Understanding the Housing ‘Crisis’
That there is a housing ‘crisis’ seems so obvious, it does not even merit discussion. But this is not as straight forward as it appears. There is a housing crisis, yes, but only for those who are not in the economic and political elite. For those at the top of the social and economic structure, the housing system is working just as intended. Under capitalism, the housing system doesn’t exist to provide what we all seem to expect from it – affordable housing in suitable locations.
Condemning the housing system as being in ‘crisis’ may seem like an act of political resistance, but it does not help us to understand the root of the problem or to facilitate the response required to initiate change. Capitalism cannot exist without the precarity that arises from a world dominated by perpetual crisis: financial crisis, cost of living crisis, crisis in the NHS, ontological crisis, housing crisis etc. These are all political artifacts that are designed to disguise the fact that this is EXACTLY how things are meant to be. The things of the world: goods, services, institutions etc., don’t work in the interests of the majority of people, they work in the interests of those who have, for their own economic and political ends, appropriated the machinery of state.
If the post war period seemed to be better – in so far as workers had more security, affordable housing, free education and better healthcare – it was because these things were also beneficial to the interests of capital accumulation at that particular time.
In order to understand the extent to which public goods and services (such as housing) have become commodities and more recently, assets in their own right, we need to understand the extent to which they are determined not by the needs of the workers alone, but by their relations to the modes of capital accumulation.
To adequately understand this process, an historical overview is required.
A Brief History of Housing (a materialist perspective)
Slums and Red Clydesiders
The industrial revolution saw a surge in people moving from the country to the city to work in factories. They tended to stay in poorly ventilated, badly sanitised overcrowded slums, where disease was rife and life was relatively short. This form of slum housing served the interests of industrial capital.
In 1915, the Rent Strikes marked a victory for the munitions workers (mostly women) in Glasgow during the First World War. The government caved in to their demands and passed rent controls in order to control rent increases imposed by private landlords. The apparent victory was that of the munition’s workers. However, this is just one side of a more complex story. Rather than indicating the philanthropic leanings of the government, these tenants were central to the war effort. Rising housing costs would have required a rise in wages to meet that demand, which in turn meant a rise in the cost of armaments, placing the entire war effort at risk. The risk of spiralling munitions costs, coupled with the retaliatory threat of industrial action, was too much for the government to stomach, so it took the unprecidented steps of introducing rent controls, capping rents and making evictions more difficult to enact.
The Post War Settlement (housing as a subsidy for industrial capital)
There is a clear relation here between housing costs and labour costs, so when much of British industry was nationalised after WWII, the government immediately inherited a need to keep wages low to sustain the competitive character of British industry, which it could not do if housing costs were inflated. There was, therefore, a desire to replace the private rental market with a much more stable social housing sector. Housing was of enormous benefit to British workers, yes, but most importantly, it was a subsidy for industrial capital at a time when British manufacturing had to remain competitive in a globalising market. The telling fact here is that in the 1950s and 60s the Conservative governments built much more social housing than Labour ever did. For workers, this was considered the ‘Golden Age’, not just of the so-called welfare state but of social housing, constituting a period when more people lived in a council house than ever before or indeed since. In Scotland it was, by far, the dominant tenure.
The Shift from Use Value to Exchange Value (or from subsidy to commodity)
The 1980s, after a decade of decline in manufacturing, saw the introduction of the Right-to-Buy. Thatcher’s ‘flagship’ policy was actively embraced by workers the length and breadth of the UK. De-industrialisation and the flight of industry overseas, meant that housing itself became the commodity, rather than the subsidy for manufacturing capital. The neoliberal project, with its de-regulation and reregulation, its dismantling of the social security system and its replacement with increased precarity, created the perfect conditions for homeownership. Not only did new mortgage regulations create lucrative markets for banks and lenders, they created a docile working class, unable to go on strike for protracted periods for fear of defaulting on their mortgage and losing their home. A resounding win – win for capital all round.
The Return of Rentier Capitalism
As the global economy lurched from crisis to crisis, and housing markets collapsed, the return of rentier capitalism, a process driven by accumulation by dispossession, was inevitable. Once more, the demands of capital accumulation dictated a return of the private rented sector as people struggled to meet the runaway cost of housing in an inflated market exacerbated by increasing scarcity.
There has, since the global crisis of 2008, been something of a resurgence in the private rental sector. Add to this the pre-pandemic rise of short-term holiday lets such as those offered by Airbnb, and the conditions for perpetual housing ‘crisis’ begin to emerge. The pandemic handed around £700 billion to the wealthiest sector of British society. This was, as economist Gary Stevenson points out, the biggest upward transfer of wealth in history. It also led to a growing number of commodities becoming an asset class in their own right. Housing was one such asset class. Having more money than you know what to do with, allows you to buy assets at inflated prices, in what becomes a vicious circle of accumulation by dispossession. The rich, as Stevenson says, are coming for your mum’s house.
This has resulted in a shortage of affordable houses to both buy and to rent.
England’s Eviction Crisis
The Ministry of Justice has released figures showing a rise in evictions in England and Wales of 98% in the last year. The housing charity Crisis has said that over one million renters fear being evicted in the coming months. The cost-of-living crisis, real-term pay cuts, soaring energy bills, rising interest rates, increased rents, high-demand on limited property numbers, and repairs have all contributed to the rise in evictions over the last few months.
In Scotland the situation for renters and tenants is better, since the Scottish Government put in place a set of measures that make evicting tenants much more difficult, compelling landlords to seek permission through Housing Tribunals and setting the bar particularly high. Contrary to popular belief, evictions haven’t been ‘banned’ in Scotland, they have just been made more difficult to enforce.
Here, just as with the mitigation of the ‘bedroom tax’, the Scottish Government have used devolved powers to ameliorate another Westminster imposed sanction on ordinary people. But it would be naïve to think that Scotland has escaped the material realities of a housing ‘crisis’. There are political reasons for this, but let’s not pretend Scotland has eschewed the problem of accommodating its citizens. Ending the right to buy has seen a slight resurgence in the construction of social housing. Steps have been taken to reduce the impact of short term lets by giving local authorities more powers of discretion. There is even talk of rent controls and further action to tackle the excesses of the private rental sector. But these won’t have much effect on the bigger picture.
What we can know for certain, is that we get the housing system that suits the interests of capital and capitalists.
If we wish to return to an epoch in which social housing, affordable housing, or as Bastani suggests in Fully Automated Luxury Communism, free housing, then we need to radically alter the political economy. Since, as Mark Fisher (attributing the comment to both Slavoj Zizek and Frederic Jameson?) points out, ‘it is easier to imagine the end of the world than the end of capitalism’, we may have to find ways of designing an economic system that, as it did during the period when manufacturing was the dominant form of capital accumulation, relies on an abundance of affordable housing, as opposed to imposed scarcity, unaffordability, and the constant threat of eviction.