![\"property_ladder\"](\"http:\/\/mananews.co.nz\/wp\/wp-content\/uploads\/2015\/01\/property_ladder.jpg\")
<\/a><\/p>\nBy any measure, the housing market in Auckland is overheated.\u00a0 Thousands of Kiwi first home buyers are being forced out by Speculators looking for a way to trade printed\u00a0 money for physical assets.\u00a0 New Zealanders are witnessing the effects of the quantitative easing \u201ctsunami\u201d washing up on our shores.\u00a0 Some see this as an opportunity, a rising tide.\u00a0 But all tides must eventually turn, and when this one does, the Working Class will watch helplessly as all prospects of ever enjoying housing security will be washed out to sea.<\/p>\n
Ordinary home owners have to work for their money, and they pay significantly more than the 0% interest rates offered to Wall Street insiders. New Zealand has one of the most open housing markets in the world.\u00a0 Unlike Greece, Mexico, China and even Australia, where it is difficult for foreigners to buy houses without meeting stringent requirements, foreigners can buy New Zealand residential property over the phone, so long as they are prepared to do a little paperwork afterward. Additionally, there is no Capital Gains Tax, and no limitation on the number of properties that can be owned.\u00a0 Because of this, New Zealand homes are bought and sold on the global market, exposed to the chill winds of international arbitrage.<\/p>\n
Competition from overseas buyers has only served to stoke the enthusiasm of local speculators.\u00a0 There is a seemingly inexhaustible supply of money for lending through our foreign-owned banks.\u00a0 Unfortunately, money borrowed overseas for local property purchases must be repaid overseas, with interest, creating generational problems in our balance of payments. Rising house prices beggar the nation.\u00a0 Our children will be forced to repay these loans by surrendering all the wealth built up by their parents, without ever getting the enjoyment of it.\u00a0 Interest on loans based on inflated property valuations is \u201cmagic money\u201d, created at the stroke of a pen, but it must be repaid in money earned by real work.\u00a0 This is how International Banking works, or rather, how you work for International Banking.<\/p>\n
This situation could be alleviated with legislation designed to cool off speculation, but no such legislation is even contemplated at this time.\u00a0 The \u201cHousing Accord\u201d purports to have built thousands of houses, but there is little evidence of this; the median price for an Auckland home has just passed $700k.\u00a0 Labor and National together have almost identical do-little policies, proving once again that New Zealand has had what amounts to a One Party political system since 1984.<\/p>\n
This forment of market activity over the last 30 years has been hailed as a resurgence of \u201ccapitalism\u201d after the long years of the New Deal era.\u00a0 However, collecting rental properties is not genuine capitalist investment, as no real surplus value is created in the form of new goods and services, except where new housing stock is built.\u00a0 \u201cRents\u201d collected are not production, they are transfers. The \u201cRentier Economy\u201d simply churns property, while producing little economic growth. This is because houses are homes, not businesses or factories.\u00a0 A residential property is not a \u201cmeans of production\u201d.\u00a0 Even the Real Estate service sector actually produces nothing –\u00a0 it and the banking sector with it are essentially economic \u201cdrag\u201d.<\/p>\n
Once we clear away the brain-fogging hype of property marketeers, what we have at the base of everything is the honest urge to live securely in a healthy, stable home.\u00a0 Whether it is by renting or buying matters little, it is security that is at issue.\u00a0 The dream is to live somewhere safe and secure for long enough to accomplish one’s real life-goals; the raising of children, the creation of community and the actualisation of self.<\/p>\n
Americans know all about this;\u00a0 Americans once confronted property speculation in their cities with implacable collective action.\u00a0 Unable to compete with speculators, many workers revolted, and won what is now known as \u201cRent Control\u201d.\u00a0 In San Francisco, and in New York, two famous Rent Control cities that could hardly be called \u201cBastions of Communism\u201d, many tenants enjoy lifelong right of occupation in rented homes, with no rent increases.\u00a0 Ever.\u00a0 They are as secure in their homes as if they effectively owned them.\u00a0 And while some of the controls have been eroded over time, many tenants in Rent Controlled properties have continued under these agreements for decades, paying the same rents they paid in the 1980s when they first moved in.<\/p>\n
