Right to housing or free market?

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At present, it seems evident that the needs for rental housing have increased (crisis, more vulnerable groups, more precariousness, more marital breakdowns, more single-person households …), that prices have reached unaffordable levels and, therefore, the effort Access to housing has increased, and that more and more sectors of the population compete for this good, with serious repercussions for some of them.

The question thus arises as to whether the State should provide a minimum standard to the population in relation to housing. If renting stands out as the main option and is subject to market forces, should the State intervene by regulating prices? On the one hand, investors and tourists, and on the other, vulnerable households (immigrants, precarious young people, the elderly, women with burdens, etc.). The truth is that the housing rental arena is an area of ​​competition that raises some reflections.

Housing, a necessary good

Housing is the main expense of Spanish households. In Spain, the housing regime model has changed from home ownership, typical of southern European countries, to a greater relevance of rental housing, more in line with northern countries.

Southern Europe is characterized as a zone of landowner countries (and it still is). Since the Francoist Housing Minister José Luis Arrese said that housing gives stability to a society and that Spain would go from being a country of proletarians to a country of owners, many things have changed. Although there is still less rental housing evidence, this is becoming more and more relevant, especially given the growth in demand.

In Great Britain, the Thatcher government (1979-1990), with its policy of social housing, highlighted that privatization generates stability and right-winging in the population, thereby confirming the domesticating power of housing and property. .

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Citizen Law vs. free market

One of the most important functions of the rental market is to provide housing, on the one hand, to the most vulnerable sectors, and on the other, to the most mobile in a world of increasing temporary nature.

In turn, these sectors are dominated by segments of the population with high purchasing power, and more linked to mobility, and those with fewer resources, linked to permanent residence, housing as a roof and shelter. Both compete in a constantly rising rental market.

The rise in rental housing prices is partly explained by gentrification, touristification, monetarization, investment in housing, the increase in demand … This impacts on the right to housing and housing as a good of use for some sectors, compared to housing as a good for exchange and business for others.

If the Spanish Constitution guarantees the right to decent housing, many sectors of the population cannot access it. Purchase and rental prices have experienced strong increases, disproportionate to the purchasing power, especially of certain groups.

For the most vulnerable sectors, access to housing becomes complex and difficult. Especially because in Spain, the Gini index, which measures inequality, has been increasing in recent years and also the data on poverty. In this way, it can be said that Spain is more unequal and poorer than the average of other European countries and, therefore, social problems are more pressing.

The role of the state

What role does the State play in this scenario? In a context in which the market generates inequality, the welfare state, with its potential to redistribute wealth and provide coverage to the vulnerable population, is essential. However, this is not what is being evidenced but its retraction, in a neoliberal world where conservative forces are campaigning and gaining ground.

Unfortunately, many believe that the market should work only because, in the long run, it will generate well-being for all. But that is not what has been shown: the more market (more market liberalization), more inequality. And, as Wilkinson and Pickett have pointed out, the more inequality, the less well-being, the lower the quality of life, the lower the life expectancy.

Under the philosophy of “strive to achieve this” it is thought that the State should not intervene because it generates dependency and immobility. Thus, the belief that the one who has a good economic position is the one who works and makes an effort is validated, delegitimizing the rest.

Vulnerability and regulation

In a context of growing inequality, the truth is that the State should guarantee the minimum vital to citizens. On the other hand, although it seems that the welfare state is the hallmark of Europe, this principle is being eroded. This forces to propose answers such as limiting the rise in housing prices, or, more recently, limiting the price of rent in areas stressed by prices.

The experience of rent regulation in Berlin has resulted in a reduction in the rise in prices, allowing the most vulnerable sectors access to this necessary good. However, in Sweden the private housing rental market was also regulated and disappeared because it is no longer considered a business. In San Francisco, this policy has caused rental home owners to finally sell and dispose of them.

Until now the most common thing that has been done is a regulation of growth in prices, that is, the regulation of increases. But it does not seem to be enough because, with the type and duration of the contracts, what has happened is that, with a new contract, a new rise. And thus, there is no cap.

What is being debated is whether to limit the rental price only in stressed areas or throughout the geographic space of the affected municipality. Because if it is done in stressed areas, for example in the center of a city, affected by tourism and mobility but also by precariousness, if it acts on prices and not on subjects, the effect of regulation could favor the more affluent sectors, demanding of housing in those centric zones.

Public awareness

The most equitable thing would be to encourage owners to mark affordable and not exorbitant prices. This would happen by creating awareness that housing is not an instrument of speculation but a citizen’s right, and by ensuring that society does not seek profit as its primary objective. Education and communication are key.

Favor the existence of habitable, human, close and mixed neighborhoods. And deepen the desire to contribute to society and not seek mere profit. Something of a utopian look.

Similarly, public agencies could encourage rent at limited prices, promoting the residential before the mobile and fleeting, but not indiscriminately, but considering the purchasing power of applicants to benefit the most vulnerable groups.

This article was originally published on The Conversation. Read the original.

Marta Domínguez Pérez does not receive a salary, nor does she work as a consultant, nor does she own shares, nor does she receive financing from any company or organization that can benefit from this article, and she has declared that she lacks relevant links beyond the academic position cited.

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