In Defense of Housing

Summary, part 1

Against the Commodification of Housing

In this chapter, the authors define commodification as the process through which something’s economic value comes to dominate its other uses. They describe the political and economic history of how housing became commodified and explain how the hypercommodification of housing is responsible for accelerating the modern housing crisis. 

The history of housing commodification centers on the understanding that 1) housing has not always been treated as a commodity and 2) the privatization of the common space was necessary to begin commodifying housing. Early privatization began with landmark events like the land seizures of the European enclosure movement and continued with the colonial destruction of systems of indigenous land ownership. Another key step towards commodification was the separation of the dwelling and the workplace, which began in the 19th century as more urban Western working-class people began working outside the home. The new urban patterns created by industrial capitalism were notably racially and class segregated. As these new crises began to emerge, so did the state interference in the housing market in the form of new regulations and social housing. The Great Depression in the United States (which the authors credit with creating the modern housing system) saw the creation of the standardized mortgage and the postwar boom witnessed “the American Dream” with an increase in widespread homeownership. 

This history brings us to housing’s current state of hypercommodification, a phenomenon that describes how all structures of housing (material, legal, etc.) have become commodified, making housing a central part of the economy. Three key factors enable hypercommodification:

1. Deregulation: Especially in the US, the gutting of financial regulation laws has enabled competitive mortgage markets, affected rent control, and opened the door for predatory lending practices that take advantage of borrowers. Because of this, soaring rents and declining investment in public housing have become hallmarks of the modern housing system.

2. Financialization: The role of managers, bankers, and other people who profit from the buying and selling of housing has increased dramatically in recent history. The financialization of housing has enabled large corporate finance companies like JPM Chase and others to wield a great amount of influence over the housing market and real estate.

3. Globalization: The globalized nature of the current housing system has enabled global economic networks to control much of the market. Foreign investment in US real estate companies jumped from $2 billion in 1973 to $50 billion in 2002 (p. 34-35). The globalization of housing demonstrates how the issue is becoming increasingly divorced from residential needs.

The authors highlight two key effects of hypercommodification as two sides of the same political-economic coin: the increase in luxury real estate and gentrification. Luxury housing, which often benefits from public subsidies, not only serves primarily as a source of profit for the ultra-wealthy, but also is fundamentally disinterested in the impact it makes on a community, allowing the super-wealthy to avoid encounters with “poverty and difference” (p. 38). Gentrification, the development of low-income areas for new, wealthy inhabitants, not only causes raises in rent, but also displaces lower-income tenants. 

Because of these issues, deregulation that allows luxury housing and gentrification to flourish is ultimately not effective in addressing the housing crisis. When housing construction booms, there is no corresponding cost drop. Additionally, as the thesis of the text argues, the state-created housing market is inherently political and requires political action to solve. The current global, financialized nature of housing means that the prices of an unregulated market would still be divorced from social needs.

Residential Alienation

In this chapter, the authors examine the concept of residential alienation—the personal and psychosocial effects of the housing crisis—to make the case for a revolutionized housing system that centers on security and stability as the central purposes of dwelling spaces. They ultimately argue that residential alienation must be understood as a product of inequality and the hypercommodification of housing. 

Marx used the concept of alienation to describe the way that exploited workers experience “their time and their bodies as someone else’s property” (p. 57). Similarly, because remote and powerful actors like landlords and corporations have exploited the housing market for their own gain, households are left feeling powerless when it comes to making their own decisions.

The concept of ontological security, first proposed by psychiatrist R.D. Laing, is central to residential alienation. Because this concept describes an “emotional foundation that allows us to feel at ease in our environment,” the feeling of ontological security is far from universal, as the conditions it is predicated on—access to a living space, class position, domestic economy, and legal protections—are not accessible to all dwellers. The authors make a point to note that property ownership is not necessarily guaranteed protection against alienation. Although politicians have championed private homeownership as the model of stability, countless other factors like foreclosure, mortgages, and the owner’s relationship to other social conditions like public safety and social security can cause a sense of alienation. Most critically, the buying and selling of homes is still a commodified process.

Although residential alienation describes a psychosocial phenomenon, the exploitation of dwellers has severe, concrete effects. To illustrate this, the authors offer examples such as mass evictions in areas where major events or construction have taken place and the trend of foreclosures across the United States. Countless case studies reveal that the experience of losing one’s home can lead to severe mental health issues and feelings of instability. Homelessness, which the authors describe as a clear product of a system that prioritizes profit over security, can be understood as an extreme form of alienation. Furthermore, social stigma directed at the homeless or the impoverished in precarious housing situations can amplify feelings of alienation.

The authors end this chapter by positing that a “truly humane housing system would measure its success or failure not in home prices or the number of mega-mansions but in the extent to which the residential good life is actually provided for everyone” (p. 82). They argue that to bring about a condition of disalienation, we should strive to ensure security for all dwellers.