Thursday, September 21, 2006

by Brian Ellsworth

CARACAS, Venezuela (Reuters): Oswaldo Reyes may fondly remember living for 24 years in the house he built in the Caracas hillside slum Casalta III. But now the only thing on his mind is the honking horn on a government digger demolishing the remains of his home.

Because the home was crumbling on the eroding hill, authorities evicted him, a wrecking crew gutted the unsafe structure to stop anyone moving back in and Reyes was scrambling to salvage a valuable metal girder before the heavy machines arrived.

"It makes you want to cry, losing everything like that from one day to the next," said Reyes, squatting in the rubble that used to be his living room. "The municipality, the housing ministry, they just tell me I have to keep waiting (for a new place)."

With housing prices going through the roof, the 41-year-old now lives in a government shelter outside Caracas.

Venezuelan President Hugo Chavez has built a strong base of popular support through multibillion dollar health and education programs. Buoyed by an oil-fueled economic boom, he is expected to easily win re-election in December.

But the Caracas real estate chamber estimates a deficit of around 1.7 million homes nationwide. And the lack of affordable housing has put the crunch in the electoral spotlight.

Officials are accelerating building programs and threatening expropriations to show they are addressing the problem.

Political opponents say voter anger is building towards a president whose housing programs illustrate how he has failed to deliver on promises to improve the lives of his political base -- the oil-exporter's majority poor.

Venezuela has only built around 120,000 houses since Chavez took office compared to demand during the same period of about 800,000, according to private sector estimates.

The shortage has been felt most strongly in Caracas barrios like Reyes' slum -- clusters of tightly packed houses with narrow snaking streets where poverty and violent crime often coexist with Venezuela's ebullient Caribbean cheer.

Housing prices jumped around 35 percent from 2004 to 2005 and building materials like sand and bricks -- often used by the poor to build their own homes -- have nearly doubled in cost over the last year.

Last month, Chavez ally and Caracas Mayor Juan Barreto upped the ante by ordering the expropriation of two posh golf courses in the capital to make way for new homes for 25,000 families -- though the government criticized the move.

BLAME GAME

Explanations as to who is to blame for Venezuela's housing crunch are as abundant as the homes are scarce.

Chavez' critics say his anti-capitalist rhetoric and land redistribution -- which owners say violates property rights -- have made builders unwilling to take on new projects.

"Basically, it's due to the fact that (investor) confidence disappeared with the arrival of Chavez," said Luis Emilio Vegas, president of the Metropolitan Real Estate Chamber.

Caracas residents also complain the government has turned a blind eye to squatter invasions of unoccupied homes and say the capital's municipality has threatened to expropriate dozens of apartment buildings.

Chavez, who is a close ally of Cuba's Fidel Castro and promises a socialist revolution, has acknowledged the severity of the problem and fired two housing ministers for failing to meet building targets since creating the office in 2004.

He blames the housing shortage on the capitalist system he has promised to reform.

"Only by transforming the old model can we resolve the housing problem," he said.

Housing Ministry officials did not respond to requests for comment on the issue, but Housing Minister Ramon Carrizales has promised to build 150,000 houses this year alone.

Government supporters also note Venezuela already had a deficit of around 1 million homes when Chavez took office in 1999.

The ministry also has provided temporary shelters for Venezuelans who have lost homes, offered grants of around $23,000 for poor citizens to buy new ones and has launched a program that replaces substandard shacks with new homes.

But even in Chavez strongholds like the slum of Casalta III, patience is wearing thin as houses continue to crumble.

"They evacuated us because the ground is sinking, the houses are cracking, so we went to a shelter," said Victor Palacio, 61, standing on the hillside overlooking the valley of Caracas and its sprawling shantytowns.

"It's not a very good option, but it's the option we have."

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