Don’t Harm Financial Market
Imagine, living in a home without electricity or floating water, for many people, and even in some countries it is considered as non-existent. Living in a wealthy household where people tend to get angry if the internet is not working for a few minutes or the shower is not offering hot water, the individual itself is not reflecting and valuing the own situation as beneficial.
People tend to want more than they have, which is an ongoing process and affects several different segments of their life. Motivation for more should be seen positive but due to different conditions and chances of success, social inequality is rising.
An interesting question of greater importance is about the limit, when is the society negatively affected by international financial institutions and creditors.
Further which role is or should the government play, an intermediary, ruling and controlling or maybe more towards the passive?
In several different countries, one can identify various approaches to fight inequality, unemployment and homelessness. But could we transfer these approaches on a higher level to operate on an international basis in cooperation with countries around the globe?
Financial markets do have certain regulation in order to create a level of playing field. The fact that the financialization shall be stopped due to the report indicates deeper ruling and specific laws to deny or even prohibit the financial use of the real estate market.
Generally, investors expect the market to be efficient with small time gaps where inefficiency can occur. In my point of view, the state has to guarantee the same rights, human rights, for everyone within the country, but is not responsible to take ongoing action in the financial market.
Some possibilities to avoid hedge cities and to deny vacant residents were mentioned in different UN reports over the years e.g. a tax on luxury properties or a tax on vacant homes. But there is much more the government could control by not directly regulating the whole real estate market.
Tenants could get more rights in case of consumer protection, e.g. harder to fire and stable rent.
In addition, the interest rates are on a minimum level which empowers families to purchase an own property. Keeping in mind the financial crises of 2008, financing the own housing will be accompanied by a risk portion.
Adequate housing as a human right, the rapporteur demands for, which of course is a positive idea but not as easy as it may sounds. Through the financialization, inequality gets settled and people are getting socially excluded.
Actually, agree with the inequality, but I doubt that people are getting excluded. When people cannot afford paying the rent anymore, they must leave, and they will find a new society with a similar level of wealth as soon as they are renting another housing.
However, financial markets are accessible for everyone, therefore each person has the chance of using the financialization to its own advantage. One could argue, the big players are better off while the smaller once have less knowledge and less capital, that might be true, but it is not opposed to the benefit of individuals.
Important, states should not favor the interests of financial institutions and creditors over the needs of the society, the people living in the society.
Both parties must be respected and considered, the main problem will be the fair treatment without one side losing.
In the report, the financialization of housing is presented in a negative way, the author, Leilani Farha, identifies it as the driver to attack human rights and the associated human dwelling.
I think we must consider on the one side all the properties in the hands of funds, creditors, investors, institutions and others, but on the other side the money all those buildings are generating for the state, e.g. due to tax at the purchase and selling time. Most tax gets payed by the people earning the most money.
All in all, achieving housing as a human right is a respectable goal I really like, but the methods used for it should not harm the financial market. States should act as much as needed and as little as possible.
Giving one outlook for the future, I can image the real estate market to decrease in prices being affordable for larger parts of the society.
