Housing is human shelter: but Wall Street doesn’t agree

By Richard Mellor in California

Here we go again with the housing market. What is housing? It’s human shelter; that’s what it is to millions of people. There are also millions who have no shelter even when houses, sit empty. And there are millions more who can’t afford the cost of it.

Human shelter, like all crucial social needs, is a business in our society, and if you can’t buy it, profits cannot be made from it; then you do without.People go to extreme measures to be able to buy a home. They put off having children, they work maybe two, sometimes three jobs, all so they can borrow money from the moneylender and pay maybe two or three times over for the home, after interest payments. If they’re lucky, they may own it after 30 years or so.

The whole system is set up to function this way; a whole section of social parasites will get rich through it. It is a disgusting and without doubt, a most barbaric way for society to house its citizens.  But it’s not about housing people is it? It’s about a few people getting very rich off of what should be a right: human shelter.

Homes were ‘stolen’ not ‘lost’

After the crash in 2008, when some five million people had their homes stolen from them by the moneylenders (people didn’t “lose” them), huge capital management companies, and private equity firms like Blackrock, got in to the business of purchasing single family homes. These firms are among the largest landlords in the country and usually prefer their victims in one place, like an apartment complex, but the rewards were too great and investors made a killing.

The housing market is ablaze once again, and big institutional investors are now buying up entire subdivisions from home manufacturers. These firms and their investors have accumulated billions, as the US working class and poor have seen their living standards decline. Never being ones for actually ‘earning’ money through hard work, the investors need to find a lucrative home for their profits.

By “selling entire neighbourhoods to investors.”  the Wall Street Journal reported this week (April 5, 2021), “The country’s most prolific homebuilder booked about twice what it typically makes selling to the middle class…” (In the US, the mass media and the trade union hierarchy refer to workers as ‘middle class’. There are no workers here, just rich, poor and middle class).

Financiers and coupon-clippers

Reading serious big business outlets like the Wall Street Journal gives working people a glimpse into the world of the big capitalists, the hedge fund managers, financiers and other coupon-clippers who get rich off those that work for a living. “…yield chasing investors are snapping up single family houses to rent out or flip.” (my added emphasis), the Journal article states, as if this is some sort of respectable activity.

For the uninitiated, the full term is “house flipping.” It is one of the most disgusting terms, and it sickens me when I see it written and think of the sacrifices working people make to own a home and the tragedy of homelessness. In my town, a closet costs $1,000 a month; I feel sorry for young people. We should all be very angry at this crowd and the politicians and their two parties that allow it.

When you hear the term, lobbying, in regard to politics, what it describes is people like those who get rich off your need for a home, taking some of the money they rip from you, and giving it to legislators to make laws that keep the ball rolling.

How can a family compete with speculators?

One head of a real estate consulting firm tells the Journal that in many of the major housing markets in the nation, “…about one in every five homes sold is bought by someone who never moves in.”. Not only that, even with very low interest rates, how can an individual or a single family compete in this market with an organised gang of housing speculators?

In Houston, Texas, for example, 24% of homes purchased are bought by investors and the same head of the consulting firm admits that these developments will, “…make US housing permanently more expensive.”, and that means more insecurity, more stress to gather the required capital and pay the moneylenders their interest. The consequences of this existence are domestic violence, drug and alcohol addiction, family fragmentation and in worst cases, total breakdown and the violence associated with that.

So as the “yield chasing investors” salivate at the chance of making money without working, the consulting firm warns that the “institutionalization of real estate investors has set the stage for another speculative, investor driven home price bubble.” It’s not like they don’t know what their activity leads to, but they don’t suffer in the way millions of working-class and middle-class people do, and like the fox in the henhouse, can’t stop the killing; they are driven mad themselves by the laws of the system.

“as long as the music is playing, you’ve got to dance…”

The consulting firm assures the investors that “The bubble has room to grow before it bursts…”. Home prices rose 11% in 2020 and are expected to rise 12% this year, so the danger is there, but as one of their own, Chuck Prince , the former CEO of Citigroup pointed out, “….as long as the music is playing, you’ve got to get up and dance.” Prince is right about that from the capitalist’s point of view, but what we have to do is stop the music.

