RECLAIMING LAND, CITIES AND RIGHTS

[Mark]

RECLAIMING LAND, CITIES AND RIGHTS
Launching a united international Housing and Land Rights Campaign 07–08 !

At the G8 protests in Germany in June 2007, groups of activists from
across Europe met to discuss integrating common strategies in relation to
housing and land rights in their respective areas. An international,
decentralized campaign for housing and land rights was launched against
exclusion and evictions, against privatisation and speculation starting
from October 2007.  The key idea is to concentrate upon parallel,
decentralized mass action, street action, direct action and direct
linkages to globalisation between October and March 2008,  with the MIPIM
International Real Estate Conference in Cannes, South of France happening
between 11th-14th March 2008.

On the 3rd October Actions and Events will be coordinated inside Novox
Network (http://www.novox.ras.eu.org/)  (Brazil, Portugal, Japan, France, 
Mali, Kenya, Italy and Belgium). Paris was the location of large-scale
housing protests last year which culminated in the occupation of a
government building in Central Paris renamed the 'Ministry of Housing
Crisis' (http://ministeredelacrisedulogement.org/) that opened later also
in other cities in France, in Belgium and in Italy.

ACTIVITIES IN LONDON
Activities in LONDON to start the Campaign 07-08:
On the 23rd of September a mass rally against Olympic evictions will be
taking place in Hackney, with a march from Hackney Town Hall to the
Olympic site. This was called by the Manor Garden allotment holders forced
to relocate on this date. The demo will be in solidarity with other
evicted groups such as Clays Lane Housing Co-op who have already been
evicted from their homes and traveller/Gypsy communities soon to be
evicted. The demo in Hackney calls into question the excessive social,
economic and environmental costs of the Olympics as a catalyst for
(de)regeneration.  Between the 24th and the 26th of September activities
are planned around a conference about Real Estate Investment Trusts called
REIT World UK 2007. Details for actions will follow. The London Tenants
Federation who are supporting this action, would like to encourage wider
debate and awareness of the issues of REITs (see latter end of text
below).  During the winter other activities will take place gathering and
distributing information on current housing issues and working towards the
creation of autonomous and public political spaces.

In Paris, on the 29th of September there will be a large demonstration of
many of the groups fighting for housing rights and decent housing. The
demonstration will take place along the new tramway line that many
homeless people used as a temporary accomodation to sleep overnight. It is
being organized by the Collectif Logement (Housing Collective),  Udé
(Urbanisme and Démocatie Urbanism and Democracy). The groups DAL (Droit au
Logement), Jeudi Noir,  Macaq, Les Enfants de Don Quichotte and many of
the neighborhood associations  in Paris are being invited to join this
initiative.

In Denmark we are calling in solidarity with the evicted Ungdomshuset 
Social Centre, for a mass squat occupation involving thousands of people.
This will take place on the on the 6th  October – being referred to as
G-Day – G13 Ungdomshuset
http://aktiong13.dk/.

In Germany :
The very important works against Speculation, Privatization and REITs this
year will be discussed around a Forum from October 1 2007. The Ruhr
Tenants Forum - a coalition of 4 tenants associations with
together 35.000 members - is preparing an event at a public square about 
the consequences of the privatisation and sell out of housing in our 
region. We plan to organize some testimonies of affected tenants from
diverse communities.
International guests are also invited to speak.
http://campaignblog.habitants.de/2007/08/29/ruhr-tenants-forums-plan-for-oct-1/



THE UK CONTEXT
Social and economic polarisation in the UK and London's role as a world
financial hub:

The economic divide between the beneficiaries of the financial property
bubble and non-homeowners continues to widen in the UK, with upward
pressure on land values and affluence-driven development.  The cost of
housing has now risen in real terms hundreds of percent in the last two
decades, and now for the first time, household expenditure on housing has
overtaken that on food and leisure as the biggest item in the weekly
expenditure (the sale of houses in UK in 2002 reached the staggering total
of £184 billion). In 1995 the average UK house price was £50,930. By the
end of 2005 that figure had more than trebled to a staggering £158,745.
That's an increase of 211%. During this time, average wages have failed to
keep pace, rising only 54% over the same period, leaving houses more
unaffordable than they have ever been. It is the primary indication of
ever-widening wealth disparity; young families are increasingly priced out
of the market with even key-worker housing schemes showing very low
take-up rates because they are still unaffordable, particularly in London.
Government targets for “affordable housing” become meaningless in a
massively appreciating market. Many social housing schemes for subsidised
‘low-cost’ rent-and-buy housing require applicants to have a minimum
annual income (in some cases this is as much as £28,758). Under these
conditions the very definition of affordable housing needs to be brought
into question.

