Urban Warfare Urban Warfare Housing under the Empire of Finance Raquel Rolnik Foreword by David Harvey Translation by Felipe Hirschhorn Work published with the support of the Brazilian Ministry of Culture / National Library Foundation Obra publicada com o apoio Ministộrio da Cultura Brasil / Fundaỗóo Biblioteca Nacional First published in English by Verso 2019 First published as Guerra dos lugares: a colonizaỗóo da terra e da moradia na era das finanỗas â Boitempo 2015 Translation â Felipe Hirschhorn 2019 Chapter and afterword translation © Bianca Tavolari 2019 Foreword © David Harvey 2018 All rights reserved The moral rights of the author have been asserted 10 Verso UK: Meard Street, London W1F 0EG US: 20 Jay Street, Suite 1010, Brooklyn, NY 11201 versobooks.com Verso is the imprint of New Left Books ISBN-13: 978-1-78873-160-7 ISBN-13: 978-1-78873-300-7 (HB) ISBN-13: 978-1-78873-161-4 (US EBK) ISBN-13: 978-1-78873-162-1 (UK EBK) British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalog record for this book is available from the Library of Congress Typeset in Sabon by Biblichor Ltd, Edinburgh Printed in the US by Maple Press For my mentors, Gabriel Bolaffi, Lúcio Kowarick, Warren Dean and David Harvey For Eugênia and Teresa, the two ends of the ribbon of strength and love that unites us Contents Foreword Introduction Part I The Global Financialisation of Housing The Mortgage System Exporting the Model Post-Crisis Measures: More of the Same? The Demand-Side Subsidies Model Microfinance: The Last Frontier Part II Tenure Insecurity From Enclosures to Foreclosures Informal, Illegal, Ambiguous 10 Private Property, Contracts and the Globalised Language of Finance 11 Insecure Tenure in the Era of Large Projects Part III 12 Financialisation in the Tropics 13 At the Frontier of the Real-Estate–Financial Complex 14 Real-Estate Avenues 15 Real-Estate Games 16 June 2013: Journeys and Beyond Afterword: The Rental Housing Boom – New Frontiers of Housing Financialisation Acknowledgements Notes Index Maps Foreword Raquel Rolnik has written a magisterial survey and analysis of what is fast becoming one of the most compelling global crises of our time: the seeming inability of our increasingly dominant free market economic and political system to furnish adequate, affordable housing for the mass of the world’s population While problems of housing provision have often been addressed in the context of the politics and policies of particular nation states, never before has such a broad global comparative work of the sort here presented been attempted Rolnik has been able to draw on a wealth of experience as an urbanist and urban planner As director of the Planning Department of the city of São Paulo, she had to deal with the tumultuous problems of housing provision in one of the fastest-growing metropolitan areas of the world As national secretary for Urban Programmes of the Brazilian Ministry of Cities in the first Lula Administration, she fought to put teeth into the clauses of the Brazilian constitution designed to protect the right to the city But it was her years as UN special rapporteur that provided her with the basic raw materials to compile this remarkable study Her method of enquiry when she was UN rapporteur is worthy of note Instead of basing her work on the words of government officials alone, she talked with those marginalised populations most affected by poor housing conditions and failing policies on the ground This brought her into contact with social movement activists who furnished her with multiple grass roots perspectives on their vast and ongoing daily struggles to sustain and create adequate housing provision all too often under the most trying and sometimes even repressive circumstances While every city has its own rich and diverse particularities, what becomes apparent from Raquel’s penetrating and moving accounts is that the dilemmas of adequate housing provision also have a universal dimension, thanks in part to the export of a particular model of housing provision under the aegis of international institutions (such as the World Bank and the IMF, along with the Habitat Conferences sponsored by the UN) The contemporary obsession with market provision, with land and property titling and the extension of private property arrangements, with home ownership and access to credit and finance, along with the so-called ‘deepening’ of financial arrangements to build a secondary mortgage market, is overwhelming While often well-meaning and on occasion sufficiently robust to be judged successful (particularly with respect to the securing of social control), the main effect of these obsessions has been to open the path, as Raquel shows, to the exploitation of housing markets as vehicles for speculative gain for landholders, developers and financiers Increasingly, the habit of shaping public policies to counter recessions and ward off depressions by ‘building houses and filling them with things’ has given a macro-economic role to housing markets that is more about stabilizing capitalism than addressing deficits in housing for marginalized populations The result has all too often been evictions and displacements of those populations in the name of urban upgrading and renewals that disrupt supportive social networks, however fragile and tenuous The neighborhood may improve but the needy people who once lived there have disappeared On some occasions, market reforms have allowed marginalized and impoverished populations to temporarily accumulate assets (through, for example, sub-prime lending and other forms of micro- finance) only to have those gains erased through subsequent financial manipulations and crises The most spectacular example is, of course, the foreclosure on more than million households in the United States after 2007/8 and the loss of more than 70 per cent of the asset values held by lowincome black populations The endless accumulation of capital by financial institutions has largely occurred at the expense of the well-being of those populations that social policies were supposed to serve The political and social resistance to this system is everywhere in evidence, and Raquel’s documentation of this widespread struggle from below to secure adequate housing rights and appropriate shelter is in many