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The fight against the debt mountain, in favour of the right to housing

For the first time in a G8 country, emphasis has been placed on the link between the housing crisis and the global crisis, both products of the financialization of the economy. The proposed connection point for a radically innovative strategy: to fight for the reallocation of resources to public policy, by refusing to pay for the debt mountain and striking at the rent.

Attack the structural problems of the crisis, think global and act local

Until recently this link was only evident in the impoverished countries of the geographic South, but the global crisis, which has struck the societies of Southern Europe with full force, has led to the maturation of a rapidly relaunched debate at the heart of the anti-debt movements, notably by the IAI. The first visible response to this, not only in terms of analysis, but also innovative proposals, was at the 2012 National Congress of the Tenants Union.[1]

Until now, the starting point for the most advanced analysis and proposals was the following: the crisis cannot be understood without considering the question of the burden of rent. To research changes in rent movement, is to get to the heart of the process of valuation. In other words, to talk about the structural problems of the crisis means talking about what is called the ‘financialization of the economy’, particularly with regard to the real estate sector as an instrument of the stock market capitalization of companies, which has displaced billions of Euros. A process which, during the last decade, has witnessed the transformation of property into ‘real estate funds’ where the rent is abstracted from the concrete conditions of urban development, and turned into a financial product. For a long time, economic decline, accelerated by this decision, was hidden under stone and concrete, until it was exposed by the explosion of the housing bubble and, at the same time, the explosion of sovereign debt.

This led to the treatment of the debt as a weapon of parasitical rent  at international level, which in turn gave rise to the refusal to pay it, as it was considered illegitimate. Effectively, in general, the debt was contracted without consideration of, or with contrary aims to, the legal obligations of States which have ratified the International Pact on Cultural, Social and Economic Rights, and without consideration of unsustainable conditions. For these reasons, the claim was made that States, in their turn, must pay the social debt contracted with their citizens, in terms of the implementation of social policies, notably in favour of the right to housing.

The impact of the crisis and the austerity measures on the housing issue

The grave economic recession and the severity of the austerity measures have led to increased levels of poverty and housing exclusion in Europe.
 According to the report “The social impact of the crisis and analysis of the latest developments in view of budgetary consolidation measures” [2], the housing sector and related services are among those most affected by the crisis. This often leads to late rent or mortgage payments, an increase in evictions and homelessness, longer waiting lists for public housing, the demand for services for the homeless and debt to pay for essential services, such as heating and water[3]. The demand for prevention services, such as assistance with mortgage payments and debt management, as well as support for tenants, has also increased in recent years[4].

Let’s look in closer detail:[5]

In England, for example, waiting lists for social housing have increased consistently from around 1 021 000 in 1997 to more than 1.8 million homes in 2011. In France, 1.2 million applicants are on waiting lists for social housing and 630 000 in Italy. In Ireland, the number of people in need of social housing has increased by 75% since 2008, going from 56 000 to 98 000 applicants. A new social group at risk of housing exclusion is the middle class, where there is a growing demand for social housing.

In Italy the number of evictions is growing[6]; 65 000 notifications in 2011, of which 56 000 were implemented by public enforcement authorities, with a rise in implementation to almost 85% of the total. With the current trend towards increase, we can expect 250 000 further evictions over the next three years.

Despite the increased demand for social housing, this sector has been the victim of budget cuts in numerous countries. In England, for example, the budget for the development of housing associations has been reduced by 63%. Similarly, Scotland has seen a 40% reduction in direct support for social housing. In Portugal, public funds have been reduced to the point that many projects cannot be implemented, and those already approved are still on hold.

The municipalities, mainly responsible for social housing, have a limited capacity to obtain credit from the banks, so it is no longer possible to invest in this sector. In Poland, the National Fund for Housing, which has financed more than 40% of social housing, was dismantled in 2011. In Austria, in recent years, government grants for new constructions have been reduced by about 20%. In Spain the situation is paradoxical because, despite the fact that at least 150 000 homes have been lost due to indebtedness, and a further 510 000 at least are at risk of being lost due to the economic crisis[7], the construction of social housing available for rent has fallen. In effect, budgetary support from the State has been reduced by 40%, and certain public bodies have been forced to sell their rentable housing stock.

