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#regulateProperty: The Need for Human Rights-driven Real Estate Regulation and Market Alternatives

Since the beginning of the year the “International Working Group for the Promotion of Market Regulation and Market Alternatives at Habitat III” has tried to advocate for an inclusion of socially grounded regulations of markets that stop the speculation and treat housing, land and mortgage as goods for people and not for profit. This article tries to sum up some of the findings of these debates.

This article partly may not expresses much more than my personal opinion. However, I understand it as a collective product.

A part of the expressed ideas probably are influenced by German housing policy debates. This must not be bad, as Germany has a comparably developed set of regulations of private housing markets, – which of course are not satisfying,  Some of the ideas also had been  articulated in the context of the formation of the “European Action Coalition for the Right to Housing and to the City”. I feel it as a pity that this group did not continue to develop precise demands for advovacy and action at EU level.

Essentially howver,  this is a product of the “International Working Group for the Promotion of Market Regulation and Market Alternatives at Habitat III”. I thank all comrades who have contributed to the debates. They are still in a very early stage.

Very inspiring for the expressed regulation demands have been exchanges with activists of the Spanish Plataforma de Afectados por la Hipoteca (PAH) and with Benoit Fillippi  from the Association des Comités de Défense des Locataires (ACDL), Paris. Giselle Tanaka, a researcher and activist from Brazil, i addition brought in the need to focus on the role of mega events (like Olympics) and mega projects for the fincialization of cities. Friends from Istanbul reminded us that market orientation of course is not the only enemy of just spaces. We also must understand the extremely important role of authoritarian political regimes and analyze its relations to financial globalization and fincialization machanisms, – a task we have not been able to cover so far.

Special thanks also to Josepf Schechla and Joana Ricart from the Housing and Land Rights Network (HLRN) in Egypt, who especially added references to the Human Rights framework  and improved many of the phrases in the following text. In fact they must be considered as co-authors.

The intention of the short text is to give a first sketch or impression on the complexity and richness of the work we had to do.  The text still may seem to be  too eurocentric. But it is only a small fragment for a needed debate, a first step.

I believe that we need a process of social movements and organizations, human right advocats, crtical researchers and progressive policy makers beyond Habitat III that will not ignore the political-economical frames of spatial development and that will dare to address the necessary regulatory instruments for the realization of the right to housing and sustainable human settlements. I hope the following ideas can serve as a little contribution  to the needed broad process of developing a necessary  “global Agenda from below” for the realization of the right to housing through market regulation.

WE NEED A SHIFT IN THE GOVERNANCE OF SPACE

In order to achieve the full realization of the human right of everybody to a secure place to live in peace and dignity while respecting the rights of nature we need effective and adequate market regulations and market alternatives in all countries and at all scales. This especially implies the adoptation of the following transformative tasks:

  1. Human right obligations must be translated into concrete & enforceable rights to affordable housing, land, water, sanitation, health, food, transport, education and all other necessary local services.
  2. Human rights driven, effective and democratic social control of property and land use must be implemented in all countries.
  3. In the same context alternatives to market regimes over land and housing must be strengthened at a large scale.
  4. The policy dominance of private interests and the authoritarian governance of our spaces and livelihoods must be defeated.

“NEW URBAN AGENDA° FAILS TO BE THE NEEDED ROAD MAP

The so-called “New Urban Agenda” (NUA) has not become the needed global road map for human rights-based, socially inclusive and ecologically sustainable local and spatial development. It’s 175 paragraphs include important aims of urban management.[i] However, those abstract “commitments” hardly will bring the needed improvement to the human settlements. In spite of demands [ii] and the obvious necessity, the fundamental economic and political conditions of spatial development and its crisis remain systematically excluded from the global Habitat discourse. As long as states do not agree on an agenda that translates human rights obligations into enforceable legal rights of all inhabitants and into effective instruments for social market regulation and market alternatives, no sustainable progress will be achieved.

As states are not agreeing on concrete measurements of this needed progress, it is also not surprising that they do not set up clear quantitative targets [iv].  The “New Urban Agenda” fails to be the promised translation of the Sustainable Development Goals (SDGs) into local practices.

Humanity shares more goals related to spaces than the NUA expresses. These goals could be translated into concrete achievable targets if the authorities would agree on the implementation of transformative principles and effective instruments. To acheive that is a long but indispensible struggle.

Focusing on adequate housing, I will list some of the needed measurements below.