Despite the dire predictions of many, San Francisco did not fall into the ocean, the rich of the city were not strung up from lamp posts, and indeed the property market in San Francisco remains the picture of health.\u00a0 If you have the money, mortgage free, you can buy whole apartment buildings, happily and securely tenanted, with predictable rental returns sufficient to pay property taxes and reasonable maintenance.\u00a0 But what you can’t do is buy buildings wholesale using mortgage debt;\u00a0 the rents won’t cover the loan repayments, and that is actually by design.<\/p>\n
Why are even the rich of San Francisco happy with Rent Control?\u00a0 Because the beast Speculation was stopped from devouring the people who made the city what it was.\u00a0 Rent Control preserved the quality of life and the character of the city.\u00a0 San Francisco is in many respects a much more liveable city than Auckland, and this is directly attributable to the longevity and stability of its residents.\u00a0 San Franciscans looked at where they lived, on a narrow harbour peninsula not too different from Auckland, and realised that urban growth was something they did not want.\u00a0 Today, San Francisco is a colourful, low-rise city, made up mostly of homes and apartments.\u00a0 There are very few high-rise towers.\u00a0 When you are in San Francisco, you know it, you are not confused by the globalist homogeneity that characterises most of the world’s major city centres.\u00a0 Rather, throughout San Francisco, vibrant communities thrive, producing culture, the arts, music, theatre, political engagement, generating a stable tax base for the city administration.\u00a0 Even low-paid workers are able to spend and contribute to the economy, because of their improved purchasing power.\u00a0 Only in areas where residential tenancy is short-term and unstable, as it is near the Tenderloin do San Franciscans see serious crime.<\/p>\n
It is time to introduce Rent Control in Auckland.\u00a0 Auckland needs to learn how to create urban community, similar to that found in San Francisco and New York.\u00a0 This cannot be done while tenants are kept in a constant state of precarity and farmed for rent like battery hens.\u00a0 If the city of Auckland does not correct itself, it risks becoming an urban desert or worse. Auckland is headed toward a sterile future, resembling inner London, where social policies which favour rich property speculators have created gleaming towers of empty apartments devoid of genuine cultural life and the diversity that goes with it.\u00a0 The urban working poor who created the \u201cSwinging London\u201d that fostered the likes of David Bowie, the Rolling Stones and of course, the Beatles are gone now. The hoard of grasping Trust Babies, Sloan Rangers or Princeling-Brats are no replacement; they have cash, but create nothing.<\/p>\n
As important as cultural arguments are, there are serious issues which make Rent Control especially urgent.\u00a0 Workers need action now on housing security.\u00a0 If gleaming sterility was the worst that could happen, we could bear it.\u00a0 But those soul-less towers in London are surrounded by a growing-thing to be dreaded; \u201cThe Favela\u201d. You will never see the \u201cFavela\u201d mentioned in any of Auckland Council’s glossy brochures.\u00a0 But it is definitely there, if you look beyond the sunny scenes of face-painted children and cardboard carnival attractions.\u00a0 It is conspicuous by its absence to those who actually live in the city and know of its existence. \u201cFavela\u201d is the Portuguese word for the massive super-slums growing up around most of the super-cities around the world, like Rio, New Delhi and Mexico City.\u00a0 Favela’s are populated by workers surviving off of the refuse of the gleaming precincts at the centre of their sprawl.\u00a0 Its inhabitants service the sprawl, and subsist on it.<\/p>\n
In his outstanding book, \u201cPlanet of the Slums,\u201d Mike Davis explains how \u201cLandlordism\u201d is the spine of the Favela, running from top to bottom, preventing anyone in its clutches from ever escaping.\u00a0 A towering chain of property rights and sub-leases create a grubby aristocracy linking penthouses at the top to the local Patron collecting rag-bags for rent at the bottom.\u00a0 The residents of the Favela must pay rent to sleep and eat, even if the space they rent is barely enough to lay down in.\u00a0 Rents of more than half of all earnings are common.\u00a0 And flowing upward, ever upward, billions of tributaries tinged with blood converge to make a mighty river running uninterrupted from leachate pond to presidential palace.<\/p>\n
The most horrifying aspect of the Favela that Davis describes is the impossibility of escape or any hope of returning to one’s former prosperity, once entered.\u00a0 Without a safety net, even traditionally stable middle class public servants and well-educated professionals can trip and fall into the maw.\u00a0 New residents are immediately and mercilessly exploited by landlords sub-leasing space in dangerous shacks perched on the smoking slopes of the toxic waste-dump where they will likely spend the rest of their short unhappy lives.\u00a0 In this hell, there is no leisure, no saving for emergencies, no chance to get clean or relax, as each day leaves you with just enough money to begin the next day at zero again.