respects inspiring Social movements fight and struggle to acquire or take back the right to a decent house in a decent living environment endowed with adequate life chances The commodification of housing provision over the last forty years of neoliberal politics has not gone uncontested While the well-to-do are furnished with abundant opportunities to indulge their fancies and their often bizarre tastes with multiple luxury mansions in a variety of privileged locations and climes, the mass of the world’s population is either technically homeless or at best crammed together in insalubrious dwellings in fetid locations or, in the case of the swelling numbers of global refugees fleeing violence, war and environmental disasters, confined to tent cities in remote locations cut off from any kind of economic or social opportunities to re-establish a normal life To these populations the idea that a decent house in a decent living environment with access to adequate life chances might be a basic human right must seem like a cruel utopian dream In clearing out my library recently I came across a booklet published by the New York Metropolitan Council on Housing in 1978 The title was Housing in the Public Domain: The Only Solution In 1978, Raquel reminds us, the US Housing and Urban Development Department had a budget of $83 billion to help pursue that solution Limited equity co-ops and even community land trusts were springing up in most major cities with municipal governmental support to offer nonmarket solutions By 1983, with the Ronald Reagan neoliberal turn in full swing, the HUD budget for new construction had been reduced to $18 billion In the Clinton years, a period of increasingly intensive neoliberal reforms, it was abolished entirely, along with almost any prospect of municipal support for non-market solutions Forty years later, I find myself reflecting on the disastrous worldwide consequences of not taking up the obvious and the only solution Forty years of demonizing that solution lies at the root of contemporary inadequacies It is time to turn that around Reading this excellent and inspiring book is a good place to start Introduction ‘ How dare this Brazilian woman come over here to evaluate UK housing policy?’ These words summarise the reaction of members of the British Conservative government to my trip to the United Kingdom in 2013, as United Nations special rapporteur on adequate housing My visit to the UK coincided with a moment of political debate in the country One of the proposed welfare reforms – part of the government’s fiscal austerity programme – was being contested by the people affected Under the pretext of opening up available stock to people in need of a home, the measure known as the ‘bedroom tax’ introduced cuts in housing benefits to individuals of working age who lived in public housing and had ‘spare bedrooms’.1 Those directly affected by the cuts were, by that time, organising local movements and building regional and national networks in protest In addition, opposition party representatives and social movements fighting against the relentless dismantling of the British welfare state were endorsing the protests, alongside support from some sectors within the press Among those affected were individuals and families already living on the edge These people were among the most vulnerable groups in public housing: the poorest of the poor, often coping with mental illnesses or physical disabilities The new measures threatened to rob them of the stability, safety and guarantee of a dignified life that the public welfare system had promised them It was clear from the outset that council tenants with ‘spare rooms’ were going to be made to move to smaller houses or flats Furthermore, they were unlikely to be rehoused in the same neighbourhood, or even nearby In sum, such a policy would forcibly uproot people from the communities in which they had built their lives At the time of my arrival, a few months after the policy’s implementation, most of the affected people were struggling to stay put, despite the cuts to their housing benefits and consequent deterioration of their living conditions Before my arrival, the UN rapporteur’s visit to the UK was considered by the government as a mere diplomatic ritual, necessary to confirm the state’s collaboration with the UN’s human rights protocol In the face of the unexpected outcry that erupted while I was there, the Conservative Party’s reaction was to discredit the rapporteur – contesting the authority of the visit and attempting to characterise it as a politicisation of the UN’s role by local opposition parties This was done by undermining a rapporteur who was unwise enough to listen to and believe the voices of those suffering as a result of the new policies However, the Conservatives’ resentment was not merely against a UN rapporteur who criticised them It was against a ‘Brazilian woman’, hailing from an ‘underdeveloped’ country marred by the existence of favelas and other degrading housing forms One who, moreover, dared to state that the recent reforms in the British social housing system were a step backwards and a violation of the housing rights of the affected people The campaign of disqualification that followed, spearheaded by the right-wing tabloids, only exposed the prejudices more clearly Firstly, a housing expert from the world’s periphery should never leave their place of origin They should focus on thoughts and actions directed towards overcoming what is defined by the Western North (‘the centre of the world’) as an incomplete modernising project Subject to the geopolitics of the international division of labour and knowledge production, ‘Third World’ or .. .Urban Warfare Urban Warfare Housing under the Empire of Finance Raquel Rolnik Foreword by David Harvey Translation by Felipe Hirschhorn Work published with the support of the Brazilian... with the tumultuous problems of housing provision in one of the fastest-growing metropolitan areas of the world As national secretary for Urban Programmes of the Brazilian Ministry of Cities in the. .. especially housing Trying to understand the roots of the crisis, I started to research the origins of housing financialisation I chose this theme as one of the main investigation and action axes of my