THE NEED FOR A RECOVERY OF SOCIAL GOVERNANCE OVER REAL ESTATE MARKETS

In Habitat II, States committed to maintain just macroeconomic policies[v] and to adopt innovative instruments that capture gains in land value and recover public investments. [vi] These commitments echo the principles enshrined also in the Vancouver Plan of Action (1976).[vii] States have not only failed to implement these reforms, they have done the sopposite. They did not renew a regulatory frame work for the global economy, but slipped into the chaos of more and more unhedged global market competition.

Through massive privatizations of public industries and social goods, through deregulations of markets, subsidies, infrastructures, tax reductions and social budget cuts most states redistributed the global wealth and income into a gigantic private accumulation of capital. Seeking for profitable investment opportunities this uncontrolled capital globally targets land, infrastructures and services, energy supply, urban development and housing. The progressing liberalization of the global capital markets as well as digitalization and the development of new global divisions of labor accelerated the transformation of a world of industries producing goods into a world of industries producing financial assets. The 2007/2008 crash was the result of a transnationally organized speculative bubble of housing assets and mortgage.

National and transnational policies that aim to reduce the economic costs, as well as the social and ecological damage caused by this process, must seek ways to get back governance over the markets. Among the instruments for the needed global market regulations are strict economic policies like closing tax heavens, taxation of international financial transactions, regulation of banks, non-listed funds and of securitizations.

The direct regulation of real estate is a necessary corresponding strategy. In difference to regulations that try to capture the runny capital flow, real estate regulations can approach the problem at the ground: the immobile piece of land and building, its users and neighbors. Here, social regulation can become practical every day. If they regain control on land, buildings and housing, public authorities and communities can recover the resources to satisfy social needs and at the same time reduce crisis risks.

THE NEED FOR SYSTEMATIC MARKET REGULATION AND MARKET ALTERNATIVES

All public policies that directly or indirectly affect housing must be directed by the aim of realizing the human right to adequate housing for all. In this perspective housing is a good for social needs, a use value, and not an asset for private income, trade, accumulation and speculation. Social housing needs never can be met by private markets alone. It is a public task and duty to care for conditions that guarantee secure, affordable and decent housing for all persons, families and communities. These conditions can be different around the world. But everywhere the power of private property owners and lending institutions must be regulated and hedged by social and public means.

People with low and medium income in all countries, territories and cities need government policies and social structures of housing provision that do not pursue profit maximization, but which are directly dedicated to a social purpose. Therefore, the ongoing commodification of commons, the privatizations of public and social housing, of publicly regulated housing finance, urban planning and development must be stopped and reversed.

Small home owners by laws and regulations must be protected against over-indebtedness and foreclosures, which jeopardize adequate housing conditions. Everywhere the provision of a satisfying quantity of affordable housing for those who cannot afford buying land and construction must be organized by effective public interventions into the markets or by nonmarket measurements. In all countries, this means that there must be a satisfying portion of socially controlled rental housing or of housing which is self-managed by the inhabitants outside of the capitalist property market.

TOWARD ENFORCEABLE CLAIM-RIGHTS TO ADEQUATE HOUSING

The human right to adequate housing is of central importance for the enjoyment of all economic, social and cultural rights and it is recognized in legally binding international Human Rights Law and frequently reaffirmed by the international community. Housing adequacy covers numerous integrates elements, including legal security of tenure; enjoyment of public and environmental services such as adequate water, sanitation, energy and all basic utilities; habitability; affordability; adequate location; accessibility and cultural appropriateness.[viii]

States already have the human right obligation to achieve progressively the full realization of the right to adequate housing to the maximum of their available resources. However, such principal state aims will only be achieved if individuals and communities within the domestic legal systems enjoy positive claim-rights to housing that are enforceable at courts and in local practice. The enforceable claim-right implies the implementation of concrete policies that empower public institutions to meet these claims by public investments and effective support for self-help as well as to uphold them in relation to real estate and financial markets. The enforceable right to housing also requires policies of empowerment of the poor, the excluded and those in housing needs, in order to support their capacity for legal claims and for the enforcement of local solutions.

THE RIGHT TO STAY PUT AND THE SECURITY OF TENURE
Predatory lending, economic crisis and impoverishment, middle class oriented urban transformations, gentrification and urban cleansing, housing privatizations, condo-conversions and rent increase during the past decades have caused a heavy rise and intensification of forced evictions in many countries This horrible mega trend has to be stopped. Forced eviction is a “gross violation of human rights, in particular the human right to adequate housing” and subject to prosecution of perpetrators and reparation for victims. By definition, forced eviction is both arbitrary and a crime. Through national legislation and transnational agreements it is necessary to implement a ban on forced evictions consistent with the provisions of General Comment No. 7 of the UN Committee on Economic, Social and Cultural Rights.

