Where in the world is the dream house a reality? | Daily News

Where in the world is the dream house a reality?

Everyone aspires to own a dream house like this.
Everyone aspires to own a dream house like this.

Where is housing viewed as a human rights crisis? In Namibia, or Sri Lanka, or India or Myanmar? The answer is, neither. Housing is a human rights crisis in New Zealand, according to a United Nations (UN) report. The report has gone on to say that housing is looked at as a speculative asset in New Zealand, and not as a home. Millennials have almost no chance of owning a house, writes Anika Olson in CNN.com. That is in the United States (US) by the way, and not in New Zealand.

It is not as if acquiring a house is a cake walk for young Sri Lankan families. But perhaps in general the heart ache is less that in New Zealand. Nearly 70 per cent of millennials, by the way, according to a 2019 study from the rental platform Apartment List, cannot afford housing in the US.

However, there is not a lack of columnists writing that this is a lifestyle choice among that demographic.

It is not. But they say millennials are digital nomads and so forth. They say millennials love living out of AirBnb’s. This is by and large adding insult to injury. Yes, millennials love travelling which is far more affordable now than it was when their parents or grandparents were young. But it does not mean that every millennium can work out of Bali — or is willing to.

The same goes for young people here in this country. There are assumptions that they like to work on the move and are merely interested in rented lodgings at best.

There is so much hype about shared working spaces and so on, but it does not mean that the ‘millennials’ here are not interested in permanent office spaces. The nature of the work some of them do may be different. They can work out of a tiny shared office space.

But those numbers are still a minority. The majority are interested in permanent jobs and affordable housing etc.

Neo-Liberal order

But the neo-liberal order of business does not allow young people the luxury of basic housing. That is most pronounced in New Zealand, where Prime Minister Jacinda Arden is praised as some kind of Wonder Woman. But it seems she is not a housing kind of Wonder Woman.

As for the neo-liberal order those such as Joseph Stieglitz says it is ending, but it has not ended. Stieglitz writes: ‘The neoliberal experiment – lower taxes on the rich, deregulation of labour and product markets, financialization, and globalization – has been a spectacular failure’.

Yes of course it has been, but the rich do not seem to have any inclination to end the experiment.

Of course the people, as opposed to the owning classes, are trying. That is why we have centre left reformists such as Bernie Sanders in the US, etc.

This writer does not have to say how abysmally that reformist tendency is failing. Perhaps, Sri Lanka does not have a New Zealand level housing crisis because we were not enamoured with neo-liberalism the way the richer countries were.

That is partly thanks to our left leaning legacy of progressive policies. But also capitalism does not quite work here the way capitalism works in the wealthy and so-called industrialized nations.

As far as housing goes, the banks here manage to grant housing loans to families that have multiple sources of income as everyone is supposed to chip in including the children.

Presidential adviser Dr. P.B. Jayasundara has said recently that the Government is looking to the big clusters — the few of them — for tax revenue, and they are taking a closer look at the privately owned banks.

He has got that one right. Of course we do not have the Peter Keunaman type of housing policies any more and as with international schools by and large replacing fee levying private schools, we have capitalists building apartments replacing the State aided housing policies of the Keunaman era.

Vulnerable sections

But are the middle classes putting up houses in Sri Lanka? Not a whole lot, is the answer to that. They simply do not have the funds. Most of the houses — even in the form of tiny apartment complexes — that are coming up, are owned by those who live abroad.

As a result there are so many empty houses, even as the average middle class folk struggle to put up a basic structure that is livable. A few of those who live abroad rent out, and that way some folk manage to have a roof above their heads — by living on rent.

One positive spinoff from the pandemic is that the number of foreigners renting apartments etc. has fallen. With that the rents are falling, but that is essentially in Colombo.

The housing problem in the country is due to perennially applicable reasons — the country is not rich, or is relatively poor. Such countries have housing problems, and that is not news.

It is not the same reason New Zealanders are not having houses, or the millennials are not having houses in other parts of the industrialized West.

The pandemic apparently has had a positive effect though in the West due to lower interest rates etc. and millennials are back in the housing market says Forbes, but for how long? Also, does that mean that this segment of the demographic has to wait until a crisis crops up before they could afford to buy a house?

One of the most common reasons millennials were not buying houses was the fact that they had to pay off high levels of student debt that they had incurred. This is essentially in the US, but perhaps it is the same in New Zealand as well.

Even though student debt is as old as apple pie, this level of debt is mostly a result of neo-liberal economics in operation because the mortgage payments are overpriced, and that is in addition to the student debt for most homeowners.

It has led to the left of centre backlash with those such as Bernie Sanders and Alexandria Ocasio Cortez (Affectionately called AOC) trying to take the US extremely leftward. But no leftward progression seems to be happening, even under President Joseph R. Biden who was forced to incorporate parts of the Sanders platform.

It is easy to see that with free education etc., why we do not have the same magnitude of a housing crisis for the relatively affluent at least. Our younger folk simply do not have to pay student debt.

But there is the flip side. Banks lend at relatively low interest rates, but even so with the pandemic and all of that, paying up is not all that easy.

Banks on the other hand do not hesitate to foreclose. Some operate in the manner of respectable Mafiosi.

Many opportunities

Banks are also not productive in the elemental sense — banks do not ‘produce’, they deal in money though some banks have branches bringing in revenue from Bangladesh etc. It is therefore good to look at the banks closely in the hope of increasing the tax base.

It does not mean that banks can raise the interest rates and pass on the fallout to the clientele either.

The economy has to grow, but we have a history of protecting the most vulnerable of our citizens. Ironically that may be why our economy never grows to where we want it — but then life is a paradox.

However, more state subsidized housing etc. is prohibitive at this time. The people would hope that they can sit out one year or so, until the effects of the pandemic wears off and hope for better times.

But notice that the pandemic brought better, not worse, housing opportunities in the West.

This aspect was written in an earlier column by this writer in these pages. The pandemic has a corrective effect in the West because it resulted in a certain degree of inflation. When that happens inequality subsides generally, because wages can rise.

There have been negligible positive effects from the pandemic in developing countries such as ours however. It is all the more reason policy has to be looked at very closely once more. We had – and still have - a crisis on our hands — but maybe there are some things we could still do differently to make things better.

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