Hands Off

Our Homes
The Financialization of
Housing in Europe
Content Introduction

Introduction������������������������������������������������������������������������������������������������������3 Everywhere in Europe, low income families, the unemployed, homeless people, Trav-
What is the financialization of housing?��������������������������������������������������������� 4 ellers, and middle class households have increasing difficulties accessing decent and
affordable housing. Mortgages and real-estate loans, rising rents, energy, and water
The causes of the current situation������������������������������������������������������������������5
prices are the biggest monthly costs for most households.
“Hands Off Our Homes”: A Call to Action������������������������������������������������������� 6
Austerity policies were reinstituted in many countries after the housing crisis of 2008.
Banks, elites, investors and real estate developers have become even richer, while in-
equalities grow.

Foreclosures, forced evictions and homelessness increase through Europe as housing

supply decreases and is privatized by investment funds. On the other hand, luxury apart-
ments and office spaces are built, and stay empty. Housing has turned into a commodity.

The underlying causes of these processes are being uncovered and denounced; capital
accumulation in our cities leading to commodification and the financialization of hous-
ing, to the benefit of the private sector and to the detriment of cities´ inhabitants. Cities
are used to create profit. Human rights to housing and to the city are violated.

In this brochure, we intend to carefully describe and shed a light on financialization of

housing and propose different pathways for housing policy, away from financial specula-
tion and big real estate interests.

We call all European housing movements, also wider society, to raise their voices against
the financialization of our cities and homes. We demand decent and affordable hous-
ing for all.

European Action Coalition for the Right to Housing and to the City

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What is the financialization of housing? Consequences of financialization
Consequences of financialization processes can be recognized everywhere, despite the
The financialization of housing is the complete transformation of housing into a com- wide variety of national context:
modity on the real estate markets, but also on financial ones. This transformation allows
speculation and, at the same time, the reduction of the social function of housing, both ○ almost total or ongoing privatization of public/social housing stock;
as an essential social need and as a fundamental human right. ○ increase of rents on the housing market;
○ more and more empty buildings;
The financialization of housing results from the expansion of neoliberal capitalism and ○ land sold by States and local authorities for private development;
its propensity for commodifying all spheres of life. The neoliberal deregulation and ○ increase of gentrification in neighbourhoods and the related residential
mixture of new laws favours the private sector by appropriating housing and turning it displacements;
into a commodity. ○ touristification of city centres;
○ intensification of the unequal development of “high and low income areas”;
Forms of financialization ○ social segregation in cities;
○ difficult access to affordable and decent housing;
According to local and national experience, the financialization of housing in Europe ○ rising homelessness;
occurs in three fundamental forms: ○ widespread use of mortgages in order to access housing.

➀ Through mortgages (to access home ownership) that end up creating indebted
families. Mortgages are sold as financial products by banks allowing for more
speculation to take place. Further, easier availability of credit pushes up the price The causes of the current situation
of housing.
➁ The direct and speculative investments of financial funds and corporations into
real estate and housing market, which raise rents. High rent prices on the housing Economic crisis of 2008 and austerity policies
market make accessing housing or sustaining current housing more difficult.
➂ Public-private partnerships, which have become a new form of city´ governance Housing, as a profitable investment for capital, became a major target for speculation
where the private sector plays a crucial role in decision-making processes. by banks and real estate companies in the last three to four decades. However, after the
Moreover the scenario seems to be always the same – the public sector carries 2008 global economic crisis, which started with the bursting of the subprime mortgage
all the risks and the private sector gets all the profit. Access to housing, built as bubble in the US, a wave of indebtedness spread across the globe and especially across
result of these partnerships, is limited to certain segments of society and not Europe. Indebtedness, coupled with austerity policies, loss of social revenue and the
those who are most in need. In this way these dwellings eventually pass into the contraction of the European economy, led to more predatory policies by banks and big
speculative logic of the private sector. real estate. They took an opportunity to invest in housing and to gain significant control
over the available housing stock.
Main political actors responsible for financialization
Policies in which mortgages are converted into new financial assets to be sold on the
Those actors responsible for the financialization of housing operate simultaneously at global financial markets were also increased after the crisis. The EU, also national gov-
three different levels: ernments, have not acted upon social necessity; to put in place effective regulations
that protect people from evictions.
➀ Transnational/international actors (the European Union and its institutions,
financial institutions, the International Monetary Fund, the World Bank, the Indebted households had to lose their homes for the sake of profit-seeking predatory
European Central Bank). banks and hedge funds like Blackrock, Blackstone or Altamira.
➁ National States and their institutions.
➂ Cities and/or local councils.

