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In Defense of Housing

by Isla Pawson on June 8, 2017

There are few issues that capture the level of public and scholarly interest that housing does today. Housing, many are aware, was a central cog in the defective system that produced the Global Financial Crisis, and has since remained at the forefront of political debate throughout the developed world. Housing crises are integral features of the world’s most advanced urban centres, presenting visible challenges to ‘liveability’ indices and the notion of sustainable economic growth. Yet, as scholars have pointed out, housing has yet to occupy a key space in political economy, with issues often treated as mere expressions of broader trends like inequality.

Against this backdrop, David Madden and Peter Marcuse’s book In Defense of Housing is a seminal contribution to the political economy of housing. For them, ‘posing the housing question today means uncovering the connections between societal power and the residential experience’, and ‘questioning the function of housing within globalized neoliberal capitalism’. The conceptual points of their book are developed from evidence of the housing experience in New York, but they hold important implications for understanding housing throughout the developed world.

While many scholars have highlighted the problematic role of investment in the housing sphere, they have often implied that this is a consequence of ‘market fundamentalism’, or the ‘subtraction’ of the state from the housing market. In contrast, Madden and Marcuse articulate a highly sophisticated understanding of the ‘commodification of housing’- in which ‘a structure’s function as real estate takes precedence over its usefulness as a place to live’ – a process underpinned by the active role of the state and accelerated through a trio of ‘deregulation’, ‘financialisation’ and ‘globalisation’. The ‘deregulation of home finance’ involved the ‘gutting’ of mortgage market regulation, giving rise to the ‘predatory lending’ many know today as a faulty organ buried within the US economy that produced sickly consequences on a global scale in 2007-8. At the same time, they convincingly explain that the ongoing centrality of states to the production of housing markets – through the enforcement of private property, the maintenance and often unconditional protection of the financial system through bail-out – means that we cannot categorise commodification as a simple product of ‘free market’ doctrine. For Madden and Marcuse, ‘the commodification of housing is a political project that refuses to acknowledge itself as such’.

This argument is strengthened by the substance of Madden and Marcuse’s work, who make a serious effort to explain how social and cultural institutions underpin the process of commodification. Indeed, the power of commodification is arguably rooted in the culture of consumer capitalism and the widespread phenomenon of home ownership – as either a reality or an aspiration. This is particularly relevant to Australia where the cult of home ownership has occupied a key place in the national mythology since Federation in 1901. Even the Communist Party of Australia has supported home ownership, arguing in the 1950s that ‘ownership of property, for the purpose of extracting a profit out of others causes injustice, but not the ownership of property for one’s own use’ – a far-cry from ‘all property is theft’. For Madden and Marcuse, home ownership is an impediment to reclaiming affordable housing as a basic right for all because it weaves an unlikely and unfortunate alliance between the real estate industry and homeowners. The ‘threat of falling property values’ can be used to present the interests of these two groups as synonymous, giving ‘homeowners an economic stake in maintaining scarcity and sustaining the housing crisis’.  As John Howard noted in 2003, ‘I don’t get people stopping me in the street and saying “John, you’re outrageous, under your government the value of my house has increased”’. More recently, the durability of negative gearing and capital gains tax concessions reflect the fact that the investment interests of homeowners butt up against the aspiration of secure and adequate tenure for all, complicating political responses to housing (un)affordability.

It is for similar reasons that Madden and Marcuse have such a gripe with ‘inclusionary zoning’, which they frame as a device for legitimating an inherently unequal system of housing distribution. The basic idea of ‘inclusionary zoning’, the authors write, ‘is that in exchange for the right to build more market-rate housing than would be allowed under existing zoning law, private developers agree to construct some number of nominally “affordable” units as well’. Like the effects of a cultural affinity for home ownership, Madden and Marcuse see this as providing a social justification for private interests, without tackling the root cause of the problem that is the ongoing process of commodification. It is true that this is one – largely inescapable – implication of inclusionary zoning. Yet the haste with which Madden and Marcuse discredit the potential benefits of such a policy does, perhaps, act to strip socially-minded practitioners of credible tools for improving housing affordability, at least in the short run.

The obstinate nature of this position reflects Madden and Marcuse’s broader commitment to dismantling all aspects of the system of commodification in a truly transformative manner, that bears little resemblance to the gradual and reformist character of housing movements today.  Their final chapter sketches the history of housing movements in New York and their indispensable role in resisting the commodification of housing and securing the rights of tenants. The authors argue that this history illuminates the potential power of a housing movement fought on a broader scale and based upon a deeper consciousness of the centrality of housing problems to urban development. In turn, drawing on Henri Lefebvre’s theory of the urban politics of the inhabitant – or ‘urban inhabitant’ – the authors argue that housing unites the distinct concerns of many vulnerable or disadvantaged social groups, such as the poor, women, and diverse racial minorities. This, they argue, provides the potential social basis for securing a ‘radical right to housing’ that challenges the logic of commodification and reclaims housing as a basic right for all.

I agree with Madden and Marcuse that a better housing system is possible, and that it will be achieved through the shared struggle of diverse social groups and institutions. But their focus on the politics of crisis, in abstraction from the situation of housing within broader economic trends, means that the barriers to this process are not fully explained. For the authors, commodification is the product of political choices that are underwritten by the economic influence of the real estate industry and its associated political power. But I would have expected to see the contributions of David Harvey, or even J.M. Keynes, as ways to explain the trend towards accumulation through housing more fully – not only as a political bargaining chip, but the result of structural tendencies embedded in the economic system. For Harvey, housing is a ‘spatial fix’ to the accumulation problems facing capitalist states, serving as a site for the reinvestment of surplus value. For Keynes, the conditions of uncertainty that are endemic to the macroeconomy make the investment cycle inherently unstable. As a result, private investment may be channelled into unproductive real estate rather than the creation of new assets – unless corrected through the expansion of public spending. Indeed, the Chief Executive Officer (CEO) of the Committee for Sydney recently argued that Australia’s housing affordability problems are best understood ‘as a problem of asset price inflation due to excess liquidity and leverage flushing around the globe’.

Neither Harvey nor Keynes applied these theories in any consistent way to the specific issue of housing affordability, but it would seem to me that they contain important insights for a study that situates the housing crisis within the contemporary political economy. If anything, these points highlight the importance of Madden and Marcuse’s book as a catalyst for debate and the basis for a more conceptually adequate understanding of housing today. If Marcuse has anything like the scholarly impact of his father, this is well within the bounds of possibility.

Isla Pawson

Isla Pawson graduated with First Class Honours and the University Medal in Political Economy from the University of Sydney. She is also the recipient of the 2017 Journal of Australian Political Economy ‘Young Scholar’ Award through which she is continuing her research into the political economy of housing, alongside working as a Research Associate in both the Sydney Business School and Faculty of Arts and Social Sciences.

2 Comments
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  • June 11, 2017 at 11:56 pm

    You might enjoy the commentary in Endnotes 2 (April 2010), specifically the essay “Notes on the New Housing Question”: https://endnotes.org.uk/issues/2. You can access the issues and essays all online through that link. I have a hardcopy of all four issues, so far, including a duplicate set for lending.

  • Keith Jacobs
    June 13, 2017 at 7:20 pm

    Congratulations Isla on a fantastic book review. I had the opportunity to read your thesis which was most impressive. I look forward to reading more of your work on housing.

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