Housing — A Basic, Fundamental, Human Right, and how Immoralities and Greed take this away.
By: James Griffith
Tags: Housing, Human Rights, Capitalism, United Nations, Commodities

This piece was written with regards to Leilani Farha’s statement on the right to adequate housing, to the Office of the United Nations High Commissioner for Human Rights in 2017. The report can be found here.

The housing market is changing. As stated by Leilani Farha the modern housing sector is being manipulated by many economic agents and unprecedented amounts of capital flow. The multi-billion-dollar corporations are removing housing as a fundamental necessity and a human right, and now treating it as a commodity. This has resulted in my agreeance with Farha and her report presented to the UN as housing is ‘now a means to secure and accumulate wealth rather than a place to live in dignity, to raise a family and thrive within a community.’ Sixty percent of global assets are comprised of real estate, seventy-five percent of this being residential, putting a substantial strain on residents, especially in major or developing cities.

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Real house prices (adjusted for inflation) in New York since 1960 have increased by 184%, and developing countries are seeing house prices jump up to 50% over 5 years. This is also causing rent and mortgages to skyrocket and thus people taking far too much and damaging their lifestyles. After the financial crash, 20% of all US households were underwater due to the decrease in the property value resulting in negative net worth. This is partially to blame for the death of the American economy, aggressive mortgages, as there was no consumer spending due to the lack of disposable income, just mortgage spending.

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In my opinion, all states and nations should have a moral obligation to provide necessary and structurally sound housing for all, without racial, gender, or monetary constraints. This is underpinned by SDG 11.1 — By 2030, ensure access for all to adequate, safe, and affordable housing and basic services and upgrade slums. Even though slums are commonly associated with low-income countries or developing countries with slums in India and the favelas of Brazil coming to mind, inadequate housing and homelessness are becoming a growing problem in nearly all developed countries. The scarcity of real estate is a growing worldwide problem, moreover the scarcity of aptly priced real estate. I believe this is mainly down to the fairly recent free-market revolution, with locals being outpriced due to the basic laws of supply and demand, with the lack of government intervention. Again, I agree with Farha who presented the UN with some current measures that governments have made, and some pieces of legislation she suggested.

One of the most important reforms, especially within the US, since the financial crash was the QRM. The idea originated in Europe to prevent liars loans from banks, requiring the bank to hold 5% of the loan. Therefore, banks stopped giving out loans as freely. The Dodd-Frank then used this idea to create the QRM or Qualifying Residential Mortgage. This prevented banks from making money from reselling loans and required mortgage bankers to help provide the best mortgage for their customers to prevent them from going underwater.

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I feel housing should have a limit on financialization to stop the exploitation of large corporations and the rich, on the poor. A good example Farha made was from her trip to India was that most people who are inadequately housed or homeless have relatively little legal knowledge or information, particularly about human rights relating to housing, and have limited access to legal aid. Because of this, we need to rid ourselves of the free market theorem and focus on government intervention, on both a worldwide and national scale. The development in India, especially in the ever-growing cities, has led to the financialization of some areas, forcing many of the middle-income earners to move into sub-standard living conditions due to being outpriced. To counter this a national moratorium on evictions and demolitions should be enforced, and if it is completely necessary due to safety, the Indian government should always prioritise their population. However, I feel the growing problem would be better combatted with preventative measures seen elsewhere, often in more developed countries, such as requiring construction firms to provide a range of properties in set price ranges so as to prevent class segregation, another prevalent problem in India with the caste system, but primarily to stop locals being priced out. Another measure is the upgrading of existing informal settlements and legally recognising these. This is seen commonly in Brazil with the residents being provided materials to ‘upgrade’ their housing and the provision of other basic human rights such as healthcare and education through projects such as the Favela de Bairro project. Not only does this mitigate the effect of rising house prices, but it also helps macroeconomic objectives such as a potential increase in GDP per capita.

Finally, we see the major problems of financialization of housing in Farha’s Portugal case study, a developed higher income, which is currently struggling from immigration from Northern Africa and austerity measures, resultingly being one of the most unequal countries in Europe. Austerity measures resulted in an increase in poverty levels, lower social protection benefits, higher rates of homelessness, and unaffordable housing, utilities, and other public services. These effects have been amplified in the major cities such as Lisbon where tourism has decreased supply of housing and investors grabbing all available plots for future ventures — ‘The Golden Visa scheme which encourages foreign investment in residential real estate has brought into the country over 2 billion dollars, but has put pressure on housing costs in Lisbon and elsewhere.’

To conclude, my research has not changed my opinion. The financialization of housing can be a great source of FDI; but at what cost to society and basic human rights? As seen, locals are being outpriced of their own homes, forced to live in substandard conditions. This greed shown by others is why the free markets theorem cannot survive as we need governments to intervene, legislate, and regulate to prevent further exploitation.