Strolling down the narrow boutique-lined streets on a recent Saturday afternoon, admiring the stunningly refurbished colonial facades and elbowing streams of tourists, we could have been in Soho or any other upscale urban shopping district—but for the colorful laundry hanging from upper-story balconies and the kids of all skin tones racing through the central plaza.
This is Old Havana, where a 20-year old experiment in urban planning and historic preservation has essentially revitalized a decaying historic center without displacing its poor and working class population. Now, the question is whether Cuba’s recent market-based housing and economic reforms could significantly alter the character of dynamic neighborhoods like this one, creating new gentrification pressures that reinforce persistent class- and race-based inequalities in Cuban society.
The restoration of Old Havana —a .826 square mile district containing some 3,370 buildings and 66,750 residents, which was declared a UNESCO World Heritage site in 1982—has been carried out under a unique model of self-financing and sustainability that has achieved worldwide recognition. Since 1993, the Office of the Historian of the City of Havana (OCH) has had broad authority  over all planning, land use, development, and investment activities within the historic district, including the ability to develop and operate stores and hotels, tax businesses, carry out construction projects, and use its earnings to finance housing renovations, community facilities, and social services for local residents.
This novel approach is linked to a new focus on tourism that began in the 1990s, when the collapse of the Soviet Union wreaked havoc on Cuba’s economy. It also marked a recognition that the Revolution’s rural priorities, which had diverted resources away from Havana for decades, were exacerbating the destruction of the city’s architectural heritage. (The process of neglect and deterioration had begun much earlier, leading to a proposed U.S.-style urban renewal plan by the Batista dictatorship that would have demolished much of Old Havana, and was promptly squelched by the new Revolutionary government.)
The OHC, despite its autonomy, has a high status within the Cuban government. It is linked directly to the Council of State (Cuba’s top governing body) and is not subordinate to any ministry.
The OHC’s track record to date is impressive. Starting with the reconstruction of Old Havana’s four public plazas, it has now restored 40% of the district’s deteriorated buildings, typically with commercial space on the ground floor and housing above. The OHC operates more than 300 facilities,  including 18 hotels, a tourism agency, restaurants, galleries, museums, and a radio station. It also runs a construction company that restores historic structures.
Over the past 15 years, OHC has generated more than $400 million  in net revenues from its operations, as well as taxes and rents paid by private businesses under its jurisdiction. Its current annual profits exceed $40 million. Of this total, around 45% is reinvested in tourist-oriented businesses, 20% is returned to the central government, and 35% is used for housing renovations, community facilities, and social programs.
OHC’s social programs include a center for children with special needs, a home for women with high-risk pregnancies, assisted living facilities for the elderly, and educational programs for schoolchildren provided by the museums that it operates. OHC also runs a school , funded in part by the Spanish government, to train skilled craftspeople in rehab trades. It has created more than 13,500 jobs , 42% of which are held by women and 20% by youth under age 25.
For the most part, the revitalization of Old Havana has occurred without involuntary displacement, although not all original residents are able to return, and the process has not been free of difficulties. Because many of the units undergoing renovation are severely overcrowded—especially tenements which have been illegally divided into single room units with shared facilities—not everyone can be re-accommodated.
Some households have accepted relocation  to outlying districts, where they have become owners of new apartments that are spacious and well-equipped, but not easily accessible to Havana. Some elderly residents have moved to rent-free assisted living facilities in the neighborhood. Others have waited years to return, living in nearby temporary housing.
On the issue of who gets to return, there are alternative narratives. According to one architect/planner we spoke with, OHC multidisciplinary teams work closely with residents to assess their needs and options, but leave the final decisions about who stays and who goes to the residents themselves. Others referred to an official priority system that favors legal occupants (excluding squatters, or illegal migrants to Havana), long-term residents, and those who “contribute to the tourist economy.”
Like other tourist-oriented ventures, the OHC’s initiatives have been criticized for furthering social and economic inequality in Cuban society. Clearly most Cubans can’t afford to shop in Old Havana’s upscale boutiques. Still, as historian Félix Alfonso has noted, “What makes this restoration unique is that it’s not an example of gentrification, where the rich buy and restore buildings while the poor are moved out. Our historical center is remaining a place where (ordinary) people live and work.”
Could recent (2011) changes in Cuba’s housing laws that legalize the free market sale of housing unleash speculative pressures that work to undermine this vision? The new housing law  is part of a broader package of reforms (including a significant expansion of self-employment) that are designed to revitalize Cuba’s socialist economy and absorb steep layoffs in the government workforce. It is widely viewed within Cuba as a way of rationalizing the existing housing exchange system—currently restricted to “house swaps” of equivalent value—that makes it difficult for people to move and encourages evasion and corruption.
With the legalization of sales, it’s at least theoretically possible that some owners of unrenovated units in Old Havana (still a significant majority of the housing stock) will be able to reap the benefit of the government’s investment in the neighborhood by selling at elevated prices. Potential buyers include other Cubans with access to cash—from relatives abroad, lucrative self-employment in the tourist industry, or other sources both legitimate and illegitimate.
Reportedly, increasing numbers of Cubans living abroad are seeking to purchase homes for themselves (through straw buyers, since legal sales are restricted to permanent residents of Cuba). Speculators may also be attracted to this market, although legal ownership is limited to one primary residence and a vacation home.
Still, the substantial cost of renovations required for most units in Old Havana is likely to constrain both demand and prices, as is the lack of traditional mortgage financing. While the government has expanded access to credit for building repairs, real estate—other than vacation homes—can’t be used as collateral. Given the historical importance in revolutionary Cuba of protecting tenants against eviction—which could result from mortgage foreclosure—this prohibition is unlikely to change any time soon.
As for the OHC-renovated units, it’s currently unclear whether they can be sold by their occupants at unrestricted market prices. While knowledgeable OHC architects and planners told us that at least some categories of residents have ownership and resale rights (or will acquire them in the future), official OHC publications  suggest that these residents will remain as renters in perpetuity. Logically, these renovated units should provide a bastion against gentrification, although the evolution of residents’ tenure and resale rights bears watching.
A review of current real estate listings on Cubisima , Cuba’s new “Craig’s List” (for housing and other items and services), shows only 300 units on the market in Old Havana, out of a total of some 12,000 Havana listings. Other popular neighborhoods farther from downtown, with better housing stock and amenities, have a much higher proportion of listings and may be more immediately vulnerable to gentrification pressures.
It would be paradoxical indeed if the tourism that appears to be saving Old Havana were ultimately responsible for destroying it. Still, a more immediate threat may be posed by the continuing deterioration of the district’s remaining unrenovated housing stock, with partial or total building collapses still occurring on a regular basis. For the OHC, saving Old Havana from destruction by either gentrification or deterioration may be simply a race against time.
Emily Achtenberg is an urban planner and the author of NACLA’s weekly blog Rebel Currents, covering Latin American social movements and progressive governments (nacla.org/blog/rebel-currents ).