A Case for the Abolition of the Housing Market

I've paid almost 10000 euros in rent in my first year paying it. I've never loved the idea of paying rent, because it's a predatory system that promotes cannibalism with extra steps. Housing is an odd good to trade in on the free market of global capitalism, seeing as it's technically an essential good and human right, but it's expensive enough to bar significant parts of the population from living in a way that meets their needs as people. It, along with other essential goods are most prone to escaping the ruling of the "market forces" that liberals use to justify the existing systems. The much maligned bureaucratic machinery basically makes not having registered living space a non-starter. Unhoused persons will have difficulties finding and holding jobs that are not explicitly set up to account for this problem or circumvent the paperwork, meaning that if the firm in question has to file taxes and isn't getting some exception on it, then employing somebody without an address is a non-starter. There are a myriad concepts out there aiming to solve the "housing crisis", but I want to make a case that the only way to get rid of the problem is to first get rid of the market.

International Human Rights

Article 25 of the UN's universal declaration of human rights reads:

Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

From a legislature perspective, this could technically shorten this essay to the words: "Everyone who wants housing has to get housing no questions asked." and we'd be done with it. In practice, human rights have more articles than just 25, and sometimes they contradict. For example the Right to Property (Article 17). Presumably, if one were to lock the two in a room and tell them that only one was going to leave alive, then Article 17 would leave before the assignment was even relayed to them fully on account of having cooked and eaten Article 25 on sight. The way this problem is commonly faced would be within the framework of theft, for example. Say some person A was in posession of a house, where they resided day to day. Now person B came along and told them that they had a right to housing and so person A had until the end of the day to vacate the premises. Keep this example in mind for later.

I think we can agree that even without any serious political analysis, this is probably not how either of these things should work. I have splendid news in that case, because I think nobody ever thought this was how it was supposed to work. In philosophy one makes a distinction between positive and negative rights, meaning rights to do something and rights to be protected from something. The UN makes no such distinction, but I think they must have intended it that way, otherwise they must be made up of brainlets to not have appended their document. If we were to use the most favourable interpretation (favourable toward the competency of the UN and its member states, that is), then Article 25 is positive and Article 17 is negative. As a rule of thumb, if one notes down a negative right, then it should trump a positive right in cases of contradiction unless otherwise specified, because otherwise there would be almost no point in even noting it down. This would make person B in our example blatantly mischaracterizing the extent of their legal basis to claim person A's housing.

An Exercise in Bourgeois Philosophy

However, let's assume person A did not own just one house, but approximately fifteen, and let's assume person B owned significantly fewer, let's say none. Then should person B be entitled to one of person A's houses? Well, it's tricky. Intuitively I would argue that person A should probably give up one of theirs, but that is an ethical statement first and foremost - not a great basis for legislation if you don't also happen to be a fan of Kant. Still, as a short exercise in compassion and the somehow bourgeois philosophical school of utilitarianism, let's think this through. Realistically, a single person has good way of making use of 15 houses themselves. Mathematically, at least one of them would be in use for less than a month every year. Assume, person A had family, then of course use by family members would be an interesting defense, but would rather give a good reason for person A to hand over the properties to said family members directly. Beyond this, person A could always rent out a subset of their properties. Maybe even to person B. This then opens an interesting, very Marxist discussion: Why pay person A just for owning property? A common prima facie argument is that person A is entering a risk with their property. They (presumably) don't control what happens while person B is using it, so they take rent payments so that no matter what happens, they don't end up needing to pay for person B's actions (i.e. damages to property). One could also argue that person A is providing a service. After all, they have something person B wants and are letting them have it, as long as they are in a business relationship (let's assume person A is the platonic ideal of a landlord).

The first argument is a little passive for my taste. For it to work, one has to assume that the person A gained all their properties by unobjectionable means. By this I mean that even through Inheritance for example, ownership of the property was never based on systemic injustices (like racism, for example), for the person A's excess of wealth/property to even be remotely defensible. I understand that this is a high order in most "developed" countries (because of colonialism), but I don't think something being hard is a good excuse not to draft legislation for it. Mind you, nobody is asking for person A to give away all fifteen, despite the details of their acquisition, but maybe the ones that were seeing less than half a year's worth of personal use. The utilitarian perspective would be in favour of expropriating (with or without compensation) person A in this case, to provide enough living space for person B. Keep in mind, money transferring from one person to the other is a zero-sum transaction, so doesn't necessarily factor into the utilitarian equation, unless one party is in risk of losing other assets if the transaction doesn't take place.

