By Richard Marcantonio, Public Advocates Inc., for CarsonWatch
This Summer, renters will be taking action in cities across the country (on July 6) and in Washington, D.C. (July 12) with a big demand:
End Housing Inequality Now: Stop Giveaways to Wall Street Landlords, Fully Fund Public Housing & People’s Housing Programs.
From there, they are looking ahead to a Renter Week of Action September 17-23. Those actions build on the successful Renter Day of Action led by Homes for All last year, with its message that housing is a human right, not an investment commodity.
When community groups fighting the housing and displacement crisis decry corporate landlords and Wall Street investment firms as human rights violators, some may think they’re just looking for a politically convenient scapegoat.
The United Nations begs to differ.
Earlier this year, the UN General Assembly, through its human rights arm, issued a Special Rapporteur Report on financialization and housing. The main conclusion?
Rather than treating housing as a commodity valued primarily as an asset for the accumulation of wealth [governments must] reclaim housing as a social good, and thus ensure the human right to a place to live in security and dignity.
It’s worth quoting the Report’s definition of its main term, the financialization of housing, in full. It refers to:
structural changes in housing and financial markets and global investment whereby housing is treated as a commodity, a means of accumulating wealth and often as security for financial instruments that are traded and sold on global markets. It refers to the way capital investment in housing increasingly disconnects housing from its social function of providing a place to live in security and dignity and hence undermines the realization of housing as a human right. It refers to the way housing and financial markets are oblivious to people and communities, and the role housing plays in their well-being.
When a landlord is “focused on using housing to turn a profit as easily as possible,” Homes for All found in Renting from Wall Street — their study of private equity giant (and Kushner investor) the Blackstone Group — tenants “struggle to pay severely unaffordable rent,” and “deal with faceless property management and regular threats of eviction.”
The UN Report agrees, calling out Blackstone by name:
The Blackstone Group, the world’s largest real estate private equity firm … spent $10 billion to purchase repossessed properties, emerging as the largest rental landlord in the [U.S.].
And the Report leaves no doubt of the devastating impacts of the financialization of housing. It is hitting renters hard:
Tenants living in housing owned by absentee corporate landlords have complained of sharp increases in rent, inadequate maintenance and conditions as a result of substandard renovations that have been undertaken quickly to flip the home into rentals, and an inability to hold anyone accountable for those conditions.
Financialization is also displacing low-income residents and hyper-segregating our metropolitan regions:
Patterns of racial displacement from urban centers and segregation in evidence in large cities in the United States have led to more severe impacts of financialization and the mortgage crisis being experienced by African-American households.
Finally, financialization is contributing to a lack of accountability by government to its constituents:
Rather than being held accountable to residents and their need for housing, States’ housing policies have often become accountable to financial institutions and seem to pander to the confidence of global credit markets and the preferences of wealthy private investors.
This adds up to a crisis for families, for communities, and for our democratic institutions. And the UN Report pulls no punches in concluding: “Corporate finance … profits from housing crises.”
The role of government is at stake in much of the UN discussion. Thus, the Report notes the culpability of national governments which, by assuming responsibility “for billions of dollars’ worth of distressed debt (high-risk mortgages) and arranging for them to be sold off to private equity funds, have increased rather than decreased the role and power of corporate finance in national housing systems.”
And global financial institutions, “bolstered by neoliberal assumptions” about the supremacy of markets, have used that increased power to urge governments to “dramatically reduce or eliminate housing programmes, privatize social housing and sell off massive amounts of housing and real estate assets to private equity funds.” (The Center for Popular Democracy and the Right to the City Alliance, in a 2014 report, exposed how HUD’s Distressed Asset Stabilization Program is encouraging “public/private partnership” by auctioning off billions of dollars of mortgages to private equity firms.)
We are watching this unfold in real time, as big winners in the financialization of real estate and housing — people like Jared Kushner, Thomas Barrack, and Trump himself — drive an agenda of massive cuts to HUD and VA housing programs while supporting further privatization and corporate development subsidies.
The Report even highlights some of the more bizarre forms of corporate giveaways and corruption that are making news in the U.S. Remember Kushner sister Nicole Meyer in China just last month, offering visas in exchange for investment in Kushner development deals? Here’s the UN Report:
States have continued to focus on attracting capital and wealthy investors with reduced taxes and other benefits. … One such measure, colloquially known as the ‘golden visa’, allows foreign investors to receive permanent residence or even citizenship in exchange for a minimum amount of investment in property.
Ultimately, government must side with communities in bringing them control over their future:
A human rights framework for addressing the financialization of housing must challenge the way in which accountability to the needs of communities and the human rights obligations of Governments has been replaced with accountability to markets and investors.
Or, as Homes for All concluded in its 2014 report: “investment should not only go to, but be controlled by, the communities hardest hit by the housing collapse. If we want this to end well at all, we need to intervene.”
That’s exactly what renters are doing. CarsonWatch is with them, and it’s good to know that the moral authority of the U.N. is, too.