Contemporary Housing Issues in a Globalized World

Padraic Kenna

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781317160830
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

The globalization of housing finance led to the global financial crisis, which has created new barriers to adequate and affordable housing. It presents major challenges for current housing law and policy, as well as for the development of housing rights. This book examines and discusses key contemporary housing issues in the context of today's globalized housing systems. The book takes up the challenge of developing a new paradigm, working towards the possibility of an alternative future. Revolving around three constellations of writing by diverse contributors, each chapter sets out a clear and developed approach to contemporary housing issues. The first major theme considers the crisis in mortgage market regulation, the development of mortgage securitization and comparisons between Spain and Ireland, two countries at the epicentre of the global housing market crisis. The second thematic consideration focuses on housing rights within the European human rights architecture, within national constitutions, and those arising from new international instruments, with their particular relevance for persons with disabilities and developing economies. The third theme incorporates an examination of responses to the decline and regeneration of inner cities, legal issues around squatting in developed economies, and changes in tenure patterns away from home-ownership. This topical book will be valuable to those who are interested in law, housing rights and human rights, policy-making and globalization.

1 Introduction

Padraic Kenna^*

^* I wish to thank all the contributors and especially Robin Paul Malloy and Dee Halloran for their valuable assistance in preparing this book.

DOI: 10.4324/9781315573830-1

Introduction

Housing addresses the basic need for human shelter and facilitates the essential human requirement for a home. In recent times, housing has also been promoted by global financial institutions as the contemporary repository of household wealth and equity.¹ Yet, this approach to housing has created the greatest global financial crisis for generations. The Economist has pointed out that the house price boom that preceded the 2008 financial crisis was remarkable for its scope and scale.² However, house prices have begun to rise again in the US, but continued to fall in the peripheral countries of the Eurozone in spring 2013.³ Indeed, across the world, there is a mixed picture, with house prices falling (the largest annual drop of nine per cent in Spain) and rising in equal numbers. In spring 2013, The Economist house-price indicators data showed that since 2007, house prices had fallen by 49 per cent in Ireland, 24 per cent in Spain, 21 per cent in the US, 14 per cent in the Netherlands and Japan, and 11 per cent in Italy and the UK.⁴ However, in that period, house prices had increased by 86 per cent in Hong Kong, 24 per cent in Austria and Singapore, 21 per cent in Switzerland, 20 per cent in Canada, 17 per cent in China, 12 per cent in South Africa and 10 per cent in Australia.⁵ Consequently, the book focuses somewhat on the situations in the two countries (Ireland and Spain) where globalization has had the greatest impact on housing systems.

¹ The benefits of home-ownership as a driver of development based on Hernando De Soto, The Mystery of Capital (London, Bantam Books 2000) have been promoted by many global development institutions. ² ‘Home Truths’ The Economist (12 January 2013). ³ Initially, the house price fall in Estonia was sharper than any other country, but house prices have now recovered to one-third of the fall experienced between 2005 and 2007. In Latvia, a large part of the mortgage portfolio has been backed by investment loans. See HJ Dübel and M Rothemund, A New Mortgage Credit Regime for Europe (Brussels, Centre for European Policy Studies 2013) 8. ⁴ ‘Home Truths’ The Economist (12 January 2013). ⁵ The highest annual increases to the fourth quarter of 2012 in the Eurozone were Latvia (+9.8 per cent), Estonia (+5.8 per cent) and Malta (+5.4 per cent), with the largest falls in the same period occurring in Spain (-12.8 per cent), Romania (-9.1 per cent) and Slovenia (-8.8 per cent). See Eurostat, News Release/Euroindicators 55/2013 (11 April 2013).

