When Did Housing Become A Commodity? Let's Break It Down
Ever wonder how we went from thinking about homes as a place to live to treating them like assets or stocks to be bought, sold and traded for gain?
The Shift
Once, a house was a place where families put down roots and made memories. Now it's a financial chess piece. The transformation happened gradually, with a few key players changing the game:
- Sub-prime loans pre-2008
- Investors seeing homes as gold mines
- Wall Street discovering the potential of residential real estate
- The rise of platforms like Airbnb made short term rentals popular, leading to a 'house hacking' craze
The 2008 financial crisis was like a massive yard sale for institutional investors. Foreclosures meant cheap properties, and they took advantage of the opportunity, buying up homes faster than limited-edition sneakers. Since nearly all of the planet's habitable land is 'owned' and--as the saying goes--'they're not making any more of it,' real estate has become the ultimate limited edition item. And that's how commodification of housing took hold. Speculative investment, STR, demolition of affordable housing, 'renovictions', and small condos are all forms of housing commodification.
So what about shelter?
The availability and affordability of homes as shelter is on the decline with rising home prices and interest rates above 7%, but there are several strategies being proposed and implemented to help:
- Creating publicly owned, permanently affordable housing. Developing social housing models that prioritize long-term affordability over profit
- Limiting speculation and profit-making in the housing market by implementing policies that discourage treating housing primarily as an investment vehicle
- Bolstering community and collective ownership by supporting models like community land trusts and cooperative housing that prioritize resident control and affordability
- Investing in public and social housing. Increasing government funding for non-market housing options
- Implementing tenant protections such as strengthening rent regulations, eviction protections, and code enforcement to make real estate speculation less profitable
- Expanding supportive services such as wraparound services to residents of affordable housing to increase stability and well-being
- Changing the narrative in order to shift public perception of housing from a commodity to a public good and human right
- Federal intervention. Advocating for large-scale federal support for decommodification efforts since state and local initiatives have proven to be insufficient
- Promoting shared equity housing (housing cooperatives and community land trust models).
To effectively reverse housing commodification, a multi-faceted approach combining policy changes, funding allocation, and shifts in public perception would be necessary.
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