Make social regulation of real estate markets an issue at Habitat III!

Habitat for People – Not for Profit!

international working group
for the promotion of market regulation
and market alternatives at Habitat III

OPEN LETTER
To:
Habitat III Secretary General and Preparatory Committee
UN Habitat Executive Director
Responsible national ministers

31st January 2016

Make
social regulation of real estate markets an issue at Habitat III !

Dear Sir/Madam,

Our organisations have been involved in the
Habitat process for a long time and/or are representing people who have been
affected by financial crashes and harmful pro-market policies. Together, we are
fighting for socially grounded regulations of markets that stop the speculation
and treat housing, land and mortgage as goods for people and not for profit. We
are very concerned about fundamental deficits in the current path of the
Habitat III preparations.

Everybody knows about the 2007–08 crashes
resulting from housing bubbles and their context of globalized financial
markets. Hundreds of millions of people in diverse economies have been
impoverished, many millions have lost their homes. In Spain alone, 436,235
evictions took place since 2008. Governments, municipalities, communities,
social organizations and socially orientated housing providers around the world
are still struggling with the consequences.

The private-homeowner and commercial
mortgage-based model of housing provision has totally failed. Nevertheless,
governments continue those policies. In East Asia, the explosive growth of
mortgage lending in real estate sectors and infrastructural financing may lead
to the next collapse. In India, the government promotes the building of 100
“smart cities,” financed by transnational capital at the expense of other
social priorities. In London, council housing will be “redeveloped” in favour
of the financial business. Market-driven megaprojects, land grabbing and
urban renewal projects displace people and destroy communities worldwide.
That’s because private financial capital only invests in the interest of high
returns for its financial stakeholders.

Small homeowners, as well as renters and the
inhabitants of unauthorized housing zones, are left to pay the price. It is
estimated that, today, 330 million households worldwide are financially
overburdened by housing costs. In Italy, more than 250,000 families are
threatened by evictions because of rent arrears. Globally, at least one billion
new homes are needed by 2025. (1) Will they be built through financial markets?
After decades of privatization and deregulations, municipalities today lack the
capacities and non-profit partners to provide adequate housing for all and
regulate the relevant markets (land, rents, mortgage…) in favour of those in
need.

We believe that property must be fairly
distributed and socially regulated to be protected against its perversion
through financialization and that possessing property includes a duty toward
society. We also believe that alternatives to private property, which exist in
many societies (community land trusts and housing, public housing, self-managed
community housing et al), play an important role in meeting habitat needs.
Their development and global strengthening are among the keys to resolving the
housing, land and urbanization crises.

We had expected that Habitat III would provide a
space for reflections on the grave lessons learned from the crisis. Thus, we
took a look into the policy paper frameworks (PPFs) which should prepare the
Habitat III UN conference and its outcome. However, the PPFs are quite silent
on those issues, although the Habitat II Agenda promised that States and their
various spheres of government would pursue just macroeconomic policies toward
its faithful implementation. (2)

We cannot understand that facts about the
financial and housing crisis—with few exceptions (3)—have hardly been
mentioned. We are also disappointed that the local consequences of growing
global inequality; e.g., the extreme redistribution of global wealth into the
hands of very few (4), as well as the consequences of free trade agreements
(such as TISA, CETA, TPP), transnational austerity measurements and
structural-adjustment programs (through international financial institutions or
the European crisis programmes) have not been discussed.

We also miss any systematic debate about the
responsibility of politicians, corporations and banks in these economic
developments. We find nothing on the necessity of remedial policy measures
toward the legal regulation of the financial real estate business and for the
creation of alternatives to markets. Instead, we find a lot of problematic
pro-market approaches in the papers. (5)

We are very worried about the consequences of
these fundamental deficits for the Habitat III outcomes. The exclusion of these
international issues would be an extreme regression in efforts toward global
equality and equity promised in the Habitat II Agenda (1996) and, more
recently, in the 2030 Sustainable Development Agenda. Habitat III could end in
a total betrayal of the principles and commitments already standing in the
Habitat Agenda, as it is replaced by a narrower and inferior “new urban
agenda.” This, we fear, will produce another pretext for economic attacks on
our commons, our livelihoods, our neighbourhoods, our human rights.

Nevertheless, we acknowledge the huge work and
resources already put into the preparations, as well as the ambitious
processes. However, the value of their outputs fall far short of the
investment.

The PPFs list numerous objectives and instruments
for national and local regulations of housing and land markets (6), which we
would like to see seriously discussed. However, just as we do not find a
reflection on the global challenges of financialization, we also do not find a
systematic concept that relates to the necessary implementation of
transnational regulations of related markets. Without a clear commitment of the
global community to human rights—as pledged throughout the Habitat II
Agenda—and to a just and sustainable organization of human spaces and local
practices, the Agenda for the next twenty years cannot overcome the existing,
unjust global frame.

Being aware of the complexity of the debates, we
very much hope that the ensuing Habitat III processes can overcome these
alarming defects and deficits. In order to achieve a positive and credible
result, we believe that Habitat III immediately should set up an additional
policy unit (or a similar group) that focusses on the global financialization
of real estate (7) as a challenge, providing recommendations toward adequate
social and political regulation of the related markets and actors and on
alternatives to “free” housing, land, mortgage markets and to private property
(8).

If such a policy unit were to be established, we
would be willing to share our experiences, proposals and demands with the
conference.

We hope that you will understand our concerns and
that you will facilitate the proper deliberation and input on the mentioned
issues into the further Habitat III process.

