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The Commodification of Housing

by | Sep 14, 2017 | News, Vincentian Family at the U.N. | 1 comment

“Housing has lost its social function and is seen instead as a vehicle for wealth and asset growth.” [Leilani Farha, UN Special Rapporteur on the Right to Housing]

We’re becoming all too familiar with these scenarios: families forced out of cities by upward spiraling rents; frequent foreclosures; evictions of tenants so that landlords can renovate and flip dwellings for higher income; housing units left empty as owners/investors wait for a market increase while people on the streets scramble for shelter and affordable homes.

The 72nd Regular Session of the UN General Assembly (UNGA 72) convened at UN Headquarters in New York on Tuesday, 12 September. The General Debate will open on Tuesday, 19 with the theme, ‘Focusing on People: Striving for Peace and a Decent Life for All on a Sustainable Planet’.

What we’re witnessing is the “commodification” or “financialization” of housing—through which residences are regarded more for the income they can produce than their social benefits (being homes for individuals or families where security, stability, and nurturing prevail in close connection with neighborhoods and communities).

In the 2016 book, Defence of Housing: the Politics of Crisis (Verson) David Madden and Peter Marcuse observe, “The form of the housing crisis is different in Manhattan than in the foreclosed suburbs of the American southwest, the bulldozed shacklands of South Africa, the decanted council blocks of Great Britain, and the demolished favelas of Brazil. But they have a common root: they are all situations where the pursuit of profit in housing is coming into conflict with its use for living”.

If the Vincentian Family is to address homelessness from a center of systemic change, it would do well to examine the growing commodification/financialization of housing trend and its effects on human rights.

According to a March 1 report by Leilani Farha, UN Special Rapporteur on the right to housing, “The value of global real estate is about US$217 trillion, nearly 60 percent of the value of all global assets, with residential real estate comprising 75 percent of the total.” She also notes, “Housing is at the centre of an historic structural transformation in global investment.”

The domination of housing by financial markets is trampling on the common good, it seems.
“Financialized housing markets respond to preferences of global investors rather than to the needs of communities,” Farha’s report indicates. “The average income of households in the community or the kinds of housing they would like to inhabit is of little concern to financial investors, who cater to the needs or desires of speculative markets and are likely to replace affordable housing that is needed with luxury housing that sits vacant because that is how best to turn a profit quickly.”

Target 11.1 of the UN’s Sustainable Development Goals calls for all to have access to adequate, safe and affordable housing (as well as for basic services and the upgrading of slums) by 2030. The Universal Declaration of Human Rights (1948) addresses housing in Article 25.1, which states, “Everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing….”

To read the Special Rapporteur’s report on adequate housing, go to this link: https://documents-dds-ny.un.org/doc/UNDOC/GEN/G17/009/56/PDF/G1700956.pdf

“The greatest challenge to the realization of this right (to adequate affordable housing) by 2030 is posed by the unprecedented dominance of financial corporations in the housing sector,” says Farha. “Housing has lost its social function and is seen instead as a vehicle for wealth and asset growth,” she observes.
Human rights must take priority over profits if the situation is to be remedied, Farha indicates. She calls for UN member states to shift their approach to housing so that investments recognize the social aspects of, and human rights involved in, housing.

“International and domestic financial institutions and markets are created and sustained by Governments and must be made accountable to States’ human rights obligations,” Farha’s report states. “States are obliged under international human rights to ensure that private investors respond to the needs of residents for secure, affordable housing and do not cater only to the wealthy or purchase homes simply to leave them empty,” it notes.

In her report, Farha makes a number of recommendations that UN member states can take to “reclaim the governance of housing systems from global credit markets.” She suggests that

“Strategies developed by States and local governments to achieve target 11.1 of the Sustainable Development Goals and the New Urban Agenda should include a full range of taxation, regulatory and planning measures in order to re-establish housing as a social good, promote an inclusive housing system and prevent speculation and excessive accumulation of wealth.”

She also calls upon States to “review all laws and policies related to foreclosure, indebtedness and housing, to ensure consistency with the right to adequate housing, including the obligation to prevent any eviction resulting in homelessness.”

Creative responses to the commodification of housing are arising from various points in the world. Examples, some of which appear in the Special Rapporteur’s report, include:

  1. Various forms of taxation on investors, on vacant homes, on property sales, on foreign owners of property, and on property speculation
  2. Buyer stamp duties on wealthy property owners and investors
  3. Investment of such taxes and revenues in affordable or low-income housing
  4. Legislation that prohibits foreclosures and evictions which result in homelessness
  5. Regulations and planning which focus upon housing as a social good
  6. Building groups and co-operatives
  7. Requirements that builders within a community ensure a certain percentage of truly affordable new homes are built
  8. The prevention of speculation and excessive accumulation of wealth
  9. Inclusive housing systems
  10. The provision of free government land for development of rental housing for low-income persons

What can we do as a Vincentian Family? We could emphasize the human rights aspects of housing in our own neighborhoods, promote social responsibility among financial entities and other corporations, encourage governmental leaders to focus upon the social benefits of housing and the importance of access to affordable housing, and attend local hearings related to proposals for new buildings to ensure affordable housing is addressed.

1 Comment

  1. Carol De Angelo

    Thank you for this article and information. It reinforces how we are addressing this issue as a Vincentian Family though we may be unaware of how and where! For years the Sisters of Charity of New York have been committed to addressing homelessness and need for supportive housing and need for safe affordable adequate housing for all. Many of you might be aware of LEFSA and the committed efforts of its team members and those who are homeless. They address homelessness systemically. Thanks to committed Sisters and colleagues, the Sisters of Charity Housing Development Corporation continues to address housing and homelessness in creative ways. There are other programs I won’t mention here. As a member of Interfaith Assembly on Homelessness and Housing, we collaborate closely with Marc Greenberg, Executive Director, and other faith based groups to address homelessness and need for supportive and affordable housing in New York City and New York State. Together we have achieved many successes that we could not do alone! How to make the connections as Vincentian Family is the challenge!

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