The second argument doesn't sit right with me either. Of course some landlords do work, but paying rent, even if no work had to be done, is more similar to extortion than it is paying for a service. Payments for services need to be correlated with the work being done, both in the monetary sum, and in the time-frame in which the work occurs. Imagine doing a shift at a hospital and getting a promise that payment might show up anywhere in between eight to twelve months. It doesn't really feel like income at this point. The opposite is also true, albeit for the person paying for the labour. Further, the "service" of providing a living space is a little like demanding payment for the service of providing air. I'm aware that capitalism has found ways to squeeze capital out of almost all human rights, but that's no reason to accept that as the status quo. This argument is mainly based in property rights, knowingly or not, as one party could only object to usage of another resources by another through direct ownership of the resource in question. Not at least conceding to exceptions of property law in the case of resources required to sustain a human life opens the discussion to frankly unsettling questions of actions that a person who require more of those resources than are available to them are legally allowed to take. Assuming that a utilitarian would favour life over death of either person A or person B, in this case too, they would be wise to choose for expropriation (with or without compensation).

Housing and Means of Production

Seizing the Means of Production is possibly the shortest shorthand for communism that is also worth something. In short, only work is supposed to be paid, not ownership of property. Under a quick reading, this is only applied to tools that are used to generate value (meaning "do work") within an economy, but there is also a solid case to extend it to essential resources. Beyond the simple fact that in a bureaucratic system, work without an address is difficult to implement and probably not great for the worker either way, and basic needs have to be met for an individual to effectively do work in most cases.

In Marxist circles, bourgeois employers are participating in something called "rent seeking behavior". In liberal vocabulary, the term is defined as "seeking income without contribution", and is often reserved for theft and corruption issues. I'd argue demanding money for essentials borders on the same, though the details are much more defined through their specifics.

Consider the cost of water. No water, no humans. That's usually how things go. Similarly, if costs of water take up too much of the monthly income, that is considered a crisis. Of course access to water requires labour to be done and that labour to be paid. However, anything beyond paying that labour is tantamount to extortion, seeing as - as we established - no water, no humans. This then would fall in line with the definition of rent-seeking behavior, seeing as the surplus is money that's extra to the actual cost. What makes this different from surplus value on let's say ice cream is that there are alternatives to ice cream that can be found on the market and does essentially the same. Essential goods don't enjoy this luxury, so treating surplus on water like surplus on ice cream is a false equivalency in a way. Of course that surplus currently exist, but it's not crushing in most cases, mostly because it's hard to die of thirst quietly.

In the case of housing, considering payment for it takes up such a disproportionate portion of the monthly income, it begins to drive motivation for work in a way that's more cruel than it is inspiring. The aspect that allows it as much leeway as its had on a humanist level is that the miseries of homelessness are largely silent, and everything beyond this can be reframed into a first world problem, i.e. people not having access to luxury goods. This specifically might be a phenomenon worth revisiting in the future, but let's leave it at that for now, seeing as this essay is looking to turn out pretty long already.

Though having control over ones own means of production is already a great step in itself, it's meaningless, if the worker is instead pinned into another relationship through capital. After all, the goal in the end is the emancipation of the working class. This is not to say that nobody should pay for water or housing for that matter, but that the prices should reflect the labour done to obtain it, and that ideally that it be provided for as low a cost as possible. In such a way, ownership of the means of productions are much rather an extension of the hypothetical right to essential resources, with the definition of the latter amended to include the means to do labour on ones own terms.

Alternative Models

Without suggesting a regime change, this is actually a problem bourgeois democracies can solve through legislation alone. They might have to utilize traditionally Socialist/Communist means to do so, but bourgeois democracies have a long history of making these concessions anyway, and in fact, many already have rules establishing cases in which these means are legal to employ. Further good news: little additional research need to be made. Alternative models for a housing economies already exist and even alternative ways of letting these properties change hands.