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Privatization Our demands
In certain countries, the privatization of social housing created the scenario in which own- “Housing is a place to live, not a commodity – it is a fundamental right!”
ers cannot bear the service charges for maintenance of common areas and so are threat-
ened with eviction. Additionally, it led people to make a financial commitment through The European Action Coalition, within the framework of its campaign against the fi-
loans and mortgages, which can also end up with the evictions, as the final result. nancialization, defined several demands for all actors involved in 4 main areas: public/
social housing, private investments, high rents, real estate loans and mortgages. We
Housing became a financial asset rather than a social answer for a fundamental human demand:
need.
1. Public/Social housing
The privatization of (public) housing for the benefit of big companies leads to speculation ○ stop the privatization of public/social housing and public land;
and rent increases. Privatization is forcing people from their homes and converting them ○ stop the financing of public/private partnerships;
into financial assets in the hands of big real estate companies and wealthy individuals. This ○ require the maintenance of public/social housing and its construction;
is why, in numerous places, many dwellings are vacant and many people have no housing. ○ support the development of new forms of housing: cooperative and collective
housing, community land trusts, self-constructed housing, mobile living quarters;
○ requisition vacant buildings for social housing;
○ establish public financing of 2 % of the GDP for the construction of new public/
“Hands Off Our Homes”: A Call to Action social housing;
○ integrate 30 % of housing built by private developers into the public/social
housing stock.
Who we are
2. Private investments
The European Action Coalition for the Right to Housing and to the City is a network ○ tax multiple properties and use these taxes for the development of public/social
of different movements, currently 28 in 19 countries, which share the political convic- housing;
tion that housing is an essential social need and that living in an adequate house is a ○ establish an effective taxation system of vacant and unoccupied dwellings;
fundamental human right. ○ stop taxes for owner occupiers with low incomes;
○ stop the sale of land reserves to private real-estate development.
We, the European Action Coalition, want to discuss and to oppose financialization as
a way of treating our homes, andto oppose states reinforcing the position of financial 3. High rents
actors. With our campaign against the financialization of housing we want to create ○ establish and remake the mechanisms of rent regulation, especially for the private
“houses not for profit”. sector;
○ make rents affordable for all tenants;
Thus, our fight is radical because we fight not only against the effects of the housing ○ modify national legislations for greater protection of tenants, in particular in case
crisis, but also against its first causes. We fight against the speculative economy of the of the threat of eviction.
real estate market which led to the financial crisis and all its practices. We draw the
attention to the fact that the economy based on mortgages strengthens a new cycle of 4. Real-estate loans and mortgages
real estate boom and financial bubble today. ○ stop the policies of access to mortgage credit and instead construct public/social
housing;
We have worked together on building a common understanding of financialization in ○ stop evictions and ensure the right to stay in one’s home in the case of defaulting;
all its forms, which has led to this initial text. As we launch our campaign, we are work- ○ cancel or reduce mortgage debt according to the financial situation;
ing on a longer text explaining some of the ways that financialization functions and ○ modify legislations for mortgage loans and make it possible to suspend the
what it means for us and our communities. The demands below are the result of these repayments of loans when a household is in financial difficulties;
discussions. ○ create a fund for support and insurance insecure households.

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Our demands could be summarised as:
○ Stop the state sponsorship of banks and mortgages;
○ Stop the privatization of public and social housing;
○ Support the construction and maintenance of good
quality public and not-for-profit housing;
○ Stop all evictions
○ Control the private rent system for the protection of
tenants’ rights.

There are many ways to get involved –

you could:
○ Let us know about the housing struggles in your city or
neighbourhood – write something for our bulletin.
○ Come and meet groups fighting for housing justice to
learn how they are organising (at a campaign meeting,
or through our exchange program).
○ Get support to set up a group locally.
○ Take action in our coordinated action days.
○ Find out about the other work we do as a coalition.

See:
www.housingnotprofit.org
Fb: @europeancoalition
Twitter: @4HousingandCity
housing@riseup.net