At the same time forced evictions are only the ”tip of an iceberg“ of insecure housing. Everywhere inhabitants – especially renters, mortgaged home owners, not authorized dwellers and precarious users -are not enough protected against legal and extra-legal pressures to leave their homes. Expressing outrage and indignation at extreme forms of evictions is not enough. We need to proceed from a defensive approach to the right to remain (i.e. to stay put), which requires a principal of strengthening of security of tenancy and tenure in its diverse forms in all countries. In private and public rental housing open-ended leases in combination with adequate rent regulation and maintenance obligations of the landlord should be the legal standard. Housing privatizations and condo-conversions should not be allowed or at least not lead to eviction rights of the owner.

The increase of housing costs and gentrification can be reduced by effective instruments of rent control, taxation of real estate transactions, strict control of speculation, public or communitarian preemption rights and satisfying amounts of social and public housing provision. Precarious housing forms which bypass legislation (like “anti-squat”) should not be allowed. Housing costs must be limited, they should not lead to impoverishment and insecurity.

Especially in cases of mortgage default owner-occupied houses of adequate sizes should be legally protected against evictions and -if necessary – transformed into affordable social rental housing for the affected inhabitants. Public officials and private parries that cause an eviction should be held accountable and provide full reparations as defined in international norms.[ix] Larger landlords should be obliged to offer an equitable home in case of an eviction. Small landlords sometimes may need public support for adequate reparation. Local authorities should have the right to order a stop of eviction or confiscate a home for those in need. Authorities are obliged to legalize occupations of building and land for human needs in a way that insures equitable secure tenure rights for all occupiers. State should acknowledge and apply proactive procedures to prioritize the vulnerable and disadvantaged groups of people who are affected by all forms of displacement and discrimination.

THE NEED FOR SOCIALLY CONTROLLED RENTAL HOUSING

The provision of rental housing as a safe, stable and affordable option of tenure is a necessary element of social housing policy in most of the countries and territories. This element includes the protection and rights of tenants in privately owned housing as well as the provision of social rental housing, which is not oriented on financial returns, asset accumulation and income generation but directly serves social housing needs.

All states should guarantee the organization of a non-for-profit segment of accessible, affordable social rental housing of good quality, which is well managed and democratically controlled and whose qualities, locations and quantities satisfy the existing and developing local housing needs. In order to achieve this goal all states must strengthen, rebuild or newly create democratic non-for-profit structures which have the capacity to construct, maintain, renovate and facilitate this non-profit social housing stock. Public subsidies as well as the provision of land for constructions must support and privilege non-for-profit housing solutions for those in need. Public subsidies for new constructions, as well as for renovations should lead to binding, lasting and publicly controlled social commitments of the beneficiaries and their property. They can be organized in various ways according to national rules and local situations.

Instruments for the support of social housing must include rules for urban planning and land sales, which oblige all investors to use the land or a certain portion of it for needed non-profit rental housing and other forms of regulated and needed social infrastructure. By such instruments, municipalities can avoid that limited resources get wasted and that urban investments lead to gentrification, ghettoization and expulsion.

Rent control must be implemented for all tenants, for new rental agreements, as well as for sitting tenants.

THE NEED FOR SOCIALLY CONTROLLED HOUSING FINANCE AND MORTGAGE STANDARDS

The direct trigger of the international financial crashes since 2007 had been the international securitization of predatory housing loans that transformed mortgage into opaque financial assets. In order to prevent similar events and provide adequate finance for housing it is necessary to regulate mortgage through national law and international agreements at three levels: (1) Consumers must be effectively protected against predatory lending practices. (2) International rules must prevent opaque securitzations and other speculative investments. (3) In cases of mortgage default and foreclosure private insolvency measurements must allow the affected to avoid lifelong indebtness and protect their housing rights. Generally, housing finance should not be dominated by private banks and investors, but by public or publicly controlled mortgage systems at national levels, which should be supported by international financial institutions. Publicly controlled funds for “ethical” housing investments are an additional option..

THE NEED FOR EFFECTIVE TAXATION AND REGULATION OF REAL ESTATE TRANSACTIONS

In all countries, we need effective taxation of real estate transactions to reduce gentrification and speculation, and to generate revenue for public-housing support. Vacant buildings should be subject to special tax and penalty. Public requisition of empty buildings and squats should be considered as legitimate for meeting social needs. In large scale transactions the affected communities and public entities should have pre-emption rights for costs below the market prize.

