This report makes for depressing reading:
UN report lays bare the waste of treating homes as commodities
A massive shift of global capital investment has left homes empty and people homeless, argues Leilani Farha, UN special rapporteur for housing
The UN special rapporteur for housing, Leilani Farha, will highlight the devastating human rights impact of society’s tendency to view houses as financial commodities rather than homes for people, in her report to the UN this week.
Farha, who has been UN special rapporteur for housing and human rights since May 2014, has published a hard-hitting report[pdf], which she presents to the UN in Geneva on 1 March. It details the shift in recent years that has seen massive amounts of global capital invested in housing as a commodity, particularly as security for financial instruments that are traded on global markets and as a means of accumulating wealth. As a result, she says, homes are often left empty – even in areas where housing is scarce.
A significant portion of investor-owned homes are simply left empty. In Melbourne, Australia, for example, 82,000 (or one fifth) of investor-owned units are unoccupied. In prime locations for wealthy foreign investors, such as the affluent boroughs of Chelsea and Kensington in the city of London, the number of vacant units increased by 40% between 2013 and 2014.
In such markets, the value of housing is no longer based on its social use. Properties are equally valuable regardless of whether they are vacant or occupied, so there is no pressure to ensure properties are lived in. They are built with the intention of lying empty and accumulating value, while at the same time, homelessness remains a persistent problem.
Fuelling social and racial inequality
Farha’s report says escalating house prices have become key factors in the increase in wealth inequality. Those who own property in prime urban locations have become richer, while lower-income households become poorer.
Sound familiar? Below I’m going to reproduce in full (minor date edits) a post from last year:
In June 2015 this “ONE News investigation” caused quite a stir:
‘Ghost houses’ hit Auckland renting market
Ghost houses aren’t haunted, but could prove to be the stuff of nightmares for would-be renters in Auckland’s overheating housing market.
A ONE News investigation has revealed houses across our largest city are being bought and deliberately left empty by investors who refuse to rent them out, instead looking to sell them for huge profits without the hassle of finding tenants in the interim.
Building and Housing Minister Nick Smith doesn’t think the number of ghost houses is rising, and there is no way of knowing how many of Auckland’s 22,000 unoccupied properties are being deliberately left empty [my emphasis].
However census figures show the percentage of unoccupied dwellings in some desirable Auckland suburbs has surged in the past 10 years, with more than one in 10 Takapuna homes empty. …
Rise of the ghost homes – More than 33,000 Auckland dwellings officially classified empty
More than 33,000 Auckland dwellings are officially classified empty as the city grapples with a crisis of affordable housing and homelessness.
Auckland’s 6.6 per cent vacancy rate is higher than either Sydney (5.2 per cent) or Melbourne (4.8 per cent), where there has been an uproar over “ghost houses” deliberately left empty by speculators trading on a soaring market. …
I don’t know whether the methods used to calculate the 2015 figure (22,000 unoccupied properties) and the 2016 figure (33,000 officially classified as empty) are directly comparable, but on the face of it that looks like a 50% increase in one year. At the very least I think it’s safe to say that the problem is getting worse, not better (and that Nick Smith, as usual, is utterly wrong).
Labour’s Housing spokesman Phil Twyford said it was not surprising that the super-rich were happy to leave houses empty when Auckland prices were rising so fast.
“It’s madness, and says a lot about the housing crisis, that we’ve got thousands of homes deliberately left vacant by their owners while in South Auckland there are kids sleeping under bushes.”
He said Labour would crack down on property speculators, starting with a ban on non-resident foreigners buying existing homes.
So, while homeless Auckland families sleep in garages, cars and marae (donate here), tens of thousands of houses are sitting empty. Tens. Of. Thousands. As well as homelessness we have overcrowding and its related health problems; we have people unable to escape cold damp houses; we have rents that are too high; we have desperation further inflating the property bubble. All this in the service of (untaxed) speculative gain.
Behold the awesome efficiency of the market! Tremble at its rational distribution of resources! See that? It’s the invisible hand giving we the people the invisible finger…