Why we need a political economy of housing: Part II

The Week in Housing 25/11/22

Before getting started I’d like to thank the Type collective for organizing the event at which I spoke last week, part of the Housing Unlocked exhibition (which is well worth checking out). Type’s online magazine is a great resource if you are interested in the built environment, planning and design.

Last week we looked at the explanatory potential of a political economy approach to housing. This week, we continue our discussion, this time focusing on the ‘political’ in political economy. A political economy approach has great critical potential because it denaturalises the housing market and therefore shows that the nature of the housing system is (a) a function of a particular historical constellation of political and economic processes/institutions; (b) not inevitable or immutable, but in fact subject to change; and (c) reflects specific relations of property, power and inequality.

Marxian approaches emphasize that in capitalist economies, housing is both a fundamental human need, and a market commodity which is exchanged for profit. We can use the classic Marxist idea of ‘use value’ versus ‘exchange value’ to conceptualise the tension between these two aspects of housing. Needless to say, there is often a tension between the exchange value of housing and its use value, in other words, between the fact that housing is a fundamental need which no one can do without, and at the same time a source of profit for developers and owners. Here is it is important to recognise that the exchange value of housing, indeed the very existence of housing markets, is predicated on political institutions, as it is only because of property rights, which are politically and legally underpinned, that exchange value can be realised and protected. Moreover, the politics of housing, at a fundamental level, can be understood in terms of the extent to which policy supports the exchange value of housing over and above its use value. This also draws our attention to the fact that housing systems are characterised by unequal relations of power and property ownership.

Recognizing issues of power and inequality within housing systems has one further benefit which is extremely significant: it allows us to recognise that there are conflicting interests between different cohorts or classes, and these conflicts mean that housing systems are subject to (political) change. The obvious example here, and one that is all too relevant at the moment, is between people who own residential property and people who do not. The latter have an interest in property prices falling, the former have an interest in prices rising. But there are all sorts of other contradictions and tensions that characterise housing systems, and these manifest as political and social conflicts about what type of housing system we should be aiming for, conflicts which in turn shape the realm of policy and politics.

Furthermore, recognising conflict and change not only brings into focus the politics of housing, it also recognises the agency of households. In many perspectives (including the mainstream economics approach and, in my view, social policy approaches), households are seen as mere consumers of housing who are more or less passively impacted on by housing markets/policy and simply make choices within the existing context of the housing system. In reality, households are also capable of various forms of resistance and contestation, including everyday acts of resistance (which I wrote about recently with Rachel McArdle), as well as consciously recognizing their collective interest and politically mobilizing on that basis.

Recognizing the agency of households also adds to the explanatory potential of a political economy approach because the political mobilization of households often directly shapes how housing systems develop, i.e. it can explain how housing systems develop over time and why housing systems differ in different national contexts.

The Glasgow rent strike is a great example (and the subject of this recent edited volume). One of the first historical examples of rent controls, the Increase of Rent and Mortgage Interest (War Restrictions) Act 1915 was a direct response to the tenant-led rent strikes of 1915. The context for the strikes was a population increase in Glasgow, combined with slum housing conditions for many workers and profiteering by landlords. In the Spring of 2015, many tenants in the Govan area of Glasgow refused to meet rent increases. By November, this initiative had spiraled into a situation in which as many as 25,000 tenants were on rent strike across Glasgow. The political context was also shaped by World War I as ‘the harassment and ejectment of women and children while male soldiers were at war was a central rallying point because tenants and the labour movement associated high rents with ‘unpatriotic’ war time profiteering’, as argued by Nial Gray. On November 17th, in response to the trial of  a group of rent striking workers, a large demonstration took place organised by the worker and tenant movements. The following day saw the announcement that legislation would be passed to restrict rent increases.

Rent controls, in turn, where one of the main factors which led to a decline in investment in the PRS for most of the 20th century, and indeed recent cross-national comparative research finds that this was one of the main drivers of the expansion of the social rented sector.

There are countless other examples of how political economic structure of housing systems generate conflicts which in turn shape the development of the housing system. The rent strike of Irish social housing tenants in the 1970s, for example, let to the introduction of the differential rent system, which some would argue ultimately undermined the viability and resilience of social housing.

One issue I haven’t addressed is the role of ideology in the political economy of housing - thanks to UL’s Henry Silke for highlighting the importance of this on Twitter. Henry has written about this issue here, and it is something I hope to return to in the future.

A political economy perspective thus emphasizes the unique nature of housing and the implications this has for how housing markets and political institutions interact (discussed last week), as well as for issues of inequality and power within the housing system. On the basis of these insights, political economists analyze housing by focusing on the intersection of policy and market forces in shaping housing systems, as well as paying attention to forms of inequality and power relations that divide the ‘housing haves’ from the ‘housing have nots’, and produce social and political conflicts that drive housing system change.

Events

The Raise the Roof coalition have organised a protest rally for housing this Saturday (November 26th), assembling at Parnell Square at 1pm. Threshold will launch their annual report on December 7th - I will post further details when I have them. Don’t forget to email me to let me know if you are organizing any housing related events - especially if Twitter collapses as that’s where I find out about most events!

What I’m reading

This week I thought I’d share some of my favourite readings on the political economy of housing. This article by Aalbers and Christophers is one of the best summaries. There is also this new article which summarizes a lot of the literature on political economy approaches to housing. In terms of books, Rethinking the economics of land and housing and In defense of housing are probably two of the best out there. I wrote an article looking specifically at a political economy approach to the PRS, and I co-authored this chapter on the political economy of Irish housing with Michelle Norris. If you have any good suggesting for readings on this topics please do send them on.