Commodification of housing refers to the transformation of basic

shelter A shelter is an architectural structure or natural formation (or a combination of the two) providing protection from the local environment. A shelter can serve as a home or be provided by a residential institution. It can be understood as both ...

, rental

housing Housing refers to a property containing one or more Shelter (building), shelter as a living space. Housing spaces are inhabited either by individuals or a collective group of people. Housing is also referred to as a human need and right to ...

, and

homeownership Owner-occupancy or home-ownership is a form of housing tenure in which a person, called the owner-occupier, owner-occupant, or home owner, owns the home in which they live. The home can be a house, such as a single-family house, an apartment, c ...

into an investment vehicle or speculative asset as opposed to a

public good In economics, a public good (also referred to as a social good or collective good)Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485–535). Elsevier. is a commodity, product or service that is bo ...

, human need, or the

right to housing The right to housing (occasionally right to shelter) is the economic, social and cultural right to adequate house, housing and shelter (building), shelter. It is recognized in some Economic, social and cultural rights#National constitutions, nat ...

Financialization of housing

Instead of outright purchasing in cash, homes and housing units are often purchased with 15 or 30-year

mortgage loans A mortgage loan or simply mortgage (), in civil law jurisdictions known also as a hypothec loan, is a loan used either by purchasers of real property to raise funds to buy real estate, or by existing property owners to raise funds for any pur ...

s. These can be

securitized Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans, or credit card debt obligations (or other non-debt assets which generate receivables) and sellin ...

and sold on a

secondary mortgage market The secondary mortgage market is the market for the sale of securities or bonds collateralized by the value of mortgage loans. A mortgage lender, commercial bank, or specialized firm will group together many loans (from the "primary mortgage mar ...

as packages of individual mortgages. The secondary mortgage market is considered to be the primary cause of the

2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...

as lenders made risky loans to subprime borrowers who defaulted on their mortgage payments.

Globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...

has led to

foreign national A foreign national is any person (including an organization) who is not a national of a specific country. ("The term 'person' means an individual or an organization.") For example, in the United States and in its territories, a foreign nationa ...

s buying land and housing in many countries, including non- European-Union nationals buying 27,000 properties in

Spain Spain, or the Kingdom of Spain, is a country in Southern Europe, Southern and Western Europe with territories in North Africa. Featuring the Punta de Tarifa, southernmost point of continental Europe, it is the largest country in Southern Eur ...

in 2023 and Chinese companies (both

acquisitions Mergers and acquisitions (M&A) are business transactions in which the ownership of a company, business organization, or one of their operating units is transferred to or consolidated with another entity. They may happen through direct absorpt ...

and companies originating in

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

) buying hundreds of

acre The acre ( ) is a Unit of measurement, unit of land area used in the Imperial units, British imperial and the United States customary units#Area, United States customary systems. It is traditionally defined as the area of one Chain (unit), ch ...

s of US

agricultural land Agricultural land is typically land ''devoted to'' agriculture, the systematic and controlled use of other organism, forms of lifeparticularly the rearing of livestock and production of cropsto produce food for humans. It is generally synonymous ...

. Some countries have bans on foreign nationals purchasing land but not real estate.

Rent

The

rental Renting, also known as hiring or letting, is an agreement where a payment is made for the use of a good, service or property owned by another over a fixed period of time. To maintain such an agreement, a rental agreement (or lease) is sign ...

market has also been described as a form of commodification of housing. Margaret Jane Radin wrote that the framing of tenants' personhood as a "specific

asset In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can b ...

" invested in an

apartment An apartment (American English, Canadian English), flat (British English, Indian English, South African English), tenement (Scots English), or unit (Australian English) is a self-contained housing unit (a type of residential real estate) that ...

was a form of "universal commodification" in which, "all things and attributes that people value in themselves, in other people, and in their physical and social environment are conceived of and reasoned about as if they were objects of

trade Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. Traders generally negotiate through a medium of cr ...

." Some areas have a significant number of

tourists Tourism is travel for pleasure, and the Commerce, commercial activity of providing and supporting such travel. World Tourism Organization, UN Tourism defines tourism more generally, in terms which go "beyond the common perception of tourism as ...

who rent housing units during their stays, contributing to gentrification.

Landlords A landlord is the owner of property such as a house, apartment, condominium, land, or real estate that is rented or leased to an individual or business, known as a tenant (also called a ''lessee'' or ''renter''). The term landlord applies ...

often can make a larger profit with a

short-term rental Short-term rental (STR) describes furnished self-contained apartments or houses that are rented for short periods of time. They are usually seen as an alternative to hotels. "Short stay" rentals are an offshoot of the corporate housing market, and ...

than a full-time tenant. This shift from a home to hotel-adjacent model has been tied to the commodification of housing.

Housing as a human right

Some housing advocates have called for a "decommodification" of housing in response to the

housing crisis An affordable housing crisis or housing crisis is either a widespread housing shortage in places where people want to live or a financial crisis in the housing market. Housing crises can contribute to homelessness and housing insecurity. They are ...

. Some groups have tied rental housing vouchers to commodification and have advocated for an expansion in

public housing Public housing, also known as social housing, refers to Subsidized housing, subsidized or affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a ...

instead.

References

{{Reflist Housing Political economy Right to housing Social democratic concepts

Financialization of housing

Rent

Housing as a human right

See also

References