Tenant politics & corporate landlords
The Week in Housing 22/09/23
Tenant politics is something I have covered multiple times, and on numerous occasions I have promised myself I would not return to this topic for the foreseeable. But there always seems to be something new happening, to the extent that I am increasingly convinced that the tide of international housing politics is turning dramatically, and in ways that will shape the politics of housing in the decades ahead of us.
In the last few weeks, for example, the German SPD announced their intention to pursue tighter rent controls; the Michigan Democrats introduced a bill to repeal legislation banning rent controls and to introduce further rights for tenants; I came across this really interesting podcast about tenants in San Francisco engaging in a rent strike against a large corporate landlord; and I did some reading about the huge wave of tenant activism in Spain. In terms of rent control legislation, in addition to a number of US states and cities, the following European countries have introduced or strengthened rent controls in recent years: Spain; Ireland; Scotland; France; Germany; Netherlands (and probably more I am not aware of).
I think there are three particularly interesting things going on here that I want to tease out.
First, the issue of institutional landlords is central to what I have called the ‘new tenant politics’. Institutional landlords in many places, including, for example, Ireland and Spain, make up a relatively small part of the overall PRS stock. But they have been in the crosshairs of tenant politics more or less from the outset. Indeed, I was one of a group that organized a protest outside IRES REIT’s offices all the way back in 2017. The podcast about San Francisco mentioned above was really interesting in this regard. San Francisco recently introduced legislation that requires landlords to negotiate with tenant organizations. Tenants of institutional landlords have been coming together to demand that their landlords engage with them, as per the new legislation. But they are also introducing some novel tactics. Tenant activists argue that rent strikes have a new potential in the age of rental securitization.
Securitization is the process thorough which a regular income stream (or multiple streams) is packaged into a financial product that can be traded on markets. Rental Securitization combines the rental income streams from many tenants, and sells the right to these income streams in the form of a financial product. It is essentially the same as the notorious Mortgage Backed Securities that were central to the GFC. The owner of the asset owns the income streams, rather than the property itself. What’s interesting is that rent strikes, or even the threat of rent strikes, therefore, have a new potential to disrupt financial landlords by undermining this form of financialization (here’s another recent story of a US financial landlord that had to default on loans, partially as a result of tenant non-payment).
The rent striking tenants in the San Francisco case are also demanding the right to have an input into the sale of their building. This arises because Veritas, their landlord, has defaulted on a large loan, which has triggered the sale of many of its properties. These are obviously new strategies and tactics that correspond to the era of the financializaton of the PRS.
Spain is another case in point. Many of the most high profile tenant campaigns in Spain in recent years have focused specifically on institutional landlords, including campaigns focused on bringing together tenants in specific apartment blocks or tenants of the same landlord (see here for similar example in Ireland). For example, in January 2022 tenants of Blackstone came together across Spain to mount a specific campaign.
Spain is also interesting in relation to the second issue I want to focus on. Spanish housing policy, much like in Ireland, has dramatically changed course in recent years. In the post-GFC period, legislation was introduced to reduce tenants rights and financialize the PRS. This included shortening tenancy terms and introducing legislation to allow for the establishment of REITs (called SOCIMIs in Spain). They also had a NAMA-style ‘bad bank’ (called SAREB) which sold vast swathes of apartments to REITs, private equity firms and hedge funds. Fast forward to more recent years, and there has been legislation specifically targeting institutional landlords (introducing longer tenancy terms for tenants of larger landlords, for example), as well as the more recent and comprehensive Housing Bill that introduces rent regulation and new protections against eviction. In the political debate leading up to the introduction of this new legislation, tenants’ rights and the ‘generation rent’ discourse were paramount.
Ireland has gone on pretty much the same journey since 2012. I’ve argued that this can be characterized in terms of the shift from ‘austerity urbanism’ to ‘post-neoliberal housing’. The more time goes by, the more I am convinced of this hypothesis.
The third and final issue I want to mention is around the form of organization associated with new tenants’ movements. As I argued back in 2017, the new wave of tenants’ movements are characterised by a grassroots trade union organising approach, i.e. building up membership based organizations at a local level by responding collectively to the concrete needs of tenants (for example, supporting tenants who are being evicted, or with maintainance issues). The San Francisco tenant organisers mentioned above, for example, are inspired by the approach of Jane McAlevey, the famous grassroots trade union organiser. Another grassroots trade union organizer, Valery Alzaga, was very influential in relation to Spanish activists in the 2000s. Many of these activists built on the US ‘community organiser’ model to create the Plataforma de Afectados por La Hipoteca, the massive anti-eviction movement that developed in the wake of the GFC, and which laid the groundwork for the current wave of Tenant Unions in Spain. Jane McAleavy and the PAH visited Ireland numerous times during the period when the Irish Housing movement was developing, i.e. 2012-2016 or thereabouts, and had a big impact on the thinking of housing activists.
There’s lots more to say about the ‘new tenant politics’, and I’m sure I’ll return to the issue in the future. But one thing is clear, the direction of housing politics and policy is changing. What is not so clear, is where it is headed.
Events & News
On the 12th October the Open House Dublin festival will feature a talk by David Madden, a leading figure in the political economy of housing. There’s still time to apply for some of the Housing Agency’s Education Bursary strands. Threshold have a new campaign to stop deposit retention.
What I’m reading
A new ESRI report looks at the difference between rents for new and existing tenancies, showing rent in new tenancies is on average 15% more than existing ones. This is first piece of research using data derived from the new RTB annual registration system. Housing Europe have developed a useful briefing on tools to deal with vacant housing. The Dept. of Housing have published information on the new STAR policy (Secure Tenancy Affordable Rental Investment). It’s Budget Season, and focus Ireland’s pre-budget submission is now available here (see also their submission to the consultation on the PRS). The Housing Alliance has a new report on decarbonising social housing.