Much more detail about Venezuela's potential housing crisis | Choice Reader Comment |Axisoflogic.com

Yesterday we published an article from teleSUR, the premier news service of Venezuela, entitled "Housing in Venezuela Could Be About to Get Bad, Really Bad".

Reader Arturo Rosales wrote to add significantly more details than teleSUR's piece and we are providing it below.

Arturo is a daily reader of Axis of Logic and a frequent contributor. He is also one-half of our 'eyes and ears' on the ground in Venezuela and is able to filter through the usual bumph published by the mainstream news outlets in the West - and even in Venezuela.

Arturo's comments (edited only for spelling/grammar/typos):

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There is far more to this threat to public social housing than described in this article. First of all, the people who lost their homes and belongings in the floods and were living in refugee camps for months and sometimes years, were actually given free-of-charge homes. There were about 120,000 families involved. The rest have special mortgages at a 7% rate, payable over 30 years and directly geared to the family’s ability to pay. These are units that belong to the family and not to any individual.

The families are owners (leaseholders) as stated in the law signed by Chávez in April 2011 and are allowed to sell after 5 years, but only to the National Housing Association so that the unit can be assigned to another family in need, normally with children, and the unit does not enter into the private speculative housing market.

Currently, these units were “sold” to the owners at around Bs 1,5 million but similar properties on the private market are priced anywhere between Bs. 25 – Bs. 30 million. It is easy to understand why this is a vote grabber as Borges’s plans appeal to the lowest common denominator of the human psyche – greed. In fact,when it was announced that the MUD had won control of the national Assembly on the night of December 6th, a huge cheer could be heard from these socialist built housing units on the Avenida Bolivar in Central Caracas!

Borges did not present actual legislation on 12 January, but a proposal as the actual law was not ready. The kicker is that it is the Mortgage Departments of the private banks writing this law because if these housing units enter into the private sector, then families who have a right to the deeds to be able to sell on the speculative market will be obliged to accept commercial mortgages from the private banks. Monthly payments could balloon and I, for one, am certain that just as the private banks were forced to abandon their Indexed or Mexican credits back in 2000, pay mortgages back, or recalculate the mortgages, they will now be rubbing their hands at a potential one million or more homes being forced to take commercial mortgages under their conditions.

This could be a disaster for many families who might sell for a quick profit and return to live in the dangerous environment of the barrios. Such a step will be a big step backwards in improving Venezuelans' lives and their quality of existence. But the right wing is not interested in this as long as their bankster buddies make a killing and they get votes short-term to win the presidency.

The Venezuelan constitution allows for various forms of property and such housing units are not classified as “private property” but “social or communal property”; so any law passed by the National Assembly could well be blocked by the Supreme Court – which I am sure it will be.

The irony is that the opposition state governors and mayors have not built one housing unit for the poor but want to ride on the back of this achievement of the Bolivarian revolution to gain votes and fleece the humble owners. From 1958–1998 when the opposition was in power – 40 years – they managed to build just 1.4 million units. The Revolution will build 3 million by end of 2019 if plans continue.

- Arturo Rosales

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