[Marxism] LA Times: Rents soar in Caracas' prospering economy

Fred Feldman ffeldman at bellatlantic.net
Wed Aug 2 06:37:49 MDT 2006

Just a reminder that we are dealing with a capitalist economy.  While
the soaring rents problem may be concentrated primarily in the middle
and upper classes, the poor can also be negatively affected by the
absence of any incentive to provide housing for them.  And the rent
problem can rollover in their direction, especially for working-class
sectors that have achieved a more settled existence.
Fred Feldman

July 31, 2006, 7:25PM

Rents soar in Caracas' prospering economy
Chavez's policies scare builders away from development
Los Angeles Times

CARACAS, VENEZUELA - The lease that Vanete Barr and her husband signed
for an apartment here in October 2004 didn't seem like a bargain at the
time, given the huge number attached: $3,500 a month.
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But it certainly looks like a steal these days.

Rents have since doubled in her building in the expensive San Roman
neighborhood, which is popular with foreigners. Prices have risen 60
percent in the midpriced El Rosal and La Castellana barrios that cater
to natives. And similar increases have registered in the blue-collar
zones of Sucre and Baruta, brokers say.

Rising housing costs have cast a pall in a city otherwise prospering
with new wealth. With the South American country expected to reap more
than $50 billion in crude oil sales this year, President Hugo Chavez is
liberally circulating the proceeds abroad and at home.

He recently joined Russian President Vladimir Putin at the Kremlin in
announcing a deal to buy Russian military aircraft as part of a
long-term package of contracts worth $3 billion.

Chavez also has used Venezuela's oil windfall to wield influence closer
to home, offering fuel under preferential terms to Caribbean neighbors.

Although the Chavez government has largely been able to contain
inflation by subsidizing food and keeping a tight rein on monetary
supply, real estate prices in many neighborhoods have rocketed. Brokers
and economists say it could last many more months, even years.

Chavez's socialist policies have scared away builders, creating a
classic market imbalance: Renters and buyers are chasing too few
available apartments and houses, and prices in many neighborhoods are
going through the roof.

Apartments at any price are hard to find, said Pilar Szabo, a
real-estate broker with Century 21-Mi Casa. She said Century 21's
listings, covering two-thirds of this city of 4 million residents,
showed only seven apartments available at rents of $2,500 a month or
less. And with little new construction under way, prospects for price
breaks are dim, she said.

As long as oil prices stay high, Venezuelans probably will keep
spending. The economy has grown at a 9 percent clip in the last year and
a half, and the Chavez government has boosted government spending 40
percent this year from last.

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