Even Germany is not immune to this situation. Several towns in budgetary crisis have already sold their municipal social housing agencies to international investment funds, mostly American and Japanese. The Annington Fund is now the largest property-owner in Germany with 150 000 units in its portfolio.

In Greece, the most dramatic of situations, the package of measures agreed by the Parliament on the 12th February 2012 includes the dissolution of OEK, the public body which provides moderately-priced housing for workers, i.e. the only form of social housing in the country. On the other hand, the Belgian region, Flanders, Wallonia and Brussels, are the exceptions, because they have stable support for the social housing sector in 2012, to satisfy the growing demand.

The consequences of the housing crisis in the paradigmatic case of the ‘fiscal pact’ in Italy

The Tenants’ Union has analyzed in further detail the consequences of the ‘fiscal pacts’ imposed by European technocrats, with regard to Italy. In this case, they plan to reduce the budget by 900 thousand millions of euros in the next twenty years. Given that housing policy has not been a priority for governments for a long time now, there is and there will be no State budget for public housing. The Italian government has also cancelled the allocation of social funding for tenants, including the low-revenue categories, which has plunged 300 000 families who were the beneficiaries of this allocation into the abyss of payment default.

These policies are the exact opposite of the respect for legal obligations which Italy assumed with its ratification of the International Covenant on Economic, Social and Cultural Rights; among other things, the General Comments nos. 4 and 7, forbid any evictions without adequate rehousing. But it is not evident that there will be any change in these policies, even less so with regard to the parameters of European convergence which should regulate social housing. To comply with this, Italy would have to multiply by four its current offer of rentable social housing, that is to go from 4% to 16% of the European average.

Finding resources for housing: strike at rent and don’t pay illegitimate debts

The winter of the hardest crisis and the recession, on the one hand, make urgent measures necessary: a freeze on all evictions and the sale by judicial auction of homes which constitute the household’s primary acquisition, a broadly occuring phenomenon. Therefore, faced with government disengagement, solidarity pickets to prevent evictions are multiplying more and more.

On the other hand, the growing demand for social housing requires that public housing stock is not sold, but rather that the housing reserve should be increased, beginning with vacant stock. This represents an enormous property holding, often situated in expensive areas and threatened by speculation. Therefore, a large programme of urban rehabilitation, including self-rehabilitation, is necessary in order to develop social housing. This would be a huge building site for the reconversion of the economy, i.e. a true public intervention against the recession with a grand plan for employment.

Refusing the ‘fiscal pact’, which prevents any social public policies

Without a doubt, the key theme, where to find the resources for appropriate public policy, has been the basis for the development of an innovative political proposition, potentially bringing revolutionary changes.

The campaigns against the causes of the crisis indicate two specific directions for the recovery of the necessary resources: the real estate rent and the debt mountain.

In Italy, there are officially more than 5 million vacant properties, which often conceal fiscal evasion. Between 1 and 3% of additional taxes on these properties could generate from 6 to 18 thousand millions of euros in tax receipts each year. According to these statistics, there are between 500 thousand and one and a half million leases undeclared to the fiscal authorities by the owners. With an average rent of 7 to 8 thousand euros per year, that represents between 4 and 10 thousand millions of euros annually of unpaid taxes.

Is it possible to try to clip the wings of parasitical rent, by finally introducing a property tax?

It is possible, as demonstrated by the campaign ‘Out of the dark!’, set up by a collective composed of the Tenants Union and the metropolitan movements for the right to housing, such as Action, a university-based collective, Arc, the young communists, and other realities on the ground. Exploiting a loophole in current legislation, which is biased toward rent, and denouncing black market rentals to the Tax Agency, rent costs could be reduced by 80% over a period of eight years.

As for the debt, which should not be a taboo subject, Tenants Union has done a study on the struggle over the securitization of public buildings in Italy at the end of the nineties and in the first decade of the 21st century. This was (and still is today, as the government want to create a mega public real estate fund) a large-scale operation of financial speculation (called, with a lovely euphemism, ‘creative financing’), playing with words, to restore public debt, and which has concluded finally in failure and a deficit of over 2 thousand million euros for the State.