\nThis process has already begun in New Zealand.\u00a0 There are thousands of workers who live like this, unsuspected, in our city.\u00a0 They sleep 5 to a room, and wash at work, making just enough money for bus fare to and from the mouldy rooms they rent from their exploiters.\u00a0 We are barely cognisant of them when they serve us.<\/p>\n
What was once unimaginable is now an alarming reality on the streets of Auckland. Uncontrolled residential property speculation and uncontrolled rents are the fuel for the fire in the Favela.\u00a0 It is not the evidence of third-world conditions, but the precarity of the workers and the degree of their exploitation which is at issue.\u00a0 The Favella exists all around us.\u00a0 The accelerating mass-migration of workers to the outskirts, and their subsequent disproportionately high rents indicates the trend.
\nWhat drives people into the Favella?\u00a0 It is the inability to pay rent which causes the inexorable slide, forcing people lower and lower into the depths.\u00a0 As more workers slide into the Favela, the Favela becomes a self-sustaining vortex, pulling more and more people into it, as its edges blur, converge and intrude on us all.\u00a0 Once the Favela takes hold, it becomes permanent \u2013 not even fire, or regular surging invasions by police can touch it. Auckland may be years away from seeing slums like Rio, but by that time, but that is more due to differences in scale and initial conditions \u2013 the tendency follows the same trajectory.\u00a0 The Favela becomes a seething mass of population, trapped in what the French call \u201cSystem-D\u201d, without laws or regulations, but by no means free.\u00a0 With no place else to go, without even the ability to escape in their dreams, till the garbage-generating civilisation which supports it collapses.<\/p>\n
We can stop this.\u00a0 The Workers of Auckland must combine to resist this tendency before it is so deeply established that it can never be reversed.\u00a0 Nothing less than a united coalition of all workers, unions and social justice organisations can avert the crisis.\u00a0 Rent Control has been the remedy used in some of America’s largest cities, and it can work here. But stop it we must, before it is too late, and the Favela grows to consume us all<\/p>\n","protected":false},"excerpt":{"rendered":"
Linda Socialist Aotearoa By any measure, the housing market in Auckland is overheated.\u00a0 Thousands of Kiwi first home buyers are being forced out by Speculators looking for a way to trade printed\u00a0 money for physical assets.\u00a0 New Zealanders are witnessing the effects of the quantitative easing \u201ctsunami\u201d washing up on our shores.\u00a0 Some see this […]<\/p>\n","protected":false},"author":22,"featured_media":1585,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[4,1],"tags":[],"class_list":["post-4057","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-housing","category-news","last_archivepost"],"_links":{"self":[{"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/posts\/4057"}],"collection":[{"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4057"}],"version-history":[{"count":1,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/posts\/4057\/revisions"}],"predecessor-version":[{"id":4058,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/posts\/4057\/revisions\/4058"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=\/wp\/v2\/media\/1585"}],"wp:attachment":[{"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4057"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4057"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/mananews.co.nz\/wp\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4057"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}