The latter is probably the easiest to explain. When paying off a loan, one is usually given a rate at which to pay it back. Assuming the interest on that loan is sensible, each installment of money paid to the lender puts the debter a tangible step towards full ownership. There is no reason why all renting models couldn't be transitioned into a rate payment model, seeing as functionally little would change on a month-to-month basis for both parties involved. This is something that I think should be a bare minimum to be adopted, but it alone wouldn't solve the housing crisis. For this to even resemble a solution, housing prices need to at least fall to point where everybody will have definite access to housing, specifically, housing outside of slums or other similar structures that promote sustained poverty and directed neglect through state capital. This, is in direct opposition to the idea of a housing market, as this would render the profit motive nonsensical within a housing economy. Instead, the "economy" that is left, would have to make due with sustaining itself as a relatively closed system. In the end, a lot of the misery driven by economies are explained away by this reasoning anyways, so let's apply it in this case.

First, we'll have to check how difficult it will be to get everybody housed in the first place. Housing needs to be built, which is labour, which needs to be paid. I will treat the paperwork cost as negligible, as it's mostly a one-time expense, the sort of which is usually levied at the tax-payers anyway. I will speak on the basis of the great capitalist economies here, so US and Europe. Not (necessarily) surprisingly, it's not actually that expensive in the case of the US, which has the second-highest OECD per capita number of homeless persons. It turns out, there's more empty properties than homeless persons in every single state of the US. Germany, the EU country (post-Brexit) with the highest per capita homeless statistic shows 178.000 registered homeless at the beginning of 2022. Authorities might well have missed some, so let's assume it's 200.000. Towards the end of 2021, the registered number of empty flats was slightly upwards of 600.000. Authorities might have ignored some, but it's already about thrice the number necessary to solve the homelessness problem. Mind you, this is not including empty houses. Here, too, one could just house people (post expropriation). In the UK the issue is maybe slightly more difficult, seeing as the reported 274.000 registered homeless people outnumber the 257.000 empty homes by quite a bit, even if one accounts for a fact that not every individual person needs to be housed with a home to themselves - families and couples experience homelessness as well - but even if the numbers were to fit, one should account for a steady rise in demand either way. However, the UK is one of those countries, where tourism is strong, and strong tourism comes with something called the "Airbnb" effect. What would otherwise be rental properties go toward the lodgings of short-term tourists. These aren't considered "empty", as they are part of a business venture, but it's generally considered a bane on popular tourist cities, especially since the occupancy rate across Airbnb - which may be the most popular platform, but is far from the only one - meanders around at below 20%. Unfortunately there's no nice source for the number of vacation rentals outside the US, so I had to do some calculations. Airbnb doesn't want to look like there's a bunch of options, since their lists cap out at 1000 hits. Booking.com though has this fun little banner on searches.

Considering the search netted me over 4000 houses and apartment rentals, then the site will probably have around 10.000 houses and apartments across the UK. This is the second largest vacation rental site out there, so it'll be a good deal more across the platforms. I'd wager a guess that it'd be enough to close the gap. In sum, the remaining construction costs will probably be manageable, provided one doesn't pretend that the housing crisis has to be solved by new construction alone (a little bonus tip: the WEF is severely wrong about most things). Upkeep of residential units are usually considered to cost about 1% every 10 years of the original construction cost. A minimum wage job in the US will earn about 15.000 USD annually, so over ten years that would be 150.000 (assuming no changes in the rate). At the same time, construction costs of a home is estimated around 300.000 USD (not counting land acquisition etc.), so as an extremely naive (and also slightly pessimistic) estimate, a minimum wage worker would have to relinquish about 2% of their income for actual upkeep of the property.

These numbers however are all with the understanding that nobody pays rent, and are impossible in a system that expects profits from housing people, in short: a housing market in the first place. Being in favour of a housing market is certainly the popular thing to be, though I think a defense of such should come with the appropriate weight, knowing what choices have to actively be made and which ones need to be actively ignored.