Housing and Social Change

East-West Perspectives

Ray Forrest, James Lee

• Publisher: Routledge
• Year: 2003
• eBook ISBN: 9781134481705
• Edition: 1
• Topic: Architecture
• Subtopic: Architecture General

This wide-ranging exploration of the key contemporary relationships between social change and housing is both policy-oriented and theoretical, drawing on a group of internationally-respected academics. It is also multidisciplinary, incorporating sociology, economics, social policy and human geography perspective. Its international perspective is rooted in its examination of issues such as economic insecurity and instability, social diversity, financial and social exclusion, sustainability, privatisation and state legitimacy, the interaction of the global and the local across three continents.

1 Some reflections on the housing question

Ray Forrest

Introduction

In 1867 Engels’ construction of the housing question drew on his observations of the ‘exploding city’ of Manchester (Engels 1988). There was mass migration from the countryside to the city, overcrowding, a massive absolute shortage of housing and generally appalling living conditions in many northern European cities. At the beginning of the twenty-first century, for many Western housing analysts, the question appears to have been mainly answered. The vast majority of households are reasonably well housed. Space standards are generous and amenity provision is of a relatively high standard. It is certainly true that amidst this affluence there is deeply entrenched poverty and systemic homelessness – and this is perceived as a growing threat to social cohesion and stability. But access to decent housing is not a preoccupation of majorities in most of Europe and North America. So what does the housing question look like today? This book focuses on various relationships between housing and social change in the contemporary world. It draws on authors from Europe, North America, South and East Asia and Australasia. This introductory chapter aims to provide a backcloth to the various discussions which follow. In particular it will explore key aspects of the current housing question in relation to processes of globalization, demographic change, rising social inequalities and new social divisions associated with wealth accumulation via home-ownership. The housing literature continues to have a strong bias towards experiences in western Europe and North America. For this reason, and consistent with the strong East/West theme of the book, the emphasis in this chapter will be on aspects of social transformation and housing provision in Asia, particularly South and East Asia. Throughout, however, appropriate reference will be made to current developments and debates in the West. The concluding section will reflect on the extent to which, from an international perspective, the housing question has been transformed over the last century.

Uneven developments

For Western governments, then, absolute housing shortages are seen generally as a thing of the past. Housing policies are now more likely to be targeted on particular groups such as lone parents or lowest income households or at the new housing demands of demographic ageing rather than as general strategies to raise standards or widen access. Western governments are also more likely to be concerned with an ageing infrastructure and urban regeneration than with mass provision for an expanding population of urban dwellers. Most Western housing markets are generally well established with mature institutional structures. While some have been shaken in recent decades by price volatility and wider economic uncertainty, they have generally recovered. Moreover, academic debate about housing in the West is likely to be couched in terms of choice and diversity, in terms of postmodernism and post-fordism, rather than in the starker language of deprivation, exploitation and urban poverty.

Of course, the experience of severe overcrowding, lack of basic amenities such as running water and occupancy of precarious and illegal forms of shelter are only a memory for many households living in places such as Hong Kong, Singapore, Kuala Lumpur and Seoul. But when compared with the post war experiences of households in countries such as Britain or the USA, for many the memories of such conditions are relatively recent. Much of East and South East Asia has experienced a period of remarkable growth rates, dramatic economic and social change and rampant urbanization. The rapid pace of urbanization and industrialization has also produced much more volatile upswings and downswings in the property market – during booms prices have risen by more than 20 per cent compared with a more typical 10 per cent in Western property markets (Bank of International Settlements 1997: 106).

The impacts of these rapid changes in working and living conditions have been highly uneven. Some cohorts have experienced rising real incomes and widening job opportunities. Others have been caught by severe economic down turns or by the more brutal aspects of industrialization. Moreover, this unevenness which was perhaps perceived previously to be a transitional phase in a more widespread transformation of peoples’ life chances and opportunities has, since the Asian financial crisis, become more deeply entrenched and problematic. Here there are parallels with shifts in Western social structures with deteriorating conditions and opportunities for some. But the consequences in parts of Asia have been more dramatic. Some members of the newly expanding middle classes found themselves unexpectedly jettisoned by a rapid downturn in economic activity. Some lost their jobs – others saw the value of their savings and assets significantly eroded. The hardest hit were those in the most vulnerable economic situations – typically, those least skilled, younger, casual workers and those in the informal sectors.

