“Dehumanised housing”: In Melbourne,
82,000 properties lie empty. Photograph: georgeclerk/Getty Images
The UN special rapporteur for housing, Leilani Farha, will
highlight the devastating human rights impact of society’s tendency to view
houses as financial commodities rather than homes for people, in her report to
the UN this week.
Farha, who has been UN special rapporteur for housing and human
rights since May 2014, has published a hard-hitting report [pdf],
which she presents to the UN in Geneva on 1 March. It details the shift in
recent years that has seen massive amounts of global capital invested in
housing as a commodity, particularly as security for financial instruments that
are traded on global markets and as a means of accumulating wealth. As a
result, she says, homes are often left empty – even in areas where housing is
“Shops are closing, restaurants are closing,” Farha has told the Guardian, in an exclusive interview.
“You see immediately a loss of vibrancy.”
Farha wants governments around the world to act. She is calling
for them to redefine their relationship with private investors and
international financial institutions, and reform the governance of financial
markets, in order to reclaim housing as a social good, “and thus ensure the
human right to a place to live in security and dignity”. Here are some of the
report’s key findings.
Building homes to lie empty
The report warns about a rise in “dehumanised housing”: housing
built as a high-yield commodity rather than for social use. A significant
portion of investor-owned homes are simply left empty. In Melbourne, Australia,
for example, 82,000 (or one fifth) of investor-owned units are unoccupied. In
prime locations for wealthy foreign investors, such as the affluent boroughs of
Chelsea and Kensington in the city of London, the number of vacant units
increased by 40% between 2013 and 2014.
In such markets, the value of housing is no longer based on its
social use. Properties are equally valuable regardless of whether they are
vacant or occupied, so there is no pressure to ensure properties are lived in.
They are built with the intention of lying empty and accumulating value, while
at the same time, homelessness remains a persistent problem.
The average income of local residents or kinds of housing they
would like to inhabit is of little concern to financial investors, who cater to
the desires of speculative markets. These are likely to replace affordable
housing that is needed locally with luxury housing that sits vacant because
that is how best to turn a profit quickly.
For instance, Kensington & Chelsea is a hotspot for building
luxury housing, and yet the borough also has the fourth highest number of
households in temporary accommodation in UK, as well as the highest rate of out-of-borough placements (meaning when people
become homeless, they are moved to different boroughs entirely).
Fuelling social and racial
Farha’s report says escalating house prices have become key
factors in the increase in wealth inequality. Those who own property in prime
urban locations have become richer, while lower-income households become
poorer. Surveys of ultra-high net-worth individuals show that over 50% have
increased the proportion of their investments allocated to housing. The most
common reasons are in order to sell at a later date and provide a safe return
on investment, thus protecting wealth. The “economics of inequality” may be
explained in large part by the inequalities of wealth generated by housing
The impact of private investment has also contributed to spatial
segregation and inequality within cities, Farha points out. In South Africa,
private investment in cities has sustained many of the discriminatory patterns
of the apartheid area, with wealthier, predominantly white households occupying
areas close to the centre and poorer black South Africans living on the
peripheries. That “spatial mismatch”, relegating poor black households to areas
where employment opportunities are scarce, has entrenched poverty and cemented
Similar patterns of racial displacement from urban centres and
segregation can be found in large cities in the US.
This also creates gender segregation: in Australia, analysis has
shown that average-income single female workers can afford to live in only one
suburb of Melbourne, and cannot afford to live anywhere in Sydney.
Austerity and global finance
Farha’s report calls for action. She wants governments to
provide housing for people affected by economic downturns and unemployment, but
many have been hampered by austerity measures imposed by creditors. As a
result, they have agreed to dramatically reduce or eliminate affordable housing
programmes, privatise social housing and sell off real estate assets to private
The report argues that many governments are too deferential to
unregulated markets and have failed to protect the right to adequate housing.
Tax subsidies for homeownership, tax breaks for investors, and bailouts for
financial institutions have subsidised and encouraged the excessive
financialisation of housing.
Farha concludes that all laws and policies related to
foreclosure, indebtedness and housing should be examined to ensure the right to
adequate housing is paramount, including the obligation to prevent any eviction
resulting in homelessness.