In Cuba: A Home of One's Own

In Cuba: A Home of One's Own
Posted: 11/8/11 11:03 AM ET

According to news accounts, Cubans lined up Thursday morning to buy
newspapers that explained the biggest change to their economy in decades.

Cuba has created a private market for housing. Effective November 10,
Cubans will have the right to buy and sell their homes at prices they
set. While the government will collect a modest 4 percent tax at both
ends of the transaction, this economic reform will have ripple effects
for Cuban families and the Cuban economy that are far-reaching,
irreversible, and real.

As Marc Frank wrote in the Financial Times:

The easing of restrictions on property ownership is likely to reshape
Cuban cities, spur real estate development and speed renovation of
Cuba's picturesque but dilapidated housing stock. It is also expected to
reconfigure Cuban conceptions of class as some homeowners cash in their
properties and areas of Havana are gentrified.

Under the current system, Cuban housing has been in crisis. While Cubans
were guaranteed places to live, the inability to buy and sell their
properties curtailed mobility. Generations of families are crowded into
homes, many run down, sometimes with divorced couples living together,
because, as the Wall Street Journal succinctly said, "there was nowhere
else to go."

A decision to move from one house to another -- which entailed informal
efforts to locate properties that people were willing to trade and
permission from the government -- forced Cubans into grey market
activities on one hand and into a cumbersome bureaucracy on the other.

"What happens now is that all that bureaucracy and all that hassle will
disappear," says Dr. Carlos Alzugaray Treto, a long-time diplomat and
professor at the University of Havana, who explains in this interview
what the new law means for Cubans.

The immediate benefits are clear. Cubans, especially those with family
supporters abroad, will be able to invest in housing and renovate their
homes, which will in turn create demand for construction and other
services offered by the newly-legalized small businesses in Cuba,
raising incomes and adding new private sector jobs. "To say that it's
huge is an understatement," said Pedro Freyre, an expert in
Cuban-American legal relations who teaches at Columbia Law School, in an
interview with the New York Times.

President Obama, who has been responsible for incremental but positive
reforms in U.S. policy toward Cuba, has time and again voiced his
skepticism about the sweep and significance of the Cuban economic reform
process, telling Spanish-speaking reporters in September this year: "We
have not seen evidence they have been sufficiently aggressive in
changing their policies economically..."

That depends on what your definition of "sufficiently aggressive" might
be. If it means Cuba must completely undo its economic and political
system as required by the Helms-Burton law, we need not hold our breath.
Cuba is not going to do that.

But if it means creating private markets in housing for the first time
since the revolution, giving Cubans the pride that comes with owning and
fixing up their own homes, opening opportunities for capital formation,
establishing clear regulations and liberties under the Rule of Law
through organic changes that come from within, all of which give Cubans
the opportunity to lead more prosperous and independent lives, we think
the President of the United States ought to applaud and acknowledge that.

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http://www.huffingtonpost.com/sarah-stephens/cuba-private-property_b_1077651.html