Iván Tosics, managing director of Metropolitan Research Institute, has a long standing tradition of greeting the new year with a photo essay of issues he learned about in the old one. His photo essay for 2018 treats the issue of the “housing paradox”: how more financing seemingly curbs the affordability of housing across the globe – and no longer only in the so-called “hegde-cities”.
“Most recently I have heard a good phrasing of the issue from Leliani Farha, UN Special Rapporteur on adequate housing, at the Housing for all conference in Vienna, in December 2018″, Tosics begins his think piece.
“Housing became primarily a commodity, where excess money can be parked. Sophisticated financial instruments change housing into a lucrative good while making rents for the users higher. As a consequence, excess capital of many players go now for housing, buying properties in „undervalued areas”, where more value can be squeezed out of housing, provided that the existing users can be kicked out. Politicians, in general, are convinced to support these players as they bring „new development” to the city” – he cites the Special Rapporteur.
Tosics then goes on to consider the exponentially increasing level of investment in the housing sector, spreading from the most outstanding markets to all corners of the globe. The process pushes up prices and curbs affordability for all, ranging from local middle classes to the most vulnerable. In the meantime, medium and low income households gradually relocate towards urban fringes, where they face longer commutes, and a weaker access to job markets and services. Homes on sale as well as rents are becoming unaffordable for an increasing share of the urban populations, as financialized housing markets create and thrive on gentrification and the appropriation of public value for private wealth.
The essay then raises points on preventing or managing the negative consequences of the financialization of housing through adapting regulation and inclusive governance; and the possibilities for local communities, ranging from community-led housing models, to innovative public land use, and municipal regulation to prevent speculative investment.Finally, the analyst points to the need for cross-country agreement on the social understanding of housing.
The full photo essay is available on this link.