Cuba is not possible – the state controls!
The critical state of housing in Cuba is not confined to Havana – it is widespread across the country.
It is not only shortage of $$$ which inhibits action. It is the system of government itself!
Cuba needs $$$, needs property rights reform, needs a mortgage system and needs political stability.
Did you actually read the article and not just the headline? Did you read this : “Today, it is really impossible for investors outside of Cuba to make any headway which means that the potential gold rush is still a few years away.”.
Forbes – one hour ago on Cuban real estate :::
http://www.forbes.com/sites/omribarzilay/2015/09/09/cuba-the-next-best-real-estate-investment-for-americans/
Cuba needs $$$ to build new houses and this will come as the country gets into a market economy.
Cuba needs to allow Foreign construction companies and personnel to help out with this issue, it is indeed critical in some parts of Havana.