There is much more to say, in particular on the external debt contracted by governments to finance ‘large public works’ such as the Lyon-Turin TGV link or the bridge over the Strait of Messina, priorities imposed in opposition to what is owed, constitutionally, to pay the enormous and growing social debt to the population.

Let’s write a new chapter together in the campaign for the right to housing

For these reasons the theme of housing should belong neither to a specific sector, nor only to a group of organizations of tenants and metropolitan movements, but should become the central theme of a new social movement, anti-neoliberal, at European and international level.

Therefore, a general engagement with the movements campaigning for the right to housing, with the anti-neoliberal and anti-debt movement and with local authorities strangled by the ‘stability pact’, to demand an audit of Italy’s debt[8]: what the debt consists of, what is its structure and the conditions for emergence, which part of it may be legitimate and which part should be refused, thereby liberating resources.

It is possible, as it has been possible in recent years, thanks to the alliance between local and international campaigns, to obtain debt cancellation for poor countries by rich countries. The W Nairobi W - Zero Evictions Campaign[9] has obtained, for example, the full cancellation of the debt of 44 million euros of Kenya to Italy, in return for the liberation of resources for participative social policies, in particular to finance the upgrade of the slum of Korogocho.

Today it’s the turn of the newly impoverished countries, where social movements are beginning to develop their awareness of the need for international solidarity.

To achieve this it is important to refuse to consider only the urgency of the housing problem, because in the name of urgency, anything goes, including speculation and destruction of territories, resulting in homelessness and empty houses in unlivable towns and cities. It is better to consider the subject of housing in relation to civic policy, the public governance of territories, and the stakes in the fight against speculation and real estate rent.

At the same time, we should understand that the supranational scale is not a supplementary aggregate, but is the condition for the development of a response to European technocratic policies and for giving dimension and depth to territorial struggles.

This explains the interest in the process of convergence emphasized by the proposal for the construction of the Urban and Communitarian Way[10], space and common path for inhabitants’ organizations and urban social movements to share experiences and strategies, as well as to construct concrete tools for the sustainability and efficiency of solidarity with g-local campaigns.

A process to which several dynamics are contributing, including the Urban Social Forum[11], alternative to the World Urban Forum of UN-Habitat, the World Assembly of Inhabitants[12], World Zero Evictions Days - for the Right to Habitat[13], key events for all the movements fighting for the right to housing, in alliance with the anti-neoliberal movement.

It is effectively essential, even with regard to the right to housing, to act at the local level and think at the global level; we must take the European level as a minimum.

So it is therefore a battle between classes, a new chapter in the right to housing at the heart of the movement which opposes the policies of austerity without compromise, a contribution to the resistance movement and an alternative to neoliberalism.


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[1] 13th National Congress of Unione Inquilini (Chianciano, 4-6 May 2012)  . UI, set up in May 1968, is the oldest and most well-established of the Italian tenants’ organizations. See the Final Resolution of the 13th National Congress of the Tenants’ Union , and in particular the agenda  regarding international themes.

[2] The social impact of the crisis and analysis of the latest developments in view of budgetary consolidation measures

[3] CECODHAS Housing Europe Observatory (2012)

[4] FEANTSA (2011)

[5] Impact of Crisis and Austerity measures on Social Housing (2012, CECODHAS)

[6] Rapporto sui provvedimenti di sfratto, Ministero dell'Interno, 2011

[7] EL MUNDO.es, 10/01/2012, Asociación de Afectados por Embargos y Subastas (AFES)

[8]  Centro Nuovo Modello di Sviluppo: The debt in 12 questions and answers

[9]  Cancelling debt to house the poor: The experiment is now possible in Nairobi

[10] The Urban and Communitarian Way

[11] Urban Social Forum (Naples, 3-7 September 2012)

[12] World Assembly of Inhabitants (WSF Dakar, 2011) , in the programme of the Tunis WSF (April 2013)

[13] World Habitat Day 2011

The Volunteer translator for housing rights without frontiers of IAI who has collaborated on the translation of this text was:

Juliette Rutherford


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