In November of 2011, for the first time in approximately 50 years, Cuba officially legalized the buying and selling of private property for citizens and permanent residents, a policy decision many expected to have major implications for real estate in the economically embattled country.
Now, a little more than a year later, what results have these new laws yielded? There are plenty of news articles dating in November and December of 2011 that proffer various theories about the potential economic boom in Cuba.
A woman interviewed for a New York Times article, for example, was the resident of a decrepit hovel. She said she expected finally to be able to put a roof on her home (now technically hers for the first time), and possibly even to make her property yield some revenue.
A recent Miami Herald article discusses the activities of a high-level defector from the Cuban government who quickly became a “house-flipper” after his arrival in the United States. Pedro Alvarez Borrego, once a top official for the government’s food import enterprise, came to the United States under investigation for a corrupt kickback scheme. He arrived in the United States only two years ago and since then, the Herald reports, he has “bought and sold at least eight homes worth a total value of nearly $600,000 and opened a management company.”
Aside from a few stories like this one lightly peppered throughout various media outlets, there is very little information available about what’s really happening in the Cuban housing market. The lack of coverage on the subject speaks volumes about the outcome of the hopes and expectations of Cubans like the woman interviewed by The New York Times.
An article by legal analyst José Manuel Pallí for the Cuba Standard discusses the aftermath of real property rights legislation. Pallí says that although some Americans and Cuban-Americans have made investments in Cuban real estate, those investments have had very little impact in Cuba, where change is very slow to take place. Pallí’s article illustrates that the question of real estate development in Cuba is a double-edged sword, whereon two very different needs are balanced. There is a very prescient need for livable housing in the country, where homes are scarce and people live in extreme poverty.
However, rather than address the housing shortage, the Cuban government has focused its energy on developing tourist attractions, hoping to bring in foreign revenue while placing a great many restrictions on larger-scale foreign investment. Because of this focus, a change in property laws has had little impact on the general Cuban population and comparably small implications for would-be foreign investors.
This is not to say that Cuban laws or policies will necessarily continue in their present direction, or that there have been no changes whatsoever in Cuba. It is now legal, for example, for Cuban citizens to buy building materials for home improvement. However, any changes will likely continue to develop very slowly, and laws governing real estate development remain murky. Although estate prices in Cuba have soared, there is very little indication that high property values will yield actual capital, and the anticipated boom in Cuban real estate may have been more of a buzz and a pop.