2 March 2017
Thank you for joining me today to highlight a growing phenomenon: the financialization of housing. I have brought this issue to the UN Human Rights Council through my recent report to highlight one of the greatest challenges facing the right to housing to date.
As I mentioned during my presentation yesterday at the Human Rights Council, the housing sector has been transformed by global financial actors and unprecedented amounts of excess capital. It is no longer as we once knew it. Housing has been financialized: valued as a commodity rather than a human dwelling, it has become, for investors, a means to secure and accumulate wealth rather than a place to live in dignity, to raise a family and thrive within a community.
Housing has lost its currency as a human right.
The amount of capital now being invested in housing is staggering:
Residential real estate is valued at $USD 163 trillion or more than twice the world’s total GDP. Imagine if that capacity was harnessed for the realization of the right to housing instead of speculation and profit.
The impact of a commodified housing market is, in fact, devastating:
- informal settlements razed to create space for luxury developments
- communities devoid of human life as houses sit empty – mere vehicles for capital gain
- extreme unaffordability pushing low and moderate income people out of cities
All in the name of investment.
Financialization has robbed housing of its function as a social good. In financialized housing markets, housing is no longer “people-driven”. Decisions about housing — its use, its cost, where it will be built or whether it will be demolished — are made from remote board rooms with little if any consideration of the outcome.
Most alarming is the connection between real estate wealth and the political elite – an exclusive club that leaves the vulnerable powerless to influence decisions or claim their rights.
This is indeed an issue of fundamental human rights and an issue of accountability.
It is important to be clear: states are first and foremost accountable to international human rights obligations – not investment portfolios.. The failure to work within a human rights framework or regulate housing and related investment schemes has brought us to this point.
While regulations and similar measures can mitigate the effects of the financialization of housing, a more fundamental shift is required in order for States to uphold their international human rights obligations. States must change their relationship with the financial sector to insist that markets serve the social function of housing.
Without this shift in both mindset and implementation of housing policy, meeting the targets of the Sustainable Development Goals, and ensuring adequate housing for all by 2030, will not be achievable.
The financial world has essentially operated without any consideration of housing as a human right thus far and States are complicit. Without a course correction, housing will continue to become a prize for the wealthy, and a dream for the majority.