My opinion about “United Nations Human Rights Council’s 2017 Financialization of housing” Oct. 2020

The document is based on the assumption that the right to housing is a human right.

For this right to be assisted there must be mechanisms that allow access to housing and their maintenance, at affordable prices.

It will be necessary to create central regulations that control the level of taxes charged in each region/state in order to minimize the inequalities that cause so much discrepancy in the price that it costs to maintain a house. I refer to taxes on land occupation, taxes on water prices, electricity, sanitation, natural gas and garbage disposal. How do we explain that the value of taxes is so high in California? 

Unfortunately the house prices and the speculation made, is not only due to financial markets and interest rates on loans, but to external constraints, as we have seen recently in October 2020 with climate changes causing wild fires in California. A migration from affected cities like San Francisco to other states is already beginning to occur, which will make the house prices negligible in relation to the current value. 

We are now in 2020, in a pandemic crisis in which the economy has been stalled for several months creating problems that will affect the price of houses, again. So just as we complained that the price was very high in 2017, now the price for example in Manhattan has broken 46% leaving 10,000 apartments for sale. The price of renting an apartment with a bed in San Francisco has dropped more than 20% since a year ago (Zumper data (real estate start-up)).

Here's a graph that shows the evolution on house prices by square meter, in my country (Portugal) since 2008 - Aug. 2020, by INE - Instituto Nacional de Estatística. At the moment we are facing a exponential climb.

The bankruptcy of a huge number of companies during this COVID19 crisis caused mass layoffs which led to the unemployment of a large number of people.

To solve the problem of the right to affordable housing, there must first be access to stable employment. Without employment for all (and I mean all, including emigrants), it is not possible for the government to provide eternal means to satisfy this need, as there will be no way to maintain housing in long term. Let's expect the FED and BCE continue to inject capital for those employment contracts to come back.

The document refers Housing valued as a commodity rather than a human dwelling, and that it is now a means to secure and accumulate wealth rather than a place to live in dignity. – About this, I believe that is possible to maintain both ways. This reasoning does not invalidate that there cannot be, at the same time, a type of affordable housing that can be purchased by anyone in need, according to their financial situation, and that there cannot be adequate taxes for that person to help them over a long period of time to maintain their housing. For this purpose, in the first place, the government must provide affordable housing in certain areas of the city, integrating these neighborhoods with existing ones, as was done in Portugal (called PER projects). The houses of the PER (controlled-cost housing – low cost in construction) belonged to each Municipal Council (City Hall), and people who had financial problems applied to the government to assess their situation. If it were considered that this person would have a low salary, a certain number of children to support, or that he had no job, etc. (these conditions are regulated), he would be a candidate for this type of houses. This housing would have a negligible income paid to the City Hall and after 28 years, if it remained a resident then he would be the owner. This solution if properly regulated and supervised works very well. It goes without saying that these types of houses (these PER projects) could not be sold on the market to anyone. They would only be for people who meet certain conditions mentioned above.

Also in Portugal, the government has implemented a recent regulation for firms: is necessary to declare who is the final beneficiary in order to promote transparency in the purchase of real estate and avoid tax evasion. 

In Portugal we suffer from several problems with taxes, which are not yet well-adjusted. For example, a luxury tax (AIMI) was created for properties over 500k without being investigated, if that property is not, for example, a ruin in which the owner simply does not have the financial capacity to rehabilitate it. Communist parties have a tendency to enforce these ideas, which in reality are tremendously unjust. Another situation is that these ruined buildings are occupied by homeless people. This is happening a lot in Spain. In Portugal, we managed to overcome this dilemma long after April 25, 1974, in which naturally, with the fall of a dictatorship and a still young democracy, there were abuses of power in the domain of private property. We do not want to have these problems of improper occupation again.

I don’t think the government should intervene in private property in expropriating it and alienating it from the owner for minor reasons. I also do not consider the correct procedure to compel the owner to rehabilitate the building when he has no money or interest in doing it. The government should instead, create interest and motivate the owner to carry out construction works, for example access to municipal financing with favorable and extended rates and tax advantages in the payment of property taxes (IMI - municipal land occupation tax) for many years as with the first hotel that President Donald Trump's father rehabilitated in NY city. There must be an incentive for real estate owners to mobilize and there must be supervision. Occupation is not a viable and dignified solution.

On the other hand, the idea that everyone should and can buy a house to live properly may not be valid. Why is renting not encouraged? They would solve two problems. The first would be that those who have money could invest it and be discouraged from making capital gains with flip houses, but rather doing rehabilitation construction works on houses to rent at affordable regulatory prices. The government has great responsibility for this paradigm shift.

To read the “United Nations Human Rights Council’s 2017 Financialization of housing” report, please follow this link:

https://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=21264&LangID=E