In this period of economic turmoil there were severe negative impacts on housing markets and housing opportunities. These housing market consequences were most apparent in the core Asian economy of Japan and in Korea and Thailand. There have, indeed, been striking differences in the dynamics of the housing markets of the two dominant economies of East and West. While the 1990s saw an unprecedented housing market boom in the US (Joint Center for Housing Studies 2002), Japan has wallowed in a seemingly incurable recession with negative equity and price deflation. While the rate of home-ownership in the US rose further and encompassed a wider cross section of the population, in Japan rates remained stable at around 60 per cent with substantial falls in the recruitment of young people into the tenure (Forrest et al. 2002).

However, as we shall see in both this chapter and in subsequent chapters, there are many points of contact and commonality between housing debates in Eastern and Western societies. Many of these points of contact are associated with the forces of change bearing down on housing provision – particularly demographic ageing, the impact of the knowledge based economy and globalization, shifts in the nature of the family and the household and changing ideologies and policy discourses. There remain, however, striking differences. Some of these differences are associated with the policies of many Asian states which have accorded priority to economic development and modernization over infrastructural investment in areas such as housing – the so-called productivist welfare state orientation (see, for example, Holliday 2000). Other differences are quite simply to do with the relative poverty of many Asian societies. While the discussions in this book focus mainly on societies which have relatively high standards of living, such as Singapore, Hong Kong and Japan, it is important to note that poverty and subsistence living is still the everyday experience in many parts of Asia.

In the period from 1960 until the Asian financial crisis, both per capita incomes and income distributions continuously improved in the Asian NICs and in some of the ASEAN countries. By the mid-1990s per capita GNP in Singapore and Hong Kong was close to, or above, that of the USA (Tan 2000). Many of the ASEAN and South Asian countries, however, saw little or very unequal progress and suffered a major reversal with the Asian financial crisis. Moreover, the shift from labour intensive, export oriented industrialization to more capital intensive industries has tended to produce more unequal income distributions in many countries. Countries such as the Philippines remain extremely poor and there are sharp contrasts between urban and rural areas in, for example, Thailand and mainland China. As Tan remarks, the grossly uneven pattern of investment and development has ‘brought prosperity to Bangkok (and the southeast of the country), but left the rest of the country in a sea of poverty’ (Tan 2000: 70). The most recent UN Global Report on Human Settlements (UNCHS 2001) estimated some 278 million people in East Asia and the Pacific were living on less than US$1 a day – a slight increase from the previous assessment in 1996. The report observes that

The decline in the numbers of the poor in Asia is almost exclusively due to a reduction in the number of poor people in East Asia, most notably in China. But progress was partly reversed by the crisis and stalled in China.

(UNCHS 2001: 14)

For many households in East and South East Asia, living and housing standards remain far behind the normal expectations of Western societies. But it should be underlined that preoccupations with access to decent quality housing are not limited to the populations of the poorer countries of Asia. Many people in the more affluent countries – including their more affluent members – are second or first generation refugees with a perspective on the precariousness of life that few Europeans would now share – decent housing is very precious. In Hong Kong, for example, that quintessential symbol of economic dynamism, housing remains near if not at the top of the policy and popular agenda. For most ordinary people housing is their number one preoccupation. This is hardly surprising given the very high price income ratios which have been prevalent in Hong Kong and extraordinarily low space standards. It is still not unusual for households to live in apartments of less than 500 square feet, often in an extended family. And home owners in Hong Kong moving from the rental to the ownership sectors typically experience a reduction in space. In the early 1990s, although Hong Kong ranked with cities such as Paris, London, Melbourne and Oslo in terms of average per capita income, in terms of floor area per person, it sat alongside Harare, Karachi and Bogota (UNCHS 1996: 198). Hong Kong remains the high density city – a population packed into high rise towers served by an ultra efficient public transport system – a model perhaps of environmental sustainability and efficient residential living or at least a city which raises some key questions about density, urban form and social cohesion which are currently to the fore in housing debates in many Western societies. The general point is that at an international rather than a European or North American level the housing question still represents an enormous challenge for policymakers and governments, and for many households remains a matter of pressing need rather than one of quality and choice.

