Global housing investment is eroding democratic control over rents and homes
Leilani Farha argues that the global housing crisis is also a democratic crisis: homes are increasingly treated as investment assets, while many people cannot afford to rent or buy. She says financial firms and governments have shifted housing decisions away from public control, leaving voters with limited influence over policies that shape rents and access to homes.
Farha describes an alliance of private equity firms, pension funds and property trusts that can lobby against rent controls and influence policy. In Copenhagen, Denmark’s government reduced a proposed 10-year rent freeze for renovated flats to five years after pressure from landlords and pension funds. She also points to mortgage securities associated with the 2008 financial crisis and tax exemptions for property trusts, arguing that such decisions were made without public debate.
- Farha links housing unaffordability to declining democratic control.
- Financial firms have growing influence over housing policy.
- Denmark’s proposed 10-year rent freeze was cut to five.
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The case for
Treating housing mainly as an investment can bring in capital for building, renovating and maintaining homes, while pension funds and property trusts may invest on behalf of ordinary savers. Investors can argue that predictable returns and fewer restrictions encourage supply, and that rent controls may reduce incentives to build or improve rental housing. On this view, policy should balance affordability with investment and leave room for elected governments to adjust rules as circumstances change.
The case against
Homes are essential to security and participation in society, so allowing financial returns to dominate housing decisions can put tenants and prospective buyers at a disadvantage. Concentrated investors may have greater access to policymakers than the people affected, while decisions such as weakening rent protections or granting tax exemptions can shape access to homes without meaningful public scrutiny. Stronger democratic oversight and tenant protections can help ensure housing serves residents as well as investors.
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Originally published by The Guardian as “The housing crisis is now global. It shows just how undemocratic our nations have become | Leilani Farha”.