The changing face of cuba's property market
Photo credit: Lisa Leonardelli
Cuba's property market is undergoing a radical Change, following Raul Castro's revolutionary decision to permit the buying and selling real estate for the first time.
Before 2011, Cubans were only allowed to trade properties, a system that spawned an inevitable black market trade involving illegal cash passed under the table. Three years ago, though, Castro changed the socialist property market into a capitalist industry. Since then, people have begun to renovate homes to improve their potential value, while others have even bought up properties to do up as hotels.
"The market has exploded, especially since the beginning of this year," Sandra Arias Betancourt tells Nick Watt, on the journalists' Travel Channel Show, Watt's World (via Curbed). "We have a lot of people buying."
Betancourt became an estate agent in 2013, one of the first in a trade that many locals have still not yet seen the value of. In 2012, meanwhile, Yosuan Crespo set up a Cuban real estate site: EspacioCuba.com.
The transformation from one type of market to another is occuring at the same time as the US and Cuba restore their diplomatic and trade relations after decades of separation.
Combined, the two developments have sparked rising demand for Cuban property from foreign investors. At present, though, only Cuban citizens are allowed to own property: Americans can invest solely by sending money to Cuban relatives living on the island, who can purchase a home with their cash. The Cuban, though, would own the title deeds.
Nonetheless, a large number of foreigners technically already own homes all over the island. In 1959, Fidel Castro's revolution introduced Cuba's communist reign, at which point the government seized all foreign-owned property and distributed it among the people. But some Americans have retained documents that prove their original ownership of assets. Movie studios hold records of confiscated film reels. A New York Holocaust memorial library retains a document detailing paintings by Van Gogh and Picasso that were taken.
The Cuban government, meanwhile, has formed Palco, a company that leases property to foreign embassies and businesses.
But it is not just organisations with property that used to belong to them: private owners have records too.
After Castro's revolt, the US Justice Department formed a Foreign Claims Settlement Commission for those with confiscated properties. According to USA Today, those claims are worth approximately $7 billion today.
"All of us want to be recognised as the legal owners," Nicolás Gutiérrez, a Miami-based consultant, tells the Guardian. "But the US government is moving ahead with its ill-conceived opening of relations with Cuba without addressing the issue of restoring ownership rights. There should be restitution or at the very least compensation."
Cubans, on the other hand, have their own scores to settle with the USA: in 1999, a Cuban court estimated that the US embargo on the island cost citizens $181 billion, a claim that could outweigh the real estate under dispute.
"Land is going to be very valuable when the system changes," adds Gutiérrez.
Either way, the island's major housing revolution is not over yet.