Raul’s Cuba tweaks housing, wage rules

updated 7:30 p.m. ET April 11, 2008

HAVANA - Thousands of Cubans will be able to get title to state-owned homes under regulations published Friday — a step that might lay the groundwork for broader housing reform.

The measure was the first legal decree formally published since Raul Castro succeeded his brother Fidel as president in February. It comes a day after state television said the government also will do away with wage limits, allowing state employees to earn as much they can as an incentive to productivity.

Together, housing and wage restrictions have been among the things that bother Cubans the most about their socialist system.

The housing decree spells out rules to let Cubans renting from their state employers keep their apartment or house after leaving their posts. They could gain title and even pass it on to their children or relatives.

Thousands of Cubans could take advantage of this move, including military families, sugar workers, construction workers, teachers and doctors.

Holding onto state housing originally designated for specific workers has been a widespread but usually informal fact of Cuban life. A 1987 law had foreseen transferring such housing to occupants, but this new measure should clarify their legal status.

"This is like no man's land that they are legalizing," said Oscar Espinosa Chepe, a state-trained economist who became a critic of the government. "It gets rid of that insecurity many people had and alleviates bureaucratic pressure."

By law, Cubans still cannot sell their homes to anyone but the government, though they can swap housing with government approval — a process that can take years to complete.

First in a series of reforms
Two officials at Cuba's National Housing Institute said Friday's law was likely the first in a series of housing reforms. Both asked not to be named, however, because they were not authorized to speak to foreign media. They said "thousands and thousands" of Cubans would be affected, but did not give exact figures.

Espinosa Chepe, who was jailed for his political views during a 2004 crackdown but subsequently released on medical parole, said that "giving people deeds could give them more freedom to sell their homes and maybe rent them as long as they pay taxes."

Home to 11.2 million people, Cuba suffers from a severe housing shortage. Officials say they need half a million additional homes. Critics claim the need is twice that.

The housing law was published a day after a commentator on state television said the government also will do away with wage limits, allowing state employees to earn as much they can as an incentive to productivity. Economic commentator Ariel Terrero said a resolution approved in February but not yet published will remove the salary caps designed to promote social and economic equality.

"For the first time, it is clearly and precisely stated that a salary does not have a limit, that the roof of a salary depends on productivity," said Terrero. He added that he doesn't see this as a violation of Cuban socialism, but rather support for the mantra of "from each according to his work, to each according to his ability."

Average pay: $19.50 a month
The government controls more than 90 percent of the economy, and while the communist system provides most Cubans with free education, health care and heavily subsidized food rations, the average salary is just $19.50 a month.

An end to wage caps could one day lead to a true middle class, since it would potentially allow Cubans to openly accumulate wealth. But it defies the notion of an egalitarian society that Cuba has worked for decades to construct.

Since becoming Cuba's first new president in 49 years, Raul Castro has done away with bans that prohibited Cubans from owning cell phones in their own names, staying in tourist hotels and buying DVD players, computers and coveted kitchen appliances.

He also has acknowledged that state salaries are too small to live on and pledged steady improvements. But Terrero said simply raising salaries will not do enough, because workers who all earn the same have little incentive to perform well at their jobs.

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