Looking forward to your prompt reply,

Sincerely

Habitat International Coalition (HIC), General Secretariat, 12 Tiba
Street, 2nd Floor. Muhandisin, Giza. Egypt Mobile: +20 (0)120 647–0369,
Telefax: +20 (0)2 3748–6379 Email gs hic-net.org; Contact:
Alvaro Puertas, General Secretary, email: hic.general.secretary
hic-net.org

Housing and Land Rights Network– Habitat International Coalition, Geneva,
Switzerland / Giza Egypt Contact: Joseph Schechla, Tel: +20 (0)122 347-5230 Email:
jschechla hlrn.org

International Alliance of Inhabitants c/o Unione Inquilini, via
Bettella, 2/ter 35133 Padova – Italy, info habitants.org

AK Kritische Geografie Frankfurt, Germany

Association des Comités de Défense des Locataires (ACDL), Paris, France;
ACDL, Centre Social CERISE, 46 rue Montorgueil , 75002 Paris, France;
contact person: Benoit Filippi , +33686002840, ben.filippi
wanadoo.fr

Dublin Tenants Association, Patrick Bresnihan, 195C North Circular Rd,
Dublin 7 bresnip tcd.ie

Forum Umwelt und Entwicklung, Marienstr. 19-20, 10117 Berlin, Tel
0049.30678177588, Contact: Jürgen Maier, chef forumue.de

HABITA – Associçaõ pelo Direito à Habitação e à Cidade, Lisbon, Portugal, Contact:
Rita Silva, habita.colectivo gmail.com

Habitat Netz. e.V. c/o MieterInnenverein Witten, Schillerstr,
13, D.58452 Witten, Tel 0049.2302-51793 / Fax -27320; Contact: Knut
Unger, knut.unger habitat-netz.de

Montfort Social Institute, India, Montfort Nagar,Uppal Hyderabad – 500 039,
msihyd2009 gmail.com

Plataforma de Afectados por la Hipoteca (PAH), Spain; Contact person: Carlos
Macias, lapahdebarcelona gmail.com

TAIWAN Alliance of Anti-Forced Eviction, Add: No. 22, Lane 61,
Tianxiang Rd, Zhongshan District, Taipei City, Taiwan 104, Tel: +886 2-2596
9525, Contact: Hui-yu Huang, rightstohousing gmail.com

USA Canada Alliance of Inhabitants, Robert Robinson-Coordinator PO
Box 762, New York NY 10272 email: rob.robinson423 gmail.com, phone:
+01 212-252-1710

additional supporters (after
Jan. 31st):

Observatori DESC, C. Casp, 43, baixos, 08010 Barcelona, Spain

Mieterforum Ruhr (Ruhr Tenants Forum),Bochum, Germany



Footnotes:

(1) Policy Paper Framework (PPF) 10, 1.3.
https://www.habitat3.org/the-new-urban-agenda/policy.

(2) Habitat II Agenda, paras. 40(a), 62, 65, 67(b), 115,
186(d), 189(b) and 201(b).

(3) PPF 10 “Housing Policies” under point 1.3. summarizes some
of the consequences, but without discussing political measurements. PPF 5
mentions “macroecenomic policies” without precision. PPF 6.1 mentions
“financialization” as part of a controversial “scenario.”

The long version of the draft of the UNECE report for Habitat
III includes an important and useful collection of facts related to the
financial crisis and housing, which has not been reflected in the PUs: 
http://www.unece.org/housing/committee76thsession.html#/.

Independently from Habitat III, since 2008, the UN special
rapporteurs on the right to housing made important reports on the consequences
of financialisation and its crisis on housing rights. We hope these reports to
the General Assembly will not be neglected in Habitat III:

http://www.ohchr.org/EN/Issues/Housing/Pages/AnnualReports.aspx.

(4) e.g. PPF 2.1 mentions “increasing disparities between rich
and poor” as a challenge.

(5) e.g. PPF 5 demands better access of municipalities to
private capital markets, combined with a “robust” framework for managing the
resulting debt. PPF 7, .2 focuses on the “enabling” of markets and private
investments through “balanced liberalization.” PPF 8 proposes market oriented
solutions for environment problems.

(6) Many important proposals for local and national market
regulation are listed in PPF 1 “right to the city”; for our purpose see
especially 1.3. However, rental housing, rent control, etc. is also missing
here. PPF 2 .2 mentions regulations of multinationals, but does not explain any
detail. PPF 3 addresses the need of “National Urban Policies,” but does not
mention the financial investors as a factor. PPF 4 on “governance” does not
speak about transnational governance of markets. PPF 7 sees regulation as an
“enabling market” approach, but also supports public infrastructure (which does
not include housing).

(7) By financialization of real estate, we understand the
domination of the production, letting, trading, financing, maintenance and
management of housing and other buildings, built infrastructure, mortgage and
land ownership according to the logic of financial product creation (bonds,
etc.) for institutional and rich private customers in transnational markets.
Through financialization commons and basic goods transform into financial
assets for global trade.

(8) While alternatives to freehold land titling are mentioned
in a couple of papers (PPF 6, PPF 10), it is astonishing that the important
role of rental housing is only mentioned in PPF 10: 1.2 billion people
are renting worldwide.

* Download the open letter.

Civil Society Messages to the 9th Africities Summit

Civil Society Messages to the 9th Africities Summit

A self-organized civil-society initiative hosted 45 civil organization representatives this week at Kisumu, Kenya on 15–16 May to deliberate and consolidate messages to the Africities9 Summit. The Civil Society Forum [...]