Monday, February 13, 2017

The Housing Crisis

Today, the majority of poor renting families in America spend more than half of their income on housing, and at least one in four dedicates more than 70% to paying the rent and keeping the lights on. Families have watched their incomes stagnate, or even fall, while their housing costs have soared. Median rent has increased by more than 70% since 1995. Meanwhile, only one in four families who qualify for housing assistance receive it, and in the nation’s biggest cities the waiting list for public housing is not counted in years but decades. The typical poor American family does not live in public housing but receives no government assistance whatsoever.

It is estimated that millions of Americans are evicted every year because they can’t make rent. In Milwaukee, Wisconsin, a city of fewer than 105,000 renter households, landlords evict roughly 16,000 adults and children each year. That’s 16 families evicted through the court system daily. New York City sees 60 marshal evictions a day. The most recent version of the American Housing Survey asked people: “Do you think you’ll be evicted soon?” Renters in more than 2.8m homes said yes.

In the United Kingdom, the cost of an average house requires 10 years of the average British salary; the average London house requires double that. Rents in Delhi’s business district now rival those in midtown Manhattan. Between 2008 and 2014, housing prices in São Paulo increased by more than 200%.

Over the past several decades, millions of people have migrated to cities from rural villages and towns. In 1960, roughly a third of the planet lived in urban areas; today, more than half does. The growth of cities has also been accompanied by an astonishing surge in land values and housing costs, especially in “superstar cities” whose real-estate markets have experienced an influx of global capital. Roughly 330m urban households worldwide live in substandard or unaffordable housing demanding more than 30% of their income. By 2025, based on migration trends and global income projections, that number is expected to climb to 440m households, representing 1.6 billion people. The world is becoming urbanised, and cities are becoming unaffordable to millions everywhere.

Because housing is produced for profit there is no possibility of a rational approach to housing within capitalism. There is no good reason why sufficient homes should not be built. The root cause of the housing problem in big cities is the capitalist system under which housing accommodation is bought and sold. Overcrowding, high rents, homelessness intimidation and the other ills from which many workers suffer are a direct result of the fact that demand for accommodation exceeds the supply. The "Catch 22" in capitalism is that if a million homes were built they could not be sold. We know they could be built. The materials exist, the only thing the homeless are short of is cash or credit. The housing crisis is a messy combination of high demand for homes from people, a shortage of new houses being built, and an insufficient amount of affordable or social housing. This wide gap between what’s needed and what’s available shows that the housing market doesn’t work. Houses are built to make money for developers and landowners, not because people need them. Developers aim to maximise their profits by building the kind of housing which is likely to bring in the best returns. This will tend to be houses for private sale. Social housing managed by councils and housing associations is a less attractive investment. As a result, the few homes which are being built will only be affordable to a few people. Any changes to legislation or reallocation of public funds only last as long as they’re financially viable. Tinkering with the system hasn’t made it work in the interests of the vast majority. So, the economic and political system itself needs to be changed. We need to go from a society where land and resources are owned by a tiny minority to one where they are owned by everyone in common. Houses would be built, goods would be produced and services would be run directly because people need and want them. The financial market would no longer be there, rationing and restricting who gets what. Work would be co-operative and voluntary

As Engels pointed out as long ago as 1872:
‘As long as the capitalist mode of production continues to exist, it is folly to hope for an isolated solution of the housing question or of any other social question affecting the fate of the workers. The solution lies in the abolition of the capitalist mode of production and the appropriation of all the means of life and labour by the working class itself’ (The Housing Question).