The housing crisis is widespread and severe. It stems from a variety of intertwined factors, including limited supply, urbanization, changes in household structure, the weakening role of public and social housing, energy challenges, and the impact of tourism and short-term rentals. One of the most significant factors, however, is financial speculation and commodification. In other words, the issue of housing is deeply entangled with the global economic order.
After World War II, industrialized states financed large-scale public housing projects. The advent of neoliberal capitalism in the 1970s, however, paved the way for privatization, deregulation, and the free flow of capital—a shift facilitated by the suspension of the U.S. dollar’s convertibility into gold in 1971. The role of the state in market affairs diminished; former public housing was sold to tenants through mortgages, and private actors assumed primary responsibility for new construction. In this process, housing shifted from being treated as a public good to being valued as a financial asset. Responsibility for securing shelter moved from the state to the individual repaying a mortgage.
This system has had severe consequences. Rising prices and easy credit concealed growing inequalities. Household debt soon outpaced income, inflating housing markets and contributing to the 2008 financial crash, which left millions jobless or homeless. In its aftermath, governments tightened mortgage regulations: stricter lending rules reduced systemic risk but also limited access to credit for many.
What can be done in response? To counter market pressures, governments can adopt top-down measures (see below) or invest in participatory and community-led housing, thereby supporting the well-being, prosperity, and resilience of local communities. Bottom-up initiatives rooted in collective self-organization can articulate alternatives and act as strong partners to public institutions.
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