A Government-Sanctioned Land Shortage

The roadblocks to companies setting up shop in Cuba, or at the very least extending services, are plenty and complicated, and speckle the expanse of the spectrum. But particular to developers, the most imposing obstacle is land – simply put, it’s not for sale.

“U.S. developers will have a much more difficult time because the major landowner is the Cuban government,” said Eddy Arriola, chairman of Miami-based Apollo Bank, in an interview with Bloomberg.

Garmendia Pena, Cuba’s ambassador to Canada, recently gave a speech in Ottawa indicating that the Castro government was not opposed to selling property, “but not freely.”

He added: “We want to keep the country for Cubans.”

And here is where the U.S. and Cuba hit a major divide.

Following Fidel Castro’s 1959 revolution, the country’s new regime seized and subsequently nationalized an undisclosed amount of U.S. assets from across the country, including sugar factories, mines, oil refineries and other American-owned business operations, of which the value influential expatriates in South Florida have estimated at $7 billion.

In 2009, the Inter-American Law Review described the seizure as the “largest uncompensated taking of American property by a foreign government in history.”

Before smooth, fluid business can flow between the two economies, an agreement to settle standing debts, whether actual or perceived, will likely need to be reached. It is difficult to predict the course of action considering the unprecedented nature of recent talks – and the U.S.’ continued listing of Cuba as a sponsor of terrorist organizations – but if a final deal includes stipulations regarding land acquisition, developers could be poised to make serious inroads in the country.