The over-reliance on private home ownership that contributed to the sub-prime mortgage crisis and the subsequent global financial meltdown highlights the need to view housing through the lens of human rights and not just as a commodity, the United Nations independent expert on adequate housing said today.
“While political discussions are ongoing, I believe it is important to consider the linkage of the crisis with human rights, especially to look at the causes of the crisis and avoid repeating the same mistakes in any new national and global agenda,” said Special Rapporteur Raquel Rolnik, who presented a report to the Human Rights Council on the financial crisis, its causes and its relation to the right to adequate housing.
“One of the fundamental errors has been to consider housing only as a commodity and an investment asset,” she told the 47-member body in Geneva, underscoring that that the provision of adequate housing for all can not be left solely in the hands of private housing and financial capital markets.
As private loans and mortgages were the only option open to most people who needed a place to live, Ms. Rolnik noted that “credits were attributed by the private sector to households that – in normal circumstances – would not be eligible for loans.”
As a result, not only did private companies’ risk increase, but also “low-income households were made even more vulnerable to economic and financial changes,” she added.
In her report, the expert also argued that the reduction in the amount of public housing made available by the State had a significant impact on people in need of affordable accommodation, especially those that could not afford market prices and mortgages.
She noted that rapid increases in the price of housing led to excessive borrowing and the ensuing expansion of the financial system.
“The ‘biggest bubble in history’ was foreseen, but little or nothing was done by Governments to prevent it,” Ms. Rolnik, an architect and urban planner with extensive experience in the area of housing and urban policies, said in a press release.
Since the so-called bubble has burst, the financial crisis has resulted in housing becoming even less affordable for many people around the world, she noted.
“It is a blunt reminder that it is not just the poor, but also low- and increasingly middle-income groups, who find it difficult to raise enough money to buy or rent adequate housing,” said Ms. Rolnik.
“I believe that the current crisis represents an opportunity for reflection, and to consider how to improve housing systems, policies and programmes so as to ensure adequate housing to all.”