What then are the key contemporary housing issues in a globalized world? This book brings together a range of topics and approaches originally discussed at the ‘Contemporary Housing Issues in a Changing Europe’ conference held at National University of Ireland, Galway, in 2012. This was organized by the Centre for Housing Law, Rights and Policy, the European Network of Housing Researchers (Legal Aspects of Housing, Land and Planning Group), FEANTSA (the federation of European organizations working with homeless people) and Housing Rights Watch. The conference, which attracted more than 100 participants from Europe, the US and Israel, provided an opportunity to examine and discuss key contemporary housing issues in the context of the global financial and sovereign debt crisis.

The objective of this book is to build on the findings of the conference and to take up the challenge of developing a new paradigm, working towards the possibility of an alternative future. The book revolves around three constellations of writing by diverse authors, each possessing a clear and developed approach to contemporary housing issues.

The first major theme considers the crisis in mortgage market regulation, the development of mortgage securitization and comparisons between Spain and Ireland, two countries at the epicentre of the global housing market crisis. The second thematic consideration focuses on housing rights within the European human rights architecture, within national constitutions and arising from new international instruments, with their particular relevance for persons with disabilities and developing economies. The third theme incorporates an examination of some responses to the decline and regeneration of inner cities, legal issues around squatting in developed economies, and changes in tenure patterns away from home-ownership.

A Globalized World

Definitions of globalization are diverse and the term itself is hotly contested.⁶ Globalization is a generic term used to describe a range of economic, industrial, social, military and cultural changes which have created high levels of interdependence, interaction and integration between different parts of the world, between people and between producers and consumers.⁷ Globalization primarily involves the intensification of worldwide social relations.

⁶ It has been argued that the epithet ‘global’ was born in ‘business management schools’ (Harvard, Columbia, Stanford). Specifically, the first text was The Globalization of Markets from Theodore Levitt (Harvard Business Review, May/June 1983). Later, the English-language economic press expanded the concept and afterwards the think tanks of neoliberalism adopted the concept. ⁷ There is an important distinction between internationalization and globalization; see David Held et al, Global Transformations, Politics, Economics and Culture (Cambridge, Polity Press 1999) 52–58.

Technological development and communication are key features of globalization, which has also been variously conceived as action at a distance; time-space compression; accelerating interdependence; a shrinking world; and, among other concepts, global integration, the re-ordering of interregional power relations, consciousness of global conditions and the intensification of interregional connectedness. The local becomes embedded within more expansive sets of interregional relations and networks of power – the global village.⁸

⁸ See D Held and A McGrew, ’The Great Globalization Debate: An Introduction’ in D Held and A McGrew (eds), The Global Transformation Reader (Cambridge, Polity Press 2000).

From the information superhighway to the international trade in drugs and arms, to the phenomenal impact of Macworld, Nike and the global media, the subject of globalization has come to concern all and sundry. At the core of most discussions of the issue is the extraordinary explosion of both technology and information, in ways that have considerably reduced the twin concepts of time and space. In particular, information and communications technology (ICT) has emerged as perhaps the most dominant force in the global system of production, albeit with significant ramifications in all other spheres of contemporary human existence.⁹

⁹ UN Doc. E/CN.4/Sub.2/2000/13. The Realization of Economic, Social and Cultural Rights: Globalization and its Impact on the Full Enjoyment of Human Rights. Preliminary report submitted by J Oloka-Onyango and Deepika Udagama, in accordance with Sub-Commission resolution 1999/8, 15 June 2000, at para. 6.

Giddens regarded globalization as having four dimensions, involving the world capitalist economy, the nation-state systems, the world military order and the international division of labour.¹⁰

¹⁰ Anthony Giddens, The Consequences of Modernity (Cambridge, Policy Press 1990).

A precise and widely quoted definition of globalization is put forward by Held and others as:

a process (or set of processes) which embodies a transformation in the spatial organisation of social relations and transactions – assessed in terms of their extensity, intensity, velocity and impact – generating intercontinental or interregional flows and networks of activity, interaction and the exercise of power.¹¹

¹¹ See D Held, A McGrew, D Goldblatt and J Perraton, ‘Rethinking Globalization’ in Held and McGrew (eds) (n 8) 68.