Globalization and housing

It is impossible to discuss housing and social change without some reference to processes of globalization. It is, inevitably, a highly contested term with a voluminous literature on the topic devoted to both clarification and obfuscation. Held and McGrew, in their extensive collection on the cultural, social, political and economic dimensions of globalization, offer the following straightforward definition:

Simply put, globalization denotes the expanding scale, growing magnitude, speeding up and deepening impact of interregional flows and patterns of social interaction. It refers to a shift in or transformation in the scale of human social organization that links distant communities and expands the reach of power relations across the world’s major regions and continents.

(Held and McGrew 2000: 4)

They then go on to point to the contradictory nature of these processes which can produce divergence as well as convergence, disharmony as well as harmony. This is a point taken up in a rather different way by McGee (2002) when he argues for an appreciation of both the local embeddedness of these so-called globalizing processes and, in particular, the differential pattern of incorporation of parts of the region into the global system. The issues of exclusion and inclusion of people and places are not restricted to processes at work in East and South East Asia – but the contrasts there are starker than in Europe. It is the mega-urban regions such as Manila and Bangkok where these processes of incorporation and connectivity have been concentrated. This has not only driven a sharper wedge between these expanding megacities and their hinterland but also heightened the vulnerability of the poor living within them (McGee 2002).

Held and McGrew also observe that amidst this discourse of global interconnectedness, ‘for the most part, the routines of everyday lives are dominated by national and local circumstances’ (See p.). And it is important in this context to remind ourselves that housing provision and housing markets are inherently local in nature in terms of who provides the housing, how it is marketed and how we access it to rent or buy. They require, in the main, local knowledge on the part of both agents and consumers, providers and clients. Moreover, whether we are living in London, Sydney or Singapore, we are more sedentary than we might believe. Most of us are only moderately mobile and a surprising number of households, even in the supposedly hypermobile cultures of the West, live out their lives in very limited geographic space. Everyday lives pivot around the local neighbourhood, the dwelling and place of work. Dwellings are, of course, immobile. The capital within them can be released, traded and securitized but the unique attributes of a dwelling, in terms of location, orientation and other features are fixed in space. However, substantial amounts of capital are tied up in the housing sector, and notably so in many Asian societies. The value of those investments is increasingly vulnerable to the vicissitudes of global financial flows and fickle money markets. Economic downturns, conflicts or natural disasters in one part of the globe can impact on the costs of housing finance in another. The global increasingly bears down on the local.

But there are more specific dimensions of globalization which are relevant to this discussion of housing and social change in both Asian and Western housing markets. First, there is the globalization of policy discourse. While the contexts and consequences vary dramatically between say mainland China, the UK and the USA, nonetheless the globalization of policy communities (shepherded in great measure by global organizations such as the World Bank and IMF) has produced an increasingly global policy language and policy response of privatization, deregulation, marketization and contracting out. It has become axiomatic that large, state housing bureaucracies are inefficient, expensive and distort normal market processes. The Housing Loan Corporation in Japan is being transformed into an independent agency by 2005. The Hong Kong Housing Authority, now the Housing Department, is being progressively fragmented and its functions contracted out to the private sector. The Housing Development Board in Singapore appears to be resisting these pressures but the weight of the still dominant neo-liberal orthodoxy continues to erode institutions which have made a major contribution to housing provision in various countries. This is not to suggest that these organizations were not due for reform and closer scrutiny but that the evidence justifying the need for such institutional transformations often seems to take second place to the ideology.

