Despite Real Estate Reforms, Housing Market In Cuba Sputters

Fox News Latino

HAVANA (AP) –  The residents of 308 Oquendo Street were jolted awake in the middle of the night by violent shaking and a noise that they likened to a freight train, or an exploding bomb.

Part of their building's seventh floor had collapsed into the interior patio, heavily damaging apartments on the floors below. No one died, but the 120 families living in the building were left homeless.

Despite reforms in recent years to address the island's housing problem, such building collapses remain common in Cuba, where decades of neglect and a dearth of new home construction have left untold thousands of islanders living in crowded structures at risk of suddenly falling down.

When President Raul Castro legalized a real estate market for the first time in five decades, it was supposed to stimulate both new construction and maintenance of existing homes. But 2½ years later, there has been only a minimal impact on easing one of Cuba's biggest challenges: a chronic lack of suitable housing.

"We are very worried. The housing situation is critical in Cuba," said Anaidis Ramirez, among those displaced by the Feb. 28 building collapse in the densely populated Central Havana neighborhood.

Ramirez and dozens of other neighbors camped out for weeks on sidewalks and in a nearby parking garage to press authorities to find them decent homes. Some went to stay with relatives, while others found housing in cramped government shelters where families can be trapped for years until a permanent home opens up.

Cuba, a country of about 11 million people, lacks around 500,000 housing units to adequately meet the needs of the island's citizens, according to the most recent government numbers from 2010. The housing deficit widens each year as more buildings fall further into disrepair, punished year-round by the tropical sun, sea and wind.

Sergio Diaz-Briquets, a U.S.-based demographer who has written about the island's housing deficit, estimated the figure is now somewhere between 600,000 and 1 million.

And, he said, adding in the existing units that are structurally unsound or otherwise unfit for occupancy, the true deficit "could be even greater."

In tandem with legalizing the real estate market, authorities are trying to tackle the problem by handing over warehouses, former retail spaces and other underused buildings to be converted into housing. They also created construction subsidies for Cubans looking to repair or expand existing homes.

Angel Vilaragut, a senior official in the Ministry of Construction, told The Associated Press recently that the subsidies and other measures mark a policy change from the days when the state shouldered nearly all responsibility for its citizens' housing.

"It is about seeking solutions to the problem we have today with housing," Vilaragut said. "There has not been a halt to the construction of homes by the state. ... The intention is for the people to have access to materials" such as cement and concrete blocks to do their own building and improvements.

Around Havana, Cubans can be seen taking advantage of the materials now available as they add second stories to homes, enclose balconies to create extra rooms or throw on a fresh coat of paint.

While helpful to individual families, such efforts are piecemeal and have not adequately addressed the overall deficit, analysts say.

Government statistics say new construction has actually declined since Castro assumed the presidency from older brother Fidel in 2008, when 44,775 new homes were built.

In 2011, the year the real estate law took effect, 32,540 new units were built. The following year, it was 32,103. Official figures for 2013 have not yet been released, but officials said late last year that about 18,000 had gone up through the end of October, 80 percent of the target.

Cuban economist Pavel Vidal, a professor at Javeriana University in Colombia, said it may take time for the new law to have an impact, especially because the incipient private sector so far doesn't have the economic resources to finance large-scale new construction.

"Responsibility for the construction of new homes is being given to the private sector, micro-enterprises and now cooperatives," Vidal said. "The new private sector — the scale it has, the capital it has — apparently it does not compensate what the state was doing."

Meanwhile, people like Lazaro Marquez and his family have to make do.

He and his family live in Central Havana in a substandard apartment whose ceiling leaks wastewater every time the toilet upstairs is flushed. To leave the home, his daughter, who is paralyzed, must be carried in her wheelchair down precarious stairs on the verge of caving in.

Although officials agree the family urgently needs better housing, on a ground floor, it has been on a waiting list for six years.

Cubans like Marquez and Ramirez have no choice but to depend on the state, in part because it has not created a mortgage system that would let them borrow money to purchase a home.

"Everywhere in the world the housing demand is accompanied by a finance mechanism, mortgage credits, and until a market of mortgage credit develops, demand will not stimulate construction of new homes for citizens," Vidal said.

Marquez thinks he had a better chance of getting a new home under the old rules, which saw the state redistributing the homes of people who have left the country to those who need housing. The state no longer automatically takes the homes of emigrating Cubans, who are now free to sell their property and pocket the cash.

Average incomes of around $20 a month mean most islanders cannot afford to buy real estate unless they have hard currency through a job with a foreign company or remittances from relatives overseas.

But even in gritty Central Havana, a one-bedroom apartment can cost at least $7,000.

"I drive a bicycle taxi," said Marquez, who makes about $2 a day pedaling passengers through the neighborhood. "How am I going to buy a house or an apartment with what I earn?"