Globalization has been described as an ideological construction, a convenient myth which, in part, helps justify and legitimize the neoliberal global project that is the creation of a global free market, and the consolidation of Anglo-American capitalism within the world’s major economic regions.¹²

¹² For an excellent account of the development of neoliberalism, see David Harvey, A Brief History of Neoliberalism (New York, OUP 2005).

Of course, contemporary globalization may be viewed as no more than a continuation of centuries-old global trade, which hugely intensified after the Industrial Revolution, as described by Marx and Engels in their description of the global nature of capital.¹³ Depicting globalization as the second great transformation, Howard-Hassmann suggests that globalization is the final assault of capitalism on those areas of the world that previously escaped it, either because of explicit communism or socialist politics, ‘or because capitalism had no interest in the region as a source of capital or resources, a source of workers or a market’.¹⁴ It now appears that globalization is forcing onto an unwilling world the conditions of early European capitalism, ignoring the international human rights law that now prohibits such conditions.¹⁵ Indeed, Andreasson claims that the contemporary international vigour to create property rights in land and housing can be viewed as merely one step beyond the former colonial processes of dispossession of property by force.¹⁶

¹³ See Karl Marx, Capital, A Critique of Political Economy. Volume 2 (London, Routledge 1983). ¹⁴ RE Howard-Hassmann, ‘The Second Great Transformation: Human Rights Leapfrogging in the Era of Globalization’ (2005) 27 HRQ 1, 5. ¹⁵ ibid 18. ¹⁶ See S Andreasson, ‘Stand and Deliver: Private Property and the Politics of Global Dispossession’ (2006) 54 Political Studies 3.

The primary agents and institutional focus of contemporary economic global practices are widely identified as transnational corporations.¹⁷ But the World Bank, the International Monetary Fund (IMF), the World Trade Organization (WTO), commodity and currency exchanges, and other international organisations, such as the World Economic Forum, comprising leading industrialists and politicians, set the agenda and course for globalized corporations, states and institutions to follow. Indeed, the World Bank has provided the theoretical framework for states to create housing policies which sponsored markets as the primary actors in housing systems.¹⁸

¹⁷ See Joel Bakan, The Corporation: The Pathological Pursuit of Profit and Power (London, Constable 2004). ¹⁸ See World Bank, From Plan to Market: World Development Report 1996 (Washington DC, World Bank 1996); World Bank, The State in a Changing World (Washington DC, World Bank 1997); World Bank, Development Report (Washington DC, World Bank 1997). See also RM Buckley and J Kalarickal, Thirty Years of World Bank Shelter Lending – What Have We Learned? (Washington DC, World Bank 2006).

Sachs describes three overarching effects of the new globalization, a phenomenon which is globally transformative,¹⁹ all of which have a significan...

Table of contents

• Cover
• Half Title Page
• Series Page
• Title Page
• Copyright Page
• Table of Contents
• List of Figures and Tables
• Notes on Contributors
• 1 Introduction
• 2 A Legal Perspective of the Origin and the Globalization of the Current Financial Crisis and the Resulting Reforms in Spain
• 3 Comparing Mortgage Law in Ireland and Spain
• 4 Mortgage Foreclosure and Housing Rights in Spain: Crisis or General Deception?
• 5 Housing Rights in Europe: The Council of Europe Leads the Way
• 6 Housing Rights in Constitutional Legislation: A Conceptual Classification
• 7 Independent Living for People with Disabilities in Kenya: Charting the Way Forward
• 8 Public Interest Law and Regeneration: The Case of Ballymun Community Law Centre – Connecting the Dots through Community Economic Development
• 9 From Individual to Collective Squat: Economic Theory and the Regulation of Squatting in England and France
• 10 Housing Ladders and Snakes: An Examination of Changing Residential Tenure Trajectories in the Republic of Ireland
• Index