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Landlords
on the Verge of a Nervous Breakdown
Patricia
Grogg
HAVANA, (IPS) - ”We live in a state
of permanent stress, worrying about
whether we’ll have enough guests, or
waiting for more restrictions to be
slapped on,” complained a
58-year-old Cuban woman who rents out
two of the five bedrooms in her home,
mainly to foreign tourists.
New rules for private landlords that
are about to be put into effect by the
socialist government of Fidel Castro
have begun circulating among renters
over the past few days, said the
landlord, who agreed to talk to IPS on
condition of anonymity.
The circular, dated Jun. 5 and signed
by the president of the National
Institute of Housing, Víctor Ramírez
Ruiz, states that “negative
tendencies and behaviours have emerged
in the exercise of this activity that
distort the very essence of
renting.”
The new provision, which is to go into
effect shortly, as soon as it is
published in the Official Journal,
mentions as examples of “negative
behaviours” the use of homes as
“brothels”, and the “excessive
enrichment” of landlords.
”That is offensive,” said the
renter who was interviewed. “I am an
honourable person who has worked all
my life, and only after retiring did I
decide to rent out rooms to improve
the income of my large family.”
The licence to rent rooms out to
foreign tourists costs her 520 dollars
a month - 250 dollars per room, plus
20 dollars for the garage. In
addition, at the start of each year,
she must pay between 300 and 350
dollars in taxes on the private income
earned over the previous 12 months.
”Of course you earn something, no
one does business to lose money. But
there are months when I barely make
enough to pay the set monthly fee. For
most people, this is a way of living a
little bit better, and has nothing to
do with getting rich, much less with
‘excessive enrichment’,” she
said.
It costs around 30 dollars a day to
rent a room in a private home in this
Caribbean island nation of 11.2
million, while hotel rooms run from 40
to 150 dollars a day, depending on
quality, location, and range of
services offered.
The new government resolution will
create a tax that landlords will have
to pay the state for providing meal
service, even if renters insist that
they do not serve meals to their
guests.
Taxes will also begin to be charged on
the common living spaces used by the
residents of the house, under the
government supposition that the
lodgers also make use of those parts
of the house.
Further, it will become illegal to
rent out a room for less than 24
hours, or to rent out a room to more
than two people. Nor will landlords be
able to hire people from outside the
family for work related to the renting
of rooms.
Another new restriction is that
authorisation to rent out rooms will
not be granted to homeowners who
travel abroad for more than three
months.
”Frankly, many landlords have the
impression that they want us to stop
renting, as if we did not contribute
revenues to the country,” said the
source, who owns a beautiful home on
the west side of Havana.
She and other renters who spoke with
IPS said there are so many
restrictions on their activity that
“it is hard not to cross the line
and break the rules.”
”There are fines of up to 3,500
dollars - now THAT is excessive!”
said another source who did not want
to be identified. She also complained
about the unfair competition from
unlicenced renters, “who can charge
less because they don’t pay
taxes.”
The Cuban government authorised the
renting of private rooms in May 1997,
thus legalising an activity that was
already widespread. ”I began to rent
out rooms about three years before it
was officially authorised,” said the
source.
An economist who also asked not to be
named said that in Havana, which
receives the greatest number of
visitors to the country, there are
currently 2,705 people with licences
who rent - charging dollars - to
foreigners, and 1,067 who charge
pesos.
In addition there are an estimated
8,750 unlicenced renters around the
country who charge pesos, and nearly
5,200 who charge dollars or other
foreign currency. “On my block
alone, there are three people who rent
without paying taxes, against four of
us who do,” said the first source.
According to the economist’s
estimate, private renters in the Cuban
capital, where 80 or 85 percent of all
of the country’s landlords are
located, paid some six million dollars
into the public coffers in 2000.
In his view, the government feels that
the private landlords draw off foreign
tourism revenues from the state by
offering cheaper rooms than those
available in hotels, which are owned,
or partially owned, by the government.
”Private renters earn income that
escapes the hands of the state, which
wants to capture all revenues,” said
the economist.
Official statistics indicate that
there are currently 40,000 rooms in a
total of 266 hotels catering to
foreign tourists in Cuba, 40 percent
of which are four or five-star hotels.
The economist also said that the
number of licences has been reduced in
the past few years for all free
enterprise activities, although the
number of people who run
privately-owned businesses or services
without being officially registered
has not shrunk.
The total number of licences granted
by the state for personal initiative
fell from 208,500 in 1995 to 153,800
in 2001 and 100,000 today, he said.
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