Moreover, if we are in many national contexts ‘moving beyond the state’ in terms of housing provision it is not yet clear where we are going or with what consequences for particular groups. A common policy language does not signal a convergence of housing systems or outcomes. But there is no doubt that the policy shifts, which some commentators (Harloe 1995) have portrayed as the transition from a period of exceptionalism of direct state provision and mass housing solutions, have, and are, producing new winners and losers. Very often it is those groups in the population which have been the main beneficiaries of direct state provision or substantial indirect assistance in the past which prove to be the main beneficiaries of a privatized and increasingly deregulated present. The inequalities of bureaucratic allocations systems in which privileged strata get access to the best housing generates an additional layer of rewards when these housing systems are privatized and marketized. This has been true of former state socialist societies and certainly many northern European countries (Danielli and Struyk 1994; Forrest and Murie 1990). It is also, as Davis shows in Chapter 10, evidently the case in the housing reform process in mainland China where blue collar workers gain assets of considerably less value than managers and professionals.

Second, there is a climate of greater risk, insecurity and market volatility. Influential commentators such as Beck (1992) and Castells (1996) conjure up a world where we can no longer assume the old certainties and securities of the past. In particular we can no longer assume job security. Flexible labour markets, essentially easier hire and fire regimes with more casual and insecure contracts, create conditions which are not ideal for the promotion of home-ownership. The best conditions for the development of home-ownership are arguably rising real incomes, growing job security and a good dose of inflation – the conditions prevailing in many industrial societies in the three decades following the end of the Second World War. The pressures of competitive globalization, however, drive down inflation and real incomes (for some) and increase job insecurity. Combine this with greater uncertainties about property values and the foundations of much post war housing policy are seriously shaken. While the fear of job loss or the extent of casualization may be greater than the reality, even this ‘manufactured uncertainty’ (Doogan 2001) has a powerful impact on popular senses of stability and security. Moreover, house prices which do not rise with expectations produce a collective sense of unease. Negative equity remains pervasive in Tokyo. Hong Kong home owners have been on the streets with placards proclaiming ‘Save us from negative equity’ demanding some kind of ameliorative action from the government. In Thailand, when the Asian financial crisis hit, many of the aspirant middle classes fell rapidly into debt evidenced by the half built detached houses and in some cases unfinished mansions in central Bangkok. During the late 1980s recession in Britain the government agonized over what to do about the million or so households with negative equity who were overwhelmingly concentrated in the core economic region of the country (Forrest et al. 1999). Even if house prices are on the mend in many parts of Asia, consumer confidence is increasingly vulnerable to the uncertainties of the residential property market. If prices are going up, people feel wealthy. They borrow and spend. If prices are moving in the opposite direction general consumption can be rapidly depressed. John Calverley, the Chief Economist with the American Express Bank, has commented that, ‘In a diverse range of countries including the UK, Japan, South and East Asia, and recently the United States, booms and busts in property and/or stock prices have played a crucial role in the business cycle’ (Calverley 2002).

Third, real estate is deeply implicated in general financial flows, perhaps the most unambiguously global process. Changes in its value can impact significantly on macro economies. This was clearly evident in the Asian financial crisis with the high levels of...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contributors
• Preface
• 1 Some Reflections on the Housing Question
• 2 Home-Ownership in East and South East Asia
• 3 Restructuring Social Housing Systems
• 4 Housing Provision and Management of Aspirations
• 5 Housing and Regulation Theory
• 6 Housing Diversity in the Global City
• 7 The Making of Home in a Global World
• 8 Home-Ownership in an Unstable World
• 9 Home-Ownership and Changing Housing and Mortgage Markets
• 10 From Welfare Benefit to Capitalized Asset
• 11 Banking the Unbanked
• 12 Social Sustainability, Sustainable Development and Housing Development
• 13 Urban Reform and Low-Income Communities in Chinese Cities
• 14 Concluding Observations