Venezuelan Government Announces Three-Stage Plan for Nationalized Housing Complexes

Venezuelan Vice President Elías Jaua has announced a three-stage plan to hand over thousands of recently nationalized apartments to the victims of fraud committed by the former private owners.

Mérida, November 9th 2010 ( – On Sunday, Venezuelan Vice President Elías Jaua announced a three-stage plan to hand over thousands of recently nationalized apartments to the victims of fraud committed by the former private owners.

“We must create the mechanisms necessary to dismantle, in an exorable manner, these real estate groups that have committed fraud, so that the Venezuelan people will never again be cheated by the oligarchs,” said Jaua during an event at the National Institute for the Defense of People’s Access to Goods and Services (INDEPABIS).

In the first stage of the plan, people who have already occupied the homes will be granted legal title to them, and their rent or purchase payments will be re-negotiated. Then, approximately 460 homes that are fully constructed but unoccupied will be handed over to victims of housing fraud, Jaua explained.

In the second stage, the homes that were left unfinished by private real estate contractors will be finished by way of a special state fund.

In the third stage, the government will build new homes on land that was undeveloped by real estate speculators. For this purpose, President Hugo Chavez approved US$ 1.5 billion and ordered the state-owned Bank of Venezuela to open a line of credit for new home construction in 2011.

Vice President Jaua also announced that the government filed a request with the Attorney General’s Office to open investigations into a series of unresolved housing fraud cases, and to issue travel prohibitions to prevent real estate owners who are involved in the cases from fleeing the country.

Jaua also asked for support from the Venezuelan Supreme Court in defending housing as a constitutional right. Article 82 of the Venezuelan Constitution states: “Every person has the right to adequate, safe, comfortable, and hygienic housing with essential basic services, including a habitat that humanizes the family, the neighborhood, and community relations,” and stipulates that the fulfillment of this right is “the shared responsibility of citizens and the state.”

On Sunday October 31, the government nationalized a series of large housing complexes and urbanizations following complaints about the charging of illegal fees, price speculation, delays in handing over apartments, and the long-term stalling of private construction projects.

Jaua said on Sunday that the nationalizations were possible, “thanks to the fact that we have a government that is independent from any form of domination by powerful economic groups.”

The nationalizations came partially as a response to a growing movement of tenants who have repeatedly denounced what they call “real estate mafias” made up of associations of private real estate companies, police officers, public prosecutors, judges, and other state functionaries who collude to violently evict and defraud the population.  

The movement has demanded that the government establish a moratorium on evictions and enact laws that enable tenants to purchase homes after renting them for a given period of time. One group in particular, called the National Tenants Front, participated in a march today organized by the National Union of Workers to express opposition to both capitalism and corrupt state bureaucracy.

The residents of the nationalized housing projects also made public declarations in support of the state intervention in the housing market.

“We agree with the government’s decision, and we think it should have been made a long time ago,” said Wilmer Gil, a member of a local tenants’ organization who attended the event at INDEPABIS on Sunday.

“We thought the owners had left the country because construction had been stalled since 2008,” tenant Alejandra Avila commented, also at INDEPABIS. “We were seeking this expropriation for years, and we trust that the government will help us to solve these irregularities.”

Rene Navarro from the El Fortín apartment complex said the landlords’ increased housing prices parallel general inflation, a practice that is prohibited by law.

Vice President Jaua thanked the tenants’ movement for engaging with the government. “We appreciate the bravery of the affected families, who approached the Bolivarian government to ask President Hugo Chavez to take action,” Jaua stated.

Venezuela’s most powerful private business associations and opposition media outlets have protested the government’s recent spate of nationalisations interventions into troubled sectors of the economy.

Noel Álvarez, the president of the Federation of Chambers and Associations of Commerce and Production (FEDECARAMAS), said during a nationally televised interview that the interventions are “cheapening the property of citizens who are defenseless against the state.”

The criticism has come in from foreign business associations as well. Antonio Peñalosa, the general secretary of the International Organization of Employers, referred to the “Venezuelan case” as the result of the “blindness” of the government. “What is happening in Venezuela is tragic,” he told the Venezuelan daily newspaper El Universal. “The private sector is being torpedoed.”

Other opposition groups have accused the government of violating the right to private property, citing Article 115 of the Venezuelan Constitution, which guarantees private property as a right that is subject to state regulation and possible expropriation – with indemnity – when the public interest is at stake.

Officials from the governing United Socialist Party of Venezuela (PSUV) say the government has acted in strict accordance with the law. They accuse private real estate firms of violating Article 114 of the Constitution, which prohibits speculation, hoarding, and usury.

The Chavez administration has repeatedly affirmed that it does not intend to bring the entire economy under state ownership, but has broken up large property holdings it calls “monopolies and oligopolies,” cracked down on illicit economic activity.

In the words of National Assembly Legislator Augusto Montiel of the PSUV in a recent press conference, “Private property is being defended by the government; the families who have been affected by usury and fraud by real estate firms will now receive their homes.” Montiel is a member of the intervention management team for the recently nationalized housing complexes. 

Since the PSUV won a smaller-than-expected majority in the National Assembly elections held on September 26th, the government has nationalized several food and agricultural companies, a steel company and major rebar producer, housing complexes, and a textile firm. The accelerated state interventions are said to be aimed at solving persistent problems in sectors of the economy that remain largely under private ownership. Venezuela has an estimated housing shortage of approximately three million homes.