They know the consequences of this for millions of people but because most of them won’t experience it themselves, it’s easier for them to put it aside. Anyway, what can they do? It’s a matter of life and death for them, and there is no alternative. “We are capitalists”, as Nancy Pelosi, one of the most powerful Wall Street politicians in the US, told one naïve youth in 2019. That’s just the way it is. 

There is an alternative though. How can there not be? Society has the resources; labour power, capital, and all the skills necessary to provide everyone with decent living conditions. No one need be homeless; no one should be without the best healthcare society has to offer. The problem is a political one. Housing is a private venture and in order for capital to be allocated and the resources cobbled together from architects and planners to skilled workers and designers, the process must yield profits.

Housing is not produced to fulfil a social need, but for profit

If housing doesn’t provide the required profits, the owners of capital will find somewhere else to put it. They do not produce for social need, they produce for personal enrichment; we all know that really and we will never fully resolve this or any other market driven problems until the wealth of society that is a collective product, is collectively owned and collectively allocated in a rationally planned way.

I certainly don’t have all the answers in the immediate. I am sure that there are many people, activists in housing struggles that have ideas about how we can make some changes within the framework of capitalism. We can expand the public sector and direct funds to build houses at affordable prices. Society can provide millions of decent apartments and any serious infrastructure plan would allocate money for that. The trade union apprentice schools can expand their trainings and millions of young workers can learn the skills society needs to improve living conditions for all.

The money is there, the obstacle is the private sector, the finance industry, the tech billionaires and the two capitalist parties that have a dictatorship over US political and economic life. This dictatorship, and the refusal of the trade union hierarchy to build an alternative, is one of the reasons a degenerate like Trump was elected. Fortunately, this era of two -party domination is coming to an end.

Housing can be a public venture

So one important step in that direction is building an independent party of working people, based on our organisations in the workplaces, the unions, and also our communities. Housing can just as easily be a public venture like the capitalist’s wars.

Municipal bodies are dominated by landlords and big business. What we build, how we build it and when, is all based on how it best serves business and profit-making. Building independent working-class structures to the present political bodies and linking them locally, nationally and from there internationally, would be a positive step in the right direction.

As things stand now, owning a home is an important aspect of US life. But so were large cars. Americans used to laugh at us in the UK because our cars were so tiny by comparison. But economic necessity changes minds. Most people would be happy with a decent apartment. The state can provide the resources, employ the labour power and can even offer a selection of three or four styles just like the private builders do.

The main thing is it would be subsidized; after all, we subsidize wars and all the other ventures the super-rich initiate like Elon Musk’s space game. He never earned the money he wastes in projects of personal gratification. As a white South African, he has had a very privileged existence, never had to do any hard work and his family’s wealth was robbed from the Black South African working class.

Immigrants are a by-product of US policy

I cannot help wondering to myself when the US working class will put a stop to this abuse by US capitalists. When will we cease falling for the same old propaganda that the world hates us, that the Iranians are on the verge of destroying our way of life (now Washington’s old friend Saddam Hussein has gone), and that economic refugees coming in to the country from our southern border are our enemies, the cause of our misfortunes and declining living standards.

These immigrants are a by-product of US imperialism’s intervention in Mexico and Central America. NAFTA alone drove millions of Mexican farmers from their land and their means of subsistence. People do not leave their homes because they don’t like where their roots are. The reason there are so many people in the US with Irish names is that they were fleeing in the past the same horrors that Mexicans and Central Americans are today.

There is a great US union slogan, “An Injury to one is an injury to all.” It refers to workers of all types and countries. It is not workers from other countries that are the cause of the housing, transportation, health crisis or any other problems we face here in the US. We don’t have to look far to see who’s ripping us off. We simply have to get up and stop the damn music from playing. Elon Musk, Chuck Prince, and the other coupon clippers like them won’t be dancing then.

From the US socialist website, Facts for Working People. The original can be found here.