Views on the UN report on the financialization of housing

Link of Report here

My quick views on the United Nations Human Rights Council’s 2017 report on the financialization of housing

I don’t agree with the suggestions put forward in the report about the financialization of housing. Real estate is considered a commodity in our world which has led to people investing a lot in it which has further led to the new innovations happening in the real estate market. The report suggests that the real estate should not be treated as a commodity but rather a basic human right, but we have seen in the modern world that it is not really important to own a real estate. Anyone can simply rent a real estate without putting so much effort and money to own or maintain a real estate. Hence, people can also be given access to subsidized options for renting a home rather than owning one.

In the report, the foreclosures have been mentioned as a key reason for people losing their homes. But as seen in the aftermath of the 2008 housing recession, we get to know that majority of foreclosures does happen because of fraudulent mortgage lending and corruption in assessment during loan assessments. Hence, people who face foreclosures have to suffer from bad practices undertaken by banks and financial institutions. In the US, the Dodd-Frank act has been implemented to safeguard consumers by imposing strict measures on banks and lenders. So I think, similar acts if passed in other countries and implemented well could lead to fewer foreclosures as people will be able to borrow what they are really capable of paying and won’t lose their house.

Also, it is worth noting that a lot of foreclosures happen during the times of recession and when inflation is high which puts a lot of burden on debtors to pay their loan and hence the default. So the government needs to allow for some compensation during the tough times and allow borrowers to borrow the loans at inflation-adjusted rates like PLAM(Price Level Adjusted Mortgage) which will ease the burden to pay loans by the debtors.

Though I agree that some way has to be made so that everyone can have a roof above them but I disagree with the report to non-commoditize the real estate which won’t be the right way to solve the problem and missed the root problem of fraudulent mortgage lending. The ownership of real estate is costly as well so other routes like renting can be important way to provide housing which will be possible when real estate is commoditized and people buy multiple of them and rent out easily.

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