Pandemic of Financialisation of Housing
Ten years ago, my father purchased the plot of land where I now dwell at Rs.500 ($6.54) per square foot. The same plot of land is now worth Rs.20,000($261.71) per square foot. Keeping all factors such as inflation, area development, etc. in mind, this staggering rise in the price clearly sheds light on the fact that the house, the Home I reside in, is a COMMODITY. Many would be happy that the price of the land they dwell in has appreciated, but it made me realise the gravity of the problem of Financialisation of Houses.
The report published in the HRC, UN rightly pointed out the problems faced by the middle and poor-class residents due to the acts of high net-worth investors, who have atrociously transfigured the concept of a HOME and HOUSING. Being a middle-class resident myself, I have personally experienced the wrath of high rents charged by the rich.
The word Finance/Money itself has so much power that it amasses the attention of all those around. While it is true that finance and trading activities do create place, money and time utilities, one can argue that financialisation of the housing sector is also a great platform for owning a house whilst making money out of it. It is a great example of Financial and Economic Innovation that has existed for decades now. However, the harsh reality is that a home has become nothing but an instrument of making money for the financially rich, and the poor are nothing but playthings in the hands of such people.
The many problems faced by the poor of our country to even get basic housing facilities are evident. As a resident of this country, I would like to touch upon two important problems of the Housing sector:
Firstly, the informal settlement clusters called SLUMS, which represent one of the main types of housing in many growing urban cities from Kibera in Nairobi, to New Delhi and Mumbai. 54% of Mumbai’s population is crammed into slums, which make up only 9% of the city’s geographical area (54 sq. km). This means that 300,000 people are crammed into just one-mile area of land. The remaining area is commercialized. These slums are characterized by inhuman living conditions, crammed space, no proper healthy water drinking facilities, and here electricity is a luxury. The millions of people living in these slums are a testimony to the dark side of making homes a commodity. The local building authorities don’t have any sort of responsibility for the people or any authority over the construction sites, who are just rampant in their profit-making-scheme of houses. Half the population of the Financial Capital of India can’t afford peaceful sleep because it has been denied the basic right to a house. Exorbitant rent, impossible land and flats (a single unit of a building of houses), etc. are the adverse effects of viewing houses as a commodity in Mumbai.
Secondly, Lake Encroachment— With the view of making profits, many builder and construction companies illegally encroach lakes and other forms of natural vegetation. Lakes and areas with natural vegetation in most Metropolitan cities are encroached, often illegally, without the consent of the regional and state building authorities. The flats and houses constructed in these areas are sold at hasty, over-the-top prices. These are foolishly purchased by the rich themselves. Instead of focusing on providing efficient housing facilities for the poor, the authorities focus on making money from these encroachments, completely ignoring the effect this has on the environment. Most of the buildings constructed are not even occupied, rather they are used as financial instruments by the rich as a safe investment.
In a country where more than 60% of the people reside in temporary settlements, making housing a financial instrument has had an atrocious effect on the lives of the Poor
The above problems are a direct effect of financialisation of housing and call for a shift in paradigm— from viewing it as a financial instrument to a basic right that must be held by everybody. Home should no longer be an investment.
Your House is not an asset. It is a liability.
- Rich Dad Poor Dad, Robert Kiyosaki
The various plans and schemes set up by the Government have not been adequately implemented. For example, the Mumbai Slum Reestablishment Project has been carelessly ignored by both the public and the concerned authorities. The public is not educated enough to understand that it has the right to a good home.
This problem of housing isn’t just concentrated in developing nations like India. The cost of being able to afford a comfortable home in developed nations like the US has also risen. Natural vegetation in many countries has greatly depleted due to illegal construction of houses. Unless humans as a whole stop viewing homes as just a commodity, the problems of housing is going to seem endless, especially for the poor. Viewing home as a commodity has indeed been at the root cause of inadequate housing in the world.
And thus, FINANCIALISATION OF HOUSING, has made housing a global PANDEMIC.
Written by — Vinyas N M
Edited by — Anushka Gupta
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