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Leilani Farha, Global Director of The Shift and former UN Rapporteur on the right to housing, launched on Thursday, 2 June 2022, the first-ever directives on the financialization of housing in the European Parliament. The Shift Directives can be downloaded HERE,

“The financialization of housing is one of the leading causes of unaffordability and a major driver of inequality in cities around the world. It’s time for states to stop behaving like their housing systems are working for everyone and that the financial actors who have fuelled the housing crisis should be left to solve it,” said Farha. “The Shift Directives are an urgently needed human rights framework offering a clear path forward to reorient housing systems and the actions of investors.”

The launch of The Shift Directives represents a watershed moment for the right to housing movement. It is the result of nearly two years of work, including consultations with dozens of experts around the globe.

The directives expose how financialization is contributing to the global housing crisis and are a wake-up call that the status quo is neither sustainable nor acceptable. The directives present practical, human rights-based solutions for governments and investors. They are also a tool for housing and human rights advocates to push back and assert the right to housing.

“Human rights advocacy will always have limited reach and inadequate results until it can deal effectively with the impact of financial structures and institutions. These Shift Directives represent a huge and pioneering step in that direction,” said Philip Alston, Director and Chair of NYU’s Centre for Human Rights and Global Justice.

The Shift Directives offer pragmatic ways to limit the financialization of housing, with guidance on matters such as strengthening tenant protections; regulating institutional investment to comply with human rights; curbing profiteering practices driving evictions and soaring housing costs; restricting short-term rental platforms like Airbnb; ensuring central and commercial bank policies are human rights-compliant; and strengthening accountability measures.

Leading thinkers and advocates including economist Mariana Mazzucato, sociologist Saskia Sassen, author and scholar Anna Minton, Chief Human Rights Commissioner of New Zealand Paul Hunt, Director of LSE Cities Ricky Burdett, and the grassroots Spanish housing movement PAH have endorsed the directives.

“The Shift Directives make a compelling case as to why we need to transition from short-term, extractive, and financialised economic systems to those that put public value at their heart,” said Mazzucato. “This call to reorient housing should serve as a guiding mission for policymakers concerned with creating real public value.”

In the European Parliament, Farha presented the directives alongside Manuel B. Aalbers, one of the leading researchers on the intersection of real estate, finance, and states. The presentation was followed by a panel discussion featuring members of the European Parliament, the European Commission and Housing Europe.

The launch of The Shift Directives also coincided with an opinion piece in The Guardian and a special episode of PUSHBACK Talks.

“This launch, coupled with a wave of global grassroots action and regulatory measures, shows that a paradigm shift is underway. We must seize this moment and momentum to fix our housing systems to ensure everyone has adequate, affordable housing that preserves human dignity,” added Farha.

In Australia, in the two years following the onset of the COVID19 pandemic, median house prices rose 31%. Since the 1990s, the prices of homes have risen from 2.5 times annual household income to over six times. Australian households are among the most indebted in the world, primarily due to mortgages. Deregulation and financialization are largely to blame, according to a Per Capita study. “Between the late 1970s and the early 2000s, a series of policy changes, including monetary policy decisions, the introduction of tax rules to favour capital income and banking deregulation, combined to create a housing market skewed disproportionately to favour the investor class over owner-occupiers, and to favour owner-occupiers over renters,” says the study. For instance, the 50% capital gains tax discount has been found to have driven up property prices and benefited investors in housing. Meanwhile, the government’s focus on homeownership has made Australia’s private rental market among the least secure and more unaffordable in the developed world. Half of Australia’s renters retire in poverty compared to less than 10% of homeowners. (STUDY: Housing Affordability in Australia – by Per capita for V&F Housing Enterprise Foundation May 2022) And Homelessness on the Rise in Australia – CNN World.

Well remembered is the campaign by Airbnb that saw young singles and mums/dads trotted before members of a NSW Parliamentary Inquiry, claiming that a spare room rented short-term to holidaymakers was helping them ‘make ends meet’. Here’s just one Newcastle/Nelson Bay-based agent with 1,341 homes listed as holiday rentals.

Also well remembered, in terms of Airbnb-type rentals, is the Tenants Union of NSW’s formal advice to Parliament: “There appears to be very little impact on the vacancy rate…we acknowledge the impact the growth in short-term letting has had on communities in other parts of the world, but from our investigation the same does not appear to be true here…(and) even if Australia is the ‘most penetrated’ market, there is actually not yet so much activity on Airbnb that would impact the private rental market.”

Michael Lyon, Byron Shire Mayor – 2,577 active Airbnb rentals - suggested on social media last week: “All options need to be on the table. 3D printing of houses has virtually no waste and has been used successfully in a few places around the world…”. One reader responded: “Cant (sic) wait till they start using hempcrete.”

NSW Minister for Planning and Housing, Anthony Roberts MP, must immediately rescind Rob Stokes’ (Affordable Rental Housing) (Short-term Rental Accommodation) 2021 SEPP. Local Councils must be mandated to enforce residential planning, zoning or approval to prevent short-term commercial letting of housing. The proliferation of these properties is a huge problem for housing affordability/availability, for the living conditions of neighbouring residents and for legitimate tourism accommodation providers.


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