Exploitative rents make the case for promoting home ownership

It's funny how reading something from a couple of Marxist sociologists reminds me of the value of property ownership. Here's their shtick:

It is a mistake, Desmond and Wilmers argue, to see slums as a byproduct of the modern city, rundown areas that occur by accident. Instead, they contend that the slum has long been a “prime moneymaker” for those who profit from land scarcity, racial segregation, and deferred maintenance. “If labor exploitation is understood to be getting paid less than the market value of what one produces,” they write, “we can extend this definition to the housing market by operationalizing exploitation as being overcharged relative to the market value of what one purchases, paying more for less.”

Now I think that we need to be careful here in defining a slum - there's a big difference between the slums in developing world cities and those in the developed world. Desmond and Wilmers are talking about the latter - for the former, the most common issue isn't landlordism but rather that land is occupied informally, the slum-dwellers are squatters.

For the developed world city, however, the run-down inner city area dominated by poor quality rented housing should be seen as a failure. And, while it is most commonly used as an argument for more municipal or social housing, it is also a strong argument for seeking more home ownership.

Desmond and Wilmers observe:

“Renters in poor neighborhoods are excluded from both home ownership and apartments in middle-class communities on account of their poverty, poor credit, eviction, or conviction history, or race (through discrimination).” Ultimately, they conclude, “renters are exposed to exploitation on account of their reliance on housing and their lack of options for securing it.”

Renting becomes a trap rather than, as we'd come to view it, a temporary circumstance. We should consider ways to encourage and promote home ownership as well as in protecting tenants. This might include longer tenure (not permanency but longer than the typical short-hold arrangement), giving tenants a first option when landlords sell property, extending right-to-buy, and support for co-operative or other forms of social ownership.

The other side of the equation is housing supply and, as well as allowing more development, we should consider specific support for self-build - perhaps by giving people low-cost ground rents on development plots. Some of this might simply mean more trailer parks but these, at least, offer more security than a tatty apartment with exploitative rents.

Desmond and Wilmers see the problem as systemic (in a Marxist sense, a feature of capitalism) but we might also see it as a consequence of the legal and regulatory framework in which housing markets operate. Whatever the cause, there is a strong case for, alongside social housing, the development of models allowing more people from lower income groups to own their own homes.

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