Category Archives: Wealth

The Plan? Wealth, Housing Need and Austerity

I have never been quite sure where it is from but I have a copy of a cartoon in my office called ‘The Plan’. In six frames it shows the ebb and flow, back and forth, of affluent and poor-black households in US cities, first changing places in the inner city and then in the suburbs. Yet research on gentrification suggests otherwise – with tens and sometimes hundreds of thousands of urban households displaced via the attention of higher-income households and investors to areas in which poorer households congregated (these are major currents of the urban politics of cities like San Francisco with debate moving from a concern with yuppies to Silicon Valley employees and rocketing house prices, or London with its influx of super-rich and international investment capital in the new-buiold apartment market). The lack of investment in such neighbourhoods, by landlords and owners, meant that properties in these locations offered a bonus dividend – invest here and prices might align themselves with higher prices elsewhere. The search for ‘gentrifiable’ properties and ‘up-and-coming’ neighbourhoods has been a key strand in the story of property wealth in the US and UK over the past twenty years. To understand gentrification is to provide a window on the otherwise closed workings of the economy and the politics of homeownership that permeates our culture today, in short – who are the winning and losing groups in society today?

the plan cartoon

The image of the affluent upping sticks and landing wherever suits them best in my cartoon may seem an unproblematic story, indeed one that is emblematic of what we have become as a flexible, location-maximising constituency of worker-homeowners. But who is this ‘we’? Some years ago I attended a policymaker forum in Melbourne convened at the onset of the global financial crisis. Here Australian Federal bank officials rationalised the story of low interest rates, arguing that they had benefited the macro-economy and the needs of ‘us’ homeowners. Well, even in Australia homeownership (like the US and UK) remains at just over two-thirds of households so it is not the embracing form of ‘we’ that we might want to refer to (data analysis on our project on London’s supe-rich shows that owner occupation has declined from 56% of households to 50%, the big gains going to owner-investor landlords benefitting from a rise in private renting from 17 to 26%). In all of this the self-identified role of many politicians and public bankers has been legitimated through reference to keeping things rolling nicely for ‘us’. Indeed those who would like to join ‘us’, aspirational owners seeking to get on that ladder of wealth creation and relative personal security, are also critical to understanding a large part of the banking/housing crisis – asset values rose because the architectures of the state and private finance were fundamentally aligned to fulfil the desire of existing and prospective homeowners, even as this project generated the basis for the current catastrophe as low income owners and their debt poisoned the new products built upon them.

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‘Cherish Public Housing’ – Poster on HK train.

As David Harvey (1) has eloquently argued, the crisis was underpinned by the ‘fix’ needed by capitalism to expand after ‘local’ supplies of labour and opportunity diminished. As labour and commodities came to be supplied more cheaply by countries like China and India a further stage of expansion could only be effectively generated by allowing consumers, many of them not at all well-off, to become indebted over increasing timeframes and using new products in ‘sub-prime’ deals, offered to millions of low-income households in the US. With the house of cards that this situation created now very much collapsed the costs, we were told, should not be borne by these financial institutions and, under an increasingly transparent ideological project, continue to be tackled through cutting the cost of public services. Critically, one of the many manifest outcomes of these cuts will be the way that the state provision and particular geography of public and private rental housing in major cities like London. Three key issues can be identified that need to be understood to make sense of what now appears to be happening to public housing and, by extension, to poorer households in our cities:

  1. The sense that public housing is a tarnished state project that is so stigmatised in the public eye and its households so economically marginal that reducing its costs is deemed politically desirable (by making conditions so bad that others are not inclined to want to use such services) and fiscally commonsense;
  2. Public housing, in its ‘estate’ form, represents an opportunity to contain the mad, bad and sad in spaces that can be policed and monitored by a punitive welfare regime that sees benefit uptake as a kind of deviance (literally not that which ‘normal’ or included society does) – demolition and the thinning-out of such pockets is seen as desirable and will make way for new rounds of capital investment and opportunities for international capital and high income households, and;
  3. The concentration of economic losers and social stress in public housing generates risks to included society (such as through criminality and anti-social behaviour) that higher-income groups seek to avoid by using housing and schooling systems as a means of insulating themselves from the risk of contact with poorer households (the ‘dinner party test’ is useful in establishing such practises – good schools are identified not through academic merit so much as by the ‘kind’ of children that go there, academic performance can then be used as a proxy measure for the social composition of schools).

This social, political and economic context has helped soften-up public housing for the onslaught of the current political regime. Housing benefit in the private rental sector has been capped and rents in public housing have moved closer to (up to 80%) of market rents where possible. These plans bring us back to the low status of public housing assistance in the UK. However, these new interventions should not only be attacked because they will not work and will displace poorer households, rather they should also be understood as the products of ideas and values shaped by affluent interests and lifestyles. These values are generated by the sheltered personal biographies and daily spatial pathways of policymakers who have little experience of such conditions or the impact of their proposals. Indeed our political elite are active in a process of insulating themselves; both from the risks generated by the social exclusion derived from the cuts themselves, and from paying for the current predicament. The callousness of political priorities is generated by the social pathways and deeper class interests of the wider spectrum of political elites who, for them and the constituencies they represent, refuse to allow the prospect that recent decades of massive wealth generation should be clawed-back, taxed or otherwise captured to tackle the crisis and re-build municipal and civic facilities.