THE NEED FOR SOCIAL REGULARIZATIONS OF “UNAUTHORIZED” SETTLEMENTS

In many countries we need new policies providing social and collective (not only private-property-based) solutions for the regularisation of “unauthorized,” “spontaneous” neighbourhoods. Tenants in “informal” neighbourhoods and in the regularization processes must be respected as citizens with equal human rights, not least the human right to adequate housing.

THE NEED TO STOP MEGA PROJECTS AND MEGA EVENTS

In the name of economic growth, mega-events and mega-projects have been presented as a solution to development in all kinds of human spaces. In reality, urban mega projects and events trigger land speculation and lead to increasing costs of housing and everyday life. Often they destroy or push away existing local economies, cultures, heritage and nature. They are a major cause for the mass displacements of inhabitants, traditional workspaces and shops. The “New Urban Agenda” is totally silent about this well-known phenomenon, which accelerates urban inequalities and private control over the territory.

Mega-events like Olympics are being used to impose private corporate interests and to run over local regulations and democratic institutions. Mega-projects are sold as a way to attract private funding, but they always come with the need of massive public resources, resources that are taken from social priorities to promote private gains, and in general do not revert to social benefits. They promote forced evictions, reinforce spatial segregation and restrain access to land by the poor.

Public and private investments into human spaces must be regulated by democratic institutions that assure social principles like security of tenure, prioritization of public land for social housing and equal distribution/access to land. Public resources must be prioritized for social infrastructure and for social needs, and not for private profits.
Mega events and mega projects often are too big to control democratically. In most cases they are against people and planet. They must be stopped.

THE NEED FOR SATISFYING PUBLIC BUDGETS

There will be no solution to the housing and urban crisis as long as the dogma of austerity rules policies at all levels. We need massive public funding in order to overcome housing shortage. Mindful that popular housing solutions, by actual number of units, far outstrip both private and public sector production combined, we urge the recognition of “state-supported social production.”

THE NEED FOR PEACE

The states gathered at Habitat III so far have failed to seize an opportunity to correct the global double standard that permits—and even encourages—the gravest crimes of extreme forced evictions, population transfer and colonization to continue. These persist with impunity in occupied territories, despite their criminalization and emblematic prosecution at the end of World War II. That reliable model is now even practices by nonstate actors, as exemplified in numerous conflict situations where human habitats are undergoing destruction and about which the current agenda effectively remains silent. This can be remedied only by an urgent shift to states’ foreign policies and extraterritorial conduct consistent with international law and human rights, an obvious need that this draft agenda, like the 2030 Sustainable Development Agenda, evades.

THE NEED AND RIGHT TO ORGANIZE

Essential for the achievement of habitat rights is the respect to the rights of all inhabitants, to express, organize, strike and collectively bargain and negotiate in order to achieve collective solutions. Authorities must recognize squatting, rent strikes and other forms of peaceful protest and self-help as elements of rights-based spatial development. This approach does not question, but underlines and supports both the authority and obligation of constitutional states to prevent and remedy all violations of the human right to housing.


Endnotes:

[i] A list of general phrases in the NUA which we can relate to is in preparation. “Relate to” means: Each of them needs additional ways and structures of implementation. Also see: Statement on the “Zero Draft of the New Urban Agenda”

[ii] See the open letter: “Make social regulation of real estate markets an issue at Habitat III !” and the other statements of the group at http://www.reclaiming-spaces.org/tag/habitat-iii/

[iii] The necessity is so obvious because of recent experiences with real estate and financial bubbles and crashes. [iv] Nowhere in the draft can one read statements in the style of the Sustainable Development Goals like “until 2025 reduce homelessness by 50%,” or “30% of new housing constructions should be social housing for people in need.”

[v] See Istanbul Declaration on Human Settlements [Istanbul Declaration] and The Habitat Agenda, A/CONF.165/14, 14 June 1996, at: http://ww2.unhabitat.org/declarations/habitat_agenda.asp, paras. 40(a), 62, 65, 67(b) 115, 186(d), 189(b) and 201(b).

[vi] The Habitat Agenda, op. cit., para. 76(h).

[vii] See Recommendation A.2 Human settlements and development (c)(v) and Recommendation D.3 Recapturing plus value.

[viii] This is to take place within a context of an adequate standard of living, as well as the realization of a bundle of other civic, cultural, economic, political and social human rights, including but not limited to, effective participation, information, decent work, social security, access to justice, and freedoms of expression and association. UN Committee on Economic, Social and Cultural Rights, General Comment No. 4: “the right to housing” (art. 11 (1) of the Covenant), para. 8, at: http://tbinternet.ohchr.org/_layouts/treatybodyexternal/Download.aspx?symbolno=INT%2fCESCR%2fGEC%2f4759&Lang=en.

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