The housing system is becoming a global concern. A country like India follows China as the most populous country globally with 1.3 billion people. It is still far from realizing affordable housing for its citizens. The situation elsewhere is the same. Developed and developing countries are alike drawn into the problem. Two main actors promote the crisis: governments and real estate moguls without caring for the common citizens. Developed countries have their citizens hooked to mortgages while developing countries are plagued by slum settlement. The situation should be addressed as fast as possible in response to the UN report on the financialization of housing system.
Observation
The report on the financialization of housing advocates for the provision of proper housing as required by the human right provision. The article identifies the housing crisis in both developed and developing countries and notes that the commoners continue to suffer as they are denied the privileges of having a desirable home. I agree with the paper in pointing out at the deplorable condition that people continue to face as they are pressed in poor houses, overcharge in rent without consideration of individual’s income and many more to be discussed later. The paper focuses on the government as the leading promoter of these condition housing. The government has its share, but other players should be blamed too for the crisis. The housing system incorporates investors, government, and civilians and each has their part to play to ensure that this problem is addressed because the global population keeps rising.
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Real estate moguls
Real estate moguls are presently controlling the global economy owing to the share they contribute to the global GDP. The current housing schemes have the potential to cause financial crisis of great magnitude. According to the report,
“ Global real estate represents nearly 60 percent of the value of all global assets or $USD 217 trillion – with a residential real estate comprising $USD 163 trillion or 75 percent. This represents more than twice the world’s total GDP ” (United Nations, 2017).
The residential housing system is the most exploited contributing 75% of the total real estate-controlled money. Since the real estate runs 60% of the total value of global assets, a risky situation hovers because the common citizens will not manage to put up with the rising cost of housing. Perhaps this could be the reason governments tolerate unscrupulous real estate moguls. Wallison (2016) identifies housing policies as the leading cause of the financial crisis in the great depression. He mentions the government involvement in schemes regulating the housing industry and the eventual turn of the policies into politics, which ultimately culminated to the financial crisis. A similar event could occur especially where real estate investors are private companies located abroad which would cause financial drain as money is transferred to the countries of the owners. This cycle if allowed to continue over time will have a cumulative effect on the citizens of the local country and result in evictions and growth of slums over time. The private investors are likely to exorbitant church rents that will have a ripple effect on the housing system in the affected nation as other businesses raise their rents and other fees to earn more income.
It is accurate to argue that the real estate dominance is likely to disrupt peaceful democracies ns d bring in anarchies or reign of terror. The current state of things is progressively leading to the bondage experienced previously that led to the French Revolution (Arnold, 2008). The feudal system, originating from chaotic Dark Age, resulted in an imbalance in the land system whereby a few rich people controlled property. They identified themselves as lords while the remaining lot was tenants obtaining land from their lords by offering to serve in the military, ceremonial services, farming or religious purposes (Hinkel, 2012). The revolution was primarily an attack on privilege (Arnold, 2008). This highlights the seriousness with which governments should move to balance the housing system and reduce the poverty margin to ensure that people can afford comfortable housing.
Tenants
The civilians bear the greatest burden with the emerging housing schemes that are designed to enslave them to mortgages and loans. The younger families with low income are affected but are forced to take loans in order to acquire proper housing (Forrest & Yip, 2011). The growing slum population can only be attributed to the housing schemes. People cannot afford the housing systems and therefore resort to slum settlements, which they find to be affordable, but less comfortable (Forrest & Yip, 2011).
Government
The government has contributed greatly to tolerating exploitative housing schemes. The Chinese government follows a strict regulation on its property. This could be because it is communistic and therefore exercises its preemptive right to control the purchase or lease of property (Hines, 2001). Even though other governments may be capitalistic with varied ideologies, the government still needs to recognize its role in handling essential matters such as housing especially when tax-payers’ money is to be used in housing development.
Several steps can be taken to bring the housing disaster into control. The paper highlights some under the recommendations on the visit of India and Portugal. Emphasis is laid on the role of the government in this process. Indeed the government should take the leading role as the formulator, executioner, and interpreter of law through its arms. In the present age, when the housing is becoming an important economic determinant, governments that cannot secure their citizen a comfortable housing should be categorized as failed states.
The UN Universal Declaration of Human Rights identifies proper housing as a right that cannot be alienated from any person in any part of the continent (UN General Assembly 1948). Governments that work to undermine this right by considering one party in the housing pyramid, who most often than not are the investors, have relinquished their position and are violating this right and are therefore liable to answer for crimes close to genocides. Therefore, the UN should take active initiatives to bring governments to a point they would recognize that they must meet the housing needs of their citizens. A global assessment and recommendation without effective follow up will only be a strengthening of the perpetrators.
The article has recommended a change in the manner in which governments relate to financial markets involved in real estate. Therefore, governments should begin to consider the establishment of internal regulations which most have done. Nonetheless, governments should pass implement crucial laws whose outcomes will protect the rights of its citizens to have proper housing. The recommendations by the UN, even from other conventions should be implemented. Placing restraint on private investors by establishing a threshold can surely change the real estate market since it is only as long as they are tolerated that they control the market at the expense of the consumers.
Conclusion
Housing is now a global problem both in developing and developed countries. The main cause of the problem is the tolerant attitude that governments have allowed to exist between them and real estate investors. This can be remedied via the cooperation of governments and the UN in ensuring that governments change how they relate with real estate financiers. A radical change is required. Government regulations should be enforced to govern the development of affordable housing systems.
References
Arnold, J. R. (2008). The Aftermath of the French Revolution. New York, NY: Twenty-First Century Books.
UN General Assembly (1948). Universal declaration of human rights . UN General Assembly.
Forrest, R., & Yip, N. M. (Eds.). (2011). Housing markets and the global financial crisis: The uneven impact on households . New York, NY: Edward Elgar Publishing.
Hines, M. A. (2001). Investing in international real estate. Greenwood Publishing Group.
Hinkel, D. F. (2012). Essentials of Practical Real Estate Law. New York, NY: Cengage Learning.
United Nations (UN). (2017). Statement by the Special Rapporteur on the right to adequate housing, Leilani Farha, during the Interactive Dialogue at the Human Rights Council. Retrieved from https://www.ohchr.org/en/NewsEvents/Pages/DisplayNews.aspx?NewsID=21264&LangID=E
Wallison, P. J. (2016). Hidden in Plain Sight: What Really Caused the World's Worst Financial Crisis and Why It Could Happen Again. New York, NY: Encounter Books.
