The secret capitalist of Havana

NY Times:

Virtually every square foot of this capital city is owned by the socialist state, which would seem sure to put a damper on the buying and selling of property.

But the people of Havana, it turns out, are as obsessed with real estate as, say, condo-crazy New Yorkers, and have similar dreams of more elbow room, not to mention the desire for hot water, their own toilets and roofs that do not let the rain seep indoors.

And although there is no Century 21 here, there is a bustling underground market in homes and apartments, which has given rise to agents (illegal ones), speculators (they are illegal, too) and scams (which range from praising a dive as a dream house to backing out of a deal at the closing and pocketing the cash).

The whole enterprise is quintessentially Cuban, socialist on its face but really a black market involving equal parts drama and dinero, sometimes as much as $50,000 or more.

These days, insiders say, prices are on the rise as people try to get their hands on historic homes in anticipation of a time when private property may return to Cuba. Exiles in Miami are also getting into the act, Cubans say, sending money to relatives on the island to help them upgrade their homes.

Officially, buying or selling property is forbidden. But the island has a dire housing shortage, despite government-sponsored new construction. And that has led many Cubans to subdivide their often decaying dwellings or to upgrade their surroundings through a decades-old bartering scheme known in Cuban slang as permuta.

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One of the problems of the government owning everything is that there is no property to tax. So the rent become the tax, but since there is no competition for providing housing their is no incentive to maintain the property or improve it. Cuba is a class book example of the failures of socialism and communism. It is most productive at producing poverty and squalor, yet, in that squalor is a yearning to be free and enjoy transactions that come with freedom. Private property ownership is one of the more important.