Castro allows private home rentals in Cuba

Copyright 1997
Copyright 1997 Reuter Information Service

HAVANA (May 16, 1997 2:43 p.m. EDT) - Moving to legalize a practice that is already widespread, Cuba's Communist government announced a law Friday that allows the rental of private homes and rooms to Cubans and foreigners.

President Fidel Castro said last month that there was a need to regulate private renting to tax the income made from such rentals and to monitor the whereabouts of foreigners.

A decree published in the ruling Communist Party newspaper Granma said the law will take effect in two months and will oblige private landlords to register with the authorities, pay taxes and report the identity of any foreign guests.

Private rentals in Cuba's growing tourist market have become common in the last two or three years. But authorities are concerned they will undercut the country's state-owned hotels, since private rentals are generally much cheaper.

Castro, whose vision of an egalitarian society has been eroded in recent years as the island adopts cautious reforms to cope with a severe economic crisis, expressed horror last month at the relative wealth of some private landlords.

He noted some people renting out property may earn as much as $600 a month, some 60 times more than the equivalent peso wage of a Cuban worker.

Castro added that there was a security danger to the unregistered renting of rooms to foreigners, since some of them might be "enemies" of Cuba.

Officials have said that about one fifth of the foreign tourists who visited Cuba in the first three months of this year chose to lodge in private homes rather than hotels. The island receives about one million foreign visitors a year.

While the law gave the go-ahead to rentals to tourists, it was accompanied by red tape. One regulation provided for special zones where rentals will not be allowed. Such zones, to be defined by local authorities, might for example be near hotels, to avoid direct competition.

Another regulation prohibits self-employment by a person renting a house or rooms. In theory, this rules out the selling of so much as a cup of coffee to a tenant, meaning that it will not be possible to set up small private hotels providing more services than just a room and bed.

The law also banned rentals to foreign residents representing foreign firms, organizations or embassies -- who make up most of those foreigners living and working in Cuba.

If not already doing so, these people will have to rent from state entities, whose available property is limited and which charge higher prices than private renters.

The law is a step towards liberalizing controls on private property and also towards recognizing that it is not possible for the state to reap every cent of tourist spending.

The island has already allowed small private restaurants to open and they have become a popular alternative to more expensive state eateries for foreign tourists.

Some 80 percent of Cubans are home-owners, many of them having benfitted from cheap purchases from the state of property nationalized after Castro's 1959 revolution. But property dealing is illegal, although in fact widespread.

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