Cuban Housing Privatization: A Comparative Perspective on the Future of Housing in Havana, Cuba
Division: Social Sciences
Dept/Program: Inter Studies & Business
Document Type: Undergraduate Student Research
Mentor(s): Rudra Sil
Date of this Version: 01 January 2014
Following the fall of the Soviet Union, Cuba faced significant economic hardship and was forced to reinvent its national economic model. To face this obstacle, Cuba opened up to foreign investment in in real estate in 1995 and used tourism to grow its economy. However, tourism is ideologically inconsistent with the Socialist values that lay at the foundation of the Castro regime and required the development of a system of property rights. In 2011, Decree-Law 288 was established, which authorized the buying and selling of homes between private citizens without government authorization and at market prices for the first time in the history of the Castro government. This law—coupled with other recent developments in Cuba—suggest that privatization of the housing sector could occur in Cuba within the next few years.
What might housing privatization in Cuba—or specifically Havana, where the majority of Cubans live and where there is the most potential for tourism—look like? Traditional real estate tools are insufficient for addressing this question because housing privatization involves moving from a public-oriented housing system to a market-oriented housing system, and real estate tools work best with the latter. For this reason, a method of analysis from comparative politics known as the Most Different Systems Design, a comparative strategy that looks for shared outcomes between two very different case studies, was used. Uncovered similarities must be explained by the underlying component that is shared between the case studies: in this instance, post-Communist housing privatization. Russia and East Germany (or specifically, their capital cities of Moscow and East Berlin) were chosen as the two most different case studies for a number of reasons: different economy sizes and natures, different levels of popular support for Socialism at the time of privatization, homegrown versus foreign revolutions, different legacies of capitalism, different levels of development of political infrastructure, different privatization schemes, and different levels of success post-facto.
To systematically compare East Berlin and Moscow, housing privatization was explored along three different criteria: governmental housing policies and housing indicators, political context preceding and during housing privatization, and ideology. By exploring these three broad categories systematically, a more robust understanding of the similarities and differences between these two case studies can be achieved. To contextualize government housing policies in terms of the impact they made on the emerging housing market, the Wachter-Kroll Six Graph Model from real estate was used.
Based on this method of analysis, Havana can expect a significant increase in housing stock, an increase in housing quality, a short-term spike in housing prices followed by a long-term decrease, initial mistakes in housing construction levels, tax subsidies and direct grants to be effective tools for promoting housing construction, a significant reduction in public expenditure, strong tenancy rights to be maintained, and ideology to serve an important role in speeding up the transition to a stable housing market. Other research that sheds some light on expected developments in Cuba is also discussed, such as research that Socialist cities tend to require extensive renovation and repair due to inefficient placement and construction of housing, research that popular sentiment toward Socialism in Cuba today is declining which could accelerate housing privatization efforts, and research that the lack of a Cuban manufacturing culture due to pronounced tertiarization may result in the exploitation of Cubans due to increasing dependence on foreign corporations. The limitations of this housing privatization analysis are also discussed.
Latin American Studies | Soviet and Post-Soviet Studies
Jariwala, Saumil A., "Cuban Housing Privatization: A Comparative Perspective on the Future of Housing in Havana, Cuba" 01 January 2014. CUREJ: College Undergraduate Research Electronic Journal, University of Pennsylvania, https://repository.upenn.edu/curej/184.
Date Posted: 16 June 2014