Beginning Nov. 10, citizens and permanent residents in Cuba will be able to buy and sell residential property on the island. The move is one of the more major acts of reforms instituted by President Raúl Castro.
The reform was announced Communist Party daily Granma. According to the AP, the new law limits Cubans to one home, requires that transactions be made through a Cuban bank, so they can be regulated and sales are subject to an 8 percent tax.
As we reported back in April, the decision was made during the sixth meeting of the island's Communist Party Congress and it follows some other decisions toward a free market. The government has allowed the private operation of taxis and allowed private farmers to have more land.
The New York Times reports that those changes haven't meant much because there is poor demand in the island. Cubans simply don't have money. The real-estate change, however, could be significant:
Economists on the island favoring freer-market changes have said the country's other reforms — making room for small businesses, and private agriculture — have been limited by lack of internal demand, and some experts have argued that home sales could free up the capital needed to jumpstart the island's seized economy. At the very least, they argue, it will likely lead to a wave of renovation.
"With a housing market, suddenly people have some wealth and that's a stake in the economy that generates activity," said Ted Henken, a Latin American Studies professor at Baruch College in New York. He added: "This is a very positive step in the right direction."
Yet there are also significant social concerns. Mario Coyula, Havana's director of urbanism and architecture in the 1970s and '80s, said that wide-scale buying and selling will lead to a "huge rearrangement" in Havana and other cities as wealthy Cubans move to better areas.