In the complex web of global, EU, national and local factors influencing housing finance, city governments have their responsibilities and roles to play. Public measures can have adverse effects, for example by supporting so-called ‘vulture’ investors, bailing out banks and (now) homeowners, or promoting the privatisation of public housing stocks without providing housing security for the most vulnerable. For these reasons, to ensure access to housing for all, government bodies at all levels have to work together to reorient public policies against speculative mechanisms.
Although cities alone do not hold the power either to deconstruct or control financial markets, a set of legal and political measures – including the exercise of pre-emption rights, planning decisions towards commoning rather than privatisation, and eviction protection, as well as political and civil society pressures – can help revert the hyper-commodification of housing and the detrimental effects on inhabitants.
The URBACT-UIA Fair finance conference showcased two approaches to regulating local housing markets: in the city of Matarò, near Barcelona, with the UIA project “Yes we rent!”; and in Riga, partner in the URBACT Alt/Bau network.
Matarò: tenant cooperatives
In Matarò (ES), despite rocketing rents and sparse affordable housing, more than 3000 flats still stand empty. So the city’s “Yes we rent!” project encourages the creation of tenant cooperatives to reuse empty properties and increase rental supply. This municipality-led model provides benefits for homeowners to renovate flats (according to energy efficiency parameters), securing rental payment and tax exemptions. The initial aim is to mobilise 220 units to constitute a stock of affordable flats for the city. Hence, owners will sign a contract with this new agent in the rental market, the housing cooperative, which will transfer the right to use (or ‘cession’) the apartment to one of its members according to its allocation rules. The hope is to change mindsets among residential property owners taking part in a project that goes beyond lucrative interest, and to encourage the solidarity of tenants through the city-wide cooperative.
Riga: taxing deteriorating buildings
The city of Riga (LV) has a shrinking population, thus speculative practices are less evident than in dynamically growing cities. The city introduced a regulation to increase property tax – by up to 10-15 times – on buildings that are classified as degraded, to encourage their rehabilitation. To do so, they established the Commission for the Inspection of Degraded Buildings. The threat of tax increases has led to substantial renovation activities. A similar measure could be applied to encourage the rehabilitation of empty residential properties to boost the provision of affordable housing in cities with tighter housing markets.
These examples are just two of the many wide-ranging actions and measures local administrations can adopt to control and definancialise their housing markets. Vienna (AT), for example, has long-standing public social housing policies, with two instruments to regulate relations with institutional investors: 1) urban development contracts; and 2) a law, passed in November 2018, requiring that all new buildings larger than 5000 m² include at least two-thirds subsidised housing, for which rents may not exceed €5 per m2, said Michaela Kauer during the URBACT-UIA webconference. Meanwhile, Berlin has set up a rental freeze, and exercises the rights of first refusal, and other instruments to prevent the exploitation of tenants. Citizens are also active, campaigning for example to expropriate Deutsche Wohnen, one of the largest investors in Berlin.