Essay on financialization of housing PDF

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Essay on financialization of housing - Delivered by Sir Robert Shiller (Financial Markets - Coursera)...

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Essay on financialization of housing Le Tien – University of Economics Ho Chi Minh City - UEH

Material: - Financialization of housing and the right to adequate housing A/HRC/34/51-2017 HRC 34th session. - Statement to the HRC (Special Rapporteur: Leilani Farha). Not until the 2008 financial crisis that governments starting to realize the negative effects of the of process financialization of housing. The subject of this topic has become one of the upmost urgent issue that governments should take into account, to regulate and mitigate the impact on violation the right to adequate housing. On March 1, 2017, on the right side of adequate housing, Special Rapporteur Leilani Farha, published a report on the financialization of housing. The rapporteur frankly discussed and approached the issue in different viewpoints: human rights, the housing markets, … Afterwards, suggesting remedies and strategies to regulate the financial system and mitigate the effect of the issue. As being cited in the report, the human right to adequate housing has been violated. This is because of the enormous capital flows from banks, private equity firms, hedge funds, … which turn housing from a place to live for people, to a commodity for speculation and accumulation wealth for rich people. This means, housing has been financialized. These financial institutions and private investors have dehumanized housing: In Melbourne, Australia, 82,000 or 20% of investor-owned units are left unused, or in Kensington – London and some prime areas of Chelsea – ideal locations for affluent foreign investors, the number of vacant units increased by 40% between 2013 and 2014. This is a dangerous figure. This means, in such markets, housing is no longer based on its social use: A place to live in dignity and security. Homes sit empty while homeless populations burgeon. Additionally, the financialization of housing has also contributed to the rapid growing of homelessness, unemployment, foreclosures and discrimination in the population between countries, especially in wealthy areas such as central cities. This is one of the destructive effects of excess global capital on the financialization of housing. These capital flows are enormous: Cushman and Wakefield, an American global real estate services firm engaging in $90 billion

worth of sale asses per year, in 2015, the total sale was a record of $443 billion, with residential properties representing the largest single proportion. This has made housing and urban real estate become the commodity of choice for financial institutions, a “safety deposit box” for the wealthy. As a consequence, people with low-income, or even with medium-income now can’t even purchase a home for their life in the urban area. Such vast amount of increased assets accumulated for the wealthy as a speculative means burgeons home prices, making housing unaffordable for most households not already invested in the market. This trend is not only occurs in developed countries like the US or Canada, … Such dominant impact of private investment and speculation also appears in emerging countries and poverty countries and areas. Take South Africa for example, the negative influence of private investment in the urban areas of cities has sustained the discriminatory patterns of the rural areas, with wealthier households occupying areas close to the center and poorer South Africans living on the peripheries of cities. This also affect the culture terms, where rich people could easily hire cheap black African with no insurance or labor guarantee, increasing even more homelessness, discrimination and poverty in such locations. Moreover, financialization in housing also creates gender segregation. In Vietnam, reports show that average-income single female workers can only live in a medium-quality apartment in Ho Chi Minh city after 20 years of working and saving, compare to 10 years of that in men. All in all, I think that it is obvious that human rights must be protected. And hence, effort on various fronts needs to be taken into action by governments and regulators. Some of that could be lending practices, asset quality check, taming excessive speculation in housing market, … and above of all, housing should be considered as a place to live in dignity and security, not just a commodity for trading or speculation, or even worse: A “safety deposit box” for the wealthy....