The practice of treating precious housing stock as a mere commodity for speculative investment, rather than as a critical social good needed to fulfill a human rights guarantee, has run rampant in many places in the world.
This was a key message delivered at the 29 June discussion the International Commission of Jurists (ICJ) hosted with ICJ Commissioner, Leilani Farha (Canada), on the impact of the financialization of housing on the right to adequate housing.
The financialization of housing is a global phenomenon that often pushes lower-income and marginalized communities out of their housing and limits access to affordable housing, particularly in urban areas.
The conversation, which was live-streamed and remains available for viewing online, features Commissioner Farha, who is the current Global Director of The Shift and former United Nations Special Rapporteur on the right to adequate housing.
Emphasizing the importance of the focus on the right to housing in the present context, Commissioner Farha commented:
“I happen to work in the area of housing, which as far as social and economic rights go, is very fundamental. It’s tantamount to the right to life in the ICCPR. They are parallel rights as we know that without housing, the right to life is jeopardized.”
The financialization of housing refers to a now well-documented process whereby actors with large amounts of money, such as private equity firms, use housing as a financial instrument for profit. This drives up the price of housing, making it unaffordable, while providing no social utility. The practice frequently results in tenants, sometimes entire communities and families, being pushed out of their homes which are converted into expensive rentals to make a profit, while other properties remain vacant as investments.
“The way I define it is where housing is used principally as a financial instrument, a tool, a place to park, grow, leverage, and hide capital, but unprecedented amounts of capital,” Commissioner Farha explained.
Farha is now the Global Director of The Shift, a non-governmental organization that was born out of the Commissioner’s work as a UN Special Rapporteur on the right to adequate housing. The Shift employs a human rights framework in its global efforts to ensure that all people have access to housing. Commenting on her time as Special Rapporteur and her transition to The Shift, Farha noted:
“I knew early on that we needed more than just a Rapporteur, more than domestic organizations. We needed a kind of global movement, and through that mandate, the idea caught on.”
At the beginning of June 2022, The Shift published a set of principles on the right to housing titled “The Shift Directives: From Financialized to Human Rights-Based Housing”, which, drawing on international human rights law and standards, seeks to provide a framework for governments and investors to effectively address financialized housing and comply with their obligations in terms of the right to housing.
Commissioner Farha explained: “We view the Directives as conversation starters – provocative conversation starters. There’s no easy fix here. We are very clear that governments have to do more, and they have to lead, and that investors have to understand that they are engaged in an area that is a human right. That is going to affect how they conduct their businesses. It must affect how they conduct their businesses. If they can’t abide by human rights, perhaps they should leave the sector.”
Watch a recording of the discussion below:
The Shift Directives on the Financialization of Housing are available here.
Listen to Commissioner Farha’s podcast, “Pushback Talks”, which focuses on the global housing crisis, here.