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A front page from The Observer (2) brings fifty years of research on gentrification and its impact on the urban poor to the forefront of debates about the changes that will result from government commitments to erode the security of public and private tenants. Many will be displaced from high-cost neighbourhoods and, as Saskia Sassen (3) has recently argued, provide golden opportunities for accumulation by a locked-out aspirational class of prospective homeowners who so want homes at affordable prices in places that will be seen as the investment and gentrification hotspots of the future. While some commentators were aggrieved at earlier government ‘plans’ to engender local social mix as a form of gentrification in fact this plan appears to be something much more emphatically ambitious – deploying a crisis of capitalism as an opportunity to displace the poorer and middle classes and benefit investors (in much the same way that Naomi Klein (4) has described as endemic feature of our economic system). What is even more remarkable about the socially constructed parameters of current debate is that many of us have ingested the logic of cuts and requirements of corporate capital and attacking each other as the illegitimate beneficiaries of bloated state expenditure. This discursive race to the bottom of social insecurities and labour-market flexibilities will simultaneously provision a spatial switch as low-paid workers and benefit recipients make way for higher income tenants (in public and private rental accommodation) and owners (taking advantage of sales of repossessed housing). Cities like London will be for the rich, its hinterlands for a subsistence poor desperate to take work on almost any conditions in lieu of the assurances of the state (the argument that the private sector will not be capable of substituting for public employment is logical, yet we can see how highly indebted and insecure households may yet make abundant, cheap and flexible labourers for it).

There is something almost awe-inspiring in the scale of subterfuge on offer. Unashamed by their inability to predict or counter the excesses and collapse of the system many economists continue to debate and determine the direction of cuts, rather than their need. Instead of building common assurances and securities through a state that is seen as the product of a leviathan built of ‘us’ there remains massive cultural investment in a discourse of self-interest and wealth accumulation as the vehicle to personal welfare and insecurity from economic risks. This bind between property wealth and politics perhaps helps to explain the more muted response to cuts so far in the UK when compared with other countries, yet it is unlikely that so extensive a roadmap will not radicalise a much broader range of social groups and interests.

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Those spaces likely to be more resilient to a possible second economic downturn are inhabited by the lifeblood of political authority and planning today. For these groups their daily spatial circuits and friendships rarely cross with those who will see the social catastrophe and toxicity that will be sewn into many such localities for years to come (often on already lengthy histories of economic marginality and community decline). Political life has, whether it is of the left or right, largely failed to prevent the excesses of corporate-political agendas seeking the bottoming-out of wages and social benefits – for many people it is not at all clear how to respond or articulate an effective response that might challenge such alienating projects. It has also palpably failed to reduce inequalities in ways that might bring fairness and safety from the harms generated by economic secondaryness. The horrorshow of child neglect, para-criminal ambition as substitutes for legitimate careers, anti-social behaviour, incivility and the death of personal fulfilment via secure modes of work and community life will be the inter-generational gift of the ongoing plans of our political establishment.

This is an extended and updated version of a piece that first appeared as ‘Cities for the Rich’ in Le Monde Diplomatique.

Sources

  1. Harvey, D. (2010) The Enigma of Capital and the Crises of Capitalism, Profile Books.
  2. http://www.guardian.co.uk/politics/2010/oct/24/exodus-poor-families-from-london
  3. Sassen, S. (2010) A Savage Sorting of Winners and Losers: Contemporary Versions of Primitive Accumulation, Globalizations, 7, ½, pp. 23-50.
  4. Klein, N. (2008) The Shock Doctrine: The Rise of Disaster Capitalism, London: Penguin.

The barbarian manifestos

All of the major political parties operate with barbarian manifestos, all appear to represent (either through ideological fervour or the game of second-guessing what ‘we’, the electorate, apparently want) the needs of capital, private interests via the selling-off of public assets (the NHS, public spaces, security, hospitals, schools, the post office). This politically mediated theft has been pursued in lieu of a more progressive agenda that might begin to target the staggering wealth of the very few globally and nationally, and the protection of that wealth by seeking cuts to publicly funded projects and programmes instead of personal or corporate wealth. All of this arguably makes this it an easy time to be a housing or urban policy analyst since there isn’t much going on except for persistent thinking about what to do with very little or no money.

The great triumph of Big Society thinking is that deep down there are indeed many people who believe communities, rather than these kinds of government, can do a better job. So there is a real need for urban, housing and social studies to be premised more firmly on equitable forms of taxation and resourcing, instead of austerity. Despite the massive popularity of thinkers like David Harvey and Thomas Piketty we appear to have not produced either a key thought leader or mainstream set of principles capable of advancing such goals. Attempting to face-down the prospect of being portrayed as radical for stepping outside the narrow boundaries of political thinking set by government and conventional news media is a hard prospect indeed. We need to adopt an unblinking fearlessness to such views however; based on the raft of data and analysis globally that points to the condensation of wealth, the social disaster of austerity and the pursuit of short-term gains by various elites. The very moderate arguments for municipal, public and shared forms of provision and infrastructure also need to be part of such arguments. If we want to discuss problems like housing provision, health and our welfare we will need to start with prescriptions that do not start by tinkering with less resource, contracting-out or other substitutes – we need to state up-front that there is a cost and, indeed, that we as a community can bare such costs given our combined wealth. Unfortunately this position has been eschewed by many on the political left, while the media has ignored or viewed as risible those asking for tax justice. In this sense those who work to such principles are seen to be asking for the world, or as fantasists not facing-down the reality of budget deficits – even while we know that even a handful of billionaires could wipe-out poverty world-wide. Positions of corporate and individual wealth, so carefully and constructively attacked by Piketty’s detailed empirical analysis, need to be challenged or they are increasingly likely to be shamed to action by a more vocal public no longer willing to tolerate their disproportionate take, all the while aided by a subconsciously compliant political class. I doubt it is only me that feels these points are so glaringly obvious, just as they appear to be so clearly off the map of current political leadership and action.