‘Self-employed’ landlords and informal leases
HAVANA — Roberto Miguel comes from Las Tunas province but lives and works in Havana. Age 31, he knows every corner of the capital like the back of his hand.
“I’ve lived in the Marianao [district], the Vedado, even in San Miguel del Padrón,” he says. “I’ve never stayed in the same place for very long. Living that way has its charm. True, it challenges you to work twice as hard to raise the money, to not become too comfortable. On the other hand, there are days when feel like giving up, collecting my things and going back home.”
After he graduated from journalism school, he saw no opportunities in his native province, so he decided to take a chance in the Cuban capital. Today, he has a good job and lives with his girlfriend in an apartment near Esquina de Tejas, in the municipality of Cerro.
Roberto is part of a growing number of young people — professionals, mostly — who, looking for better job opportunities or their independence, decide to leave their homes and rent a house.
Lorena and Mario met five years ago. She works for a travel agency and lived in the Sitios neighborhood of Central Havana, sharing a room with a teenage brother who studies accounting in a technical school.
Mario is a tour guide who lives in Coronela, La Lisa municipality, and lived in his own apartment. Because he and Lorena married last year, they want to have their own home. That’s why they decided to rent one.
“I did it thinking about our own independence,” Lorena says. “My husband’s family adores me, but living with them would be difficult. The same happens at my family’s home.”
Sitting next to her, Mario says that he hopes that renting a house will be a temporary solution “because, even though we both have a good, steady income, I feel that we’re throwing our money away.
“Renting is not an investment or anything like it. It’s paying an X-amount of money every month [they pay 150 convertible pesos (CUC) for a place in La Copa, municipality of Playa], knowing that it won’t come back. But we have to rent, because otherwise we can’t establish ourselves.”
Do they pay what they should?
The rental fee is agreed upon by the landlords and the would-be tenants on the basis of the neighborhood, the quality of the dwelling, the time the tenant plans to rent, and other conditions.
In Havana, the monthly fee to Cubans ranges from 60 to 150 CUC, although sometimes it exceeds the latter. A seeker might find a small one-room apartment in Vedado for 70 CUC, or a two-room apartment in Alamar, East Havana, for 40 CUC.
[One convertible peso is the equivalent of one U.S. dollar.]
The rental of dwellings was authorized in 1988. Before then, the landlords did not have to ask the local authorities for permission and did not have to pay taxes. After 1988, they could rent living space only after listing it “with the authorization of the Municipal Housing Director.” They also had to register themselves with the National Office of Tax Administration (ONAT).
Beginning in 2010, laws made house rentals a “self-employed” enterprise and allowed the rental of houses with more than two rooms.
Article 36 of Resolution 283/2011 of the National Housing Institution reads: “The lease contract will be done in writing by the two parties (original and one copy) whenever the lease lasts more than 30 days.” If the lease is for less than 30 days, the contract is verbal. The contract is fulfilled 15 days after it is recorded and filed.
Nevertheless, all people interviewed for this article admitted that their contracts with the landlord are verbal even though the lease lasts longer than 30 days. They sign no paper and rely on the landlord not to change his mind.
That’s what happened to Ernesto Gómez, who found himself in a pickle because he was told he had 15 days to move out, even though he had paid the entire month’s rental in advance. A recent college graduate, he works for the State, which means that his monthly salary is 345 Cuban pesos (CUP) or 14.37 CUC.
He pays 35 CUC a month and shares the rent with another youth, an artist from Camagüey province. Every month, they must pay 70 CUC, or 1,680 Cuban pesos.
“That’s cheap,” Ernesto says, relieved. He and his roommate live in Santos Suárez, Diez de Octubre municipality, one of the most sought-after neighborhoods in terms of rental fees.
A lady in her forties, Mrs. X (she asked for anonymity), has kept her house in Old Havana closed for the past two years. She is now looking for tenants, so she can earn some extra money. With it, she plans to repair the house and maybe sell it in the future.
“How much do you pay in taxes?” we asked. “Nothing,” she answered. We got the same reply from others who engage in renting living space.
No paperwork, no contracts, everything done outside the law. In our search we didn’t find anyone who had his papers in order, although some landlords like to keep their records clean.
Why the informality? Many claim that the taxes are much too high and cut deep into the revenue.
Resolution 283/2011, mentioned above, says that people can choose to rent a dwelling in Cuban pesos (CUP) or convertible pesos (CUC). If a landlord chooses to rent in CUP, “he is only authorized to rent to people who are permanent residents of Cuba.”
Article 32 of Resolution 298/2011 of the Ministry of Finance and Prices says that if you rent a one-room dwelling you must pay 150 CUC or 100 CUP a month. If the dwelling has two rooms, it’s still 100 CUP. Other prices take into account the square footage of the rest of the dwelling; for example, if there is a swimming pool or a garage.
It doesn’t add up. Not for the landlord, not for the tenant. The situation is getting out of control of the State, which has no way to solve the big housing deficit throughout the island. Meanwhile, young people like Roberto, Ernesto, Lorena, Mario and others keep “inventing” ways to find a living space.
