Book brings to light market dynamics real estate de Cuba
Work by IE professor reveals how the segment drove changes in the Caribbean country
Book brings to light market dynamics real estate de Cuba
Work by IE professor reveals how the segment drove changes in the Caribbean country
In 2011, just over five decades after the Cuban Revolution eradicated the country's housing deficit, the government of then-President Raúl Castro authorized real estate transactions. As a result of the Caribbean country's rapprochement with the United States during the administration of President Barack Obama, the real estate market began operating, fueled by the expansion of tourism on the island and driving social, economic and spatial changes, especially in its capital, Havana. Professor at the Institute of Economics (IE) at Unicamp, Aline Miglioli examines the development of this trade and its impacts in the book House for Sale: tourism, real estate market and socio-spatial transformation in Havana (publisher Anticapital Struggles).
The work is based on the thesis written by Miglioli at the end of her doctoral research, which began in 2017 and will be completed in 2022, at the IE’s Department of Economic Development. The research sought to analyze the contradictions that emerged in this effervescent scenario, in which housing became a possibility for social and economic advancement more easily than holding a position in the civil service or participating in a joint venture. According to the author, this new type of mobility transformed the island’s social structure. “It is very rare to find a market in formation. For me, as an economist, it was a laboratory. I was able to observe how this structure also materializes in space,” she says.
The situation observed by Miglioli began to take shape in 2011, when a public consultation held by the Cuban government revealed the extent of the people’s desire to be able to buy, sell and exchange their homes. Due to concerns about real estate speculation, mechanisms were created to restrict this market. “So that people would not start accumulating properties and gambling with the rental price,” explains the author.
The situation is “very sui generis”, says the professor. After all, according to the law, Cubans can only have one house. If they want to enter the tourism economy, for example, they need to adapt their only property to be a place to live and also to provide lodging. “With this opening, a family that lives on the outskirts of Havana and has some savings – usually from a relative who lives abroad and sends money home in dollars or euros – can, for example, buy a house in the city center and turn it into a snack bar. So, instead of depending only on this relative who lives abroad, this family will now have access to the tourists who are there spending well and in euros or dollars”, explains the researcher.
The opening of real estate agencies in Cuba in 2013 served as the starting point for data research, a work completed in 2020, with the outbreak of the COVID-19 pandemic. Seeking to answer why negotiations with houses were once again allowed on the island, Miglioli rescued the history of its housing policy, since the 19th century, outlining the panorama that opens the book. To contextualize the transformations promoted by the communist government, the researcher recovered the Spanish colonial heritage and the influence of the United States between 1930 and 1950. “People in the countryside lived in bohíos, straw buildings of the native people, who had no sewage, sanitation, nothing.”
The policy that ended the bohíos and prohibited real estate transactions, and the accumulation of properties deteriorated over time, due to the moods of the global economy. Starting in the 1990s, with the end of the Soviet Union and in the face of US embargoes, the construction sector in the Caribbean country suffered a setback. “Imagine someone who received a house in 1959. Since then, everything has changed: the family has grown or shrunk; those who were young at that time have grown older and are now left alone with a large house to take care of. People wanted to readjust,” says Miglioli. In the 21st century, rapprochement with the United States has offered the island’s population the chance to glimpse a way to finance their social advancement.
A partnership with the Center for Cuban Economic Studies and the University of Havana allowed the researcher to spend an academic stay in Cuba in 2018. Miglioli, who also had the support of the Coordination for the Improvement of Higher Education Personnel (Capes), concentrated her fieldwork in the country's capital, the epicenter of real estate negotiations. “Havana is a tourist destination and, therefore, a place where this market is related to the possibility of using the property to offer an Airbnb, open a guesthouse or set up a restaurant.”
Her work combined a survey of real estate advertisements and interviews with people interested in negotiating housing, real estate agents and Cuban researchers. The transactions, the author noted, took place in a peculiar way. “There is a street in the center of Havana where people carry posters and photos of the houses they want to sell. You can negotiate the property right there.” Miglioli sought to analyze the relationship between the market and the changes – political, social and economic – then taking place in the country. She also sought to assess whether this openness could recreate or solve the problems fought by the Cuban revolutionaries. “Because the Housing Law in Cuba is very simple: everyone must live in a house and no one must live off the rent of a residence.”
The professor examined the behavior of advertised property prices, in addition to the valuation criteria. According to her study, in order to arrive at the final price of a house, it has become common to include a projection in the value, based on the calculation of the profit that the owner would obtain if he kept the house. Miglioli also found that the architectural style and location of the house, more than its condition or square footage, were important as valuation criteria.
Houses located in neighborhoods where the upper classes lived before the Cuban Revolution, Miglioli noted, have once again become more valuable, as these are buildings where people can live and set up a business at the same time. “Although the revolution has combated the specialization of spaces, neighborhoods like Miramar have once again concentrated those people who have differentiated access to consumer goods. They differ from the average Cuban in terms of income, the way they dress, the words they use and the places they frequent.”
In 2023, with a new research agenda, the author returned to Cuba to observe the changes that the pandemic had caused in the market and noticed a negative impact, compared to the previous effervescence. This report, contained in the book's afterword, shows that negotiations involving real estate began to have a new motivation. “People began to sell their homes with the purpose of migrating. Cubans from other regions, interested in living in Havana or, mainly, in accessing the jobs that had remained in the capital, began to buy these houses. Since tourism had ceased to be the driving force of the real estate market, the crisis became one.”