As an illustration of the role of prices in an economy, consider the experience of Cuba without

Question:

As an illustration of the role of prices in an economy, consider the experience of Cuba without housing prices. In 1960, the government confiscated most housing and outlawed its sale and rental. Tenants who paid monthly rent to the government for 20 years became homeowners of sorts—they officially owned the dwelling, but could not sell it or rent it to others. The impossibility of resale and rental meant that homeowners had less incentive to repair and maintain their property. As a result, a large fraction of the housing stock is in mediocre or poor condition (30 percent in 2013). In addition, few new dwellings were built in the last 50 years, leading to a large housing deficit (roughly 1 million dwellings in 2013).

Housing reforms in 2011 restored prices to the Cuban housing market. The reforms authorize the sale and purchase of homes for Cuban citizens at prices chosen by sellers and buyers. Economists expect these reforms to provide homeowners with greater incentives to repair and maintain their dwellings, and to increase housing construction.