SPECULATION
Speculation on housing in general is having a destabilising effect on
house prices ‘crowding out’ low income groups. In the wake of the
property/developer gold rush is the social fallout from rising rents,
tenancies becoming less secure, and less social housing provision. Rising
prosperity within the property bubble belies the reality of increasing
economic inequality, and social disenfranchisement particularly of younger
generations with limited scope to step onto the property ladder in a
vastly inflating property market. The 18 to 35 age bracket are
particularly caught in a highly-inflated private rented sector, unable to
afford to get onto the property ladder within a market where house prices
are completely out of their reach. Particularly in the UK, inflated
property values have become the collateral investment stores of wealth for
a financial hub in the City of London which is recycling economic proceeds
from investments across the world, with the proceeds shared through big
bonuses and share dividend payouts creating an elite section of the
property-ownership class.  While at least 42 of the 54 billionaires with
UK status protect the majority of their wealth through utilising overseas
tax-havens either through ‘non-domicile’ status, or ‘non-residence’
status, the majority of the rich have also seen the proportion of their
income paid in tax in per-capita terms within the UK drastically reduce
over the last 20 years. Tax avoidance by the super-rich is the outcome of
the big business agenda of the New Labour government, which has actively
sought to redistribute wealth away from working people towards the
super-wealthy and major corporations.  Much of “wealth creation” today
originates from the financial services industry in the City of London and
Canary Wharf. Meanwhile, the growing underclass in sink-estate Britain
continues to get further economically marginalised, whilst for the public
sector working population, pay awards for productivity gains are frozen.
Across the board, local authority budgets are continually stretched
year-on year as limits to annual increases in provision of council
services prevail.  Housing Associations receive state support and
accumulate vast revenue streams, protecting part of their asset base from
tax through their charitable status whilst tenant’s rights are eroded as
dubious management practices are executed and rents rise in real terms
over time.

RIGHT TO BUY – RIGHT TO SELL
>From the early 1980s onwards, the reduction in the amount of council
housing stock came about because of the drive towards right-to-buy under
Margaret Thatcher, with the offer of the sale of council houses at huge
discounts to sitting tenants. Money realised on sale was not ploughed back
into social housing, and, because of absurd rules on the use of capital
receipts and the less-than-value sales, councils were prevented from
building new homes to replace those sold. Through this process 'housing'
became only 'property' and Government policy ever since the early 1980s
has been destroying the stranglehold large municipal authorities have on
housing and reconfiguring basic needs as demand in a privatised market.

MEET THE NEW LANDLORD
The legacy has been record high waiting lists, record low new tenancies,
and the run-down condition of council stock due to years of inadequate
council financing. Across Britain, the reality is that council housing was
deliberately run down into a state of dereliction beyond councils'
financial capability to deal with it, to then be used to justify the
wholesale transfer of council housing stock to the private sector. The
accusation is that Housing Associations are now little more than property
development companies, criticised for being deliberately complex
structures, set up that way to both avoid tax (through their charitable
arm) and accountability.  For many housing associations or 'social
landlords', the company structure is ‘Sui Generis’. There are no
shareholders, and they are instead managed by a board, usually comprised
of roughly one-third councillors, one-third tenants (usually selected by
the Housing Association), and one-third outside business interests, which
immediately means the tenants are a minority voice. Tenants rights are
frequently undermined, with tenants’ rights for legal redress seemingly
rendered unobtainable through systematic cuts to legal aid. Through links
to political party donations (i.e. the New Labour project), the web of
vested interests extends from the protection of large financial interests
in the city, to political patronage which continues to the new
administration under Brown (Brown’s main donor of substantial funder is
Sir Ronald Cohen - chairman of one of the largest equity investment funds
in the UK today – Apax). This is exemplified by one of the main housing
associations – Notting Hill Housing Trust, also known through other shadow
identities as Notting Hill Housing, Grove Lettings and others. Housing
Associations benefit from legal and fiscal exemptions which even Rachman
didn’t enjoy.

The overall picture is little more than the legalised plunder of working
people’s incomes and social services for the benefit of an already
privileged elite, as multinational capital encircles like a vulture to
privatise more state services such as in the sectors of health and
education provision. In Dalston, state schools are shut down while Swiss
bank UBS builds a City Academy; in Hackney, swimming pools and leisure
centres stay shut or reopen at middle class prices; doctors’ surgeries,
playing fields, nurseries are sold off and local services cut.  The UK has
been a testing ground for what has been termed the 'structural adjustment
of the North'. This logic is reflected in the new proposals to streamline
the planning process to make it more receptive to the demands of big
business, so that the situation of the Olympic Development Authority being
both chief developer and planning authority at the same time is replicated
around the country.

BANKING ON HOUSING
The underlying process of wealth accumulation through property and rising
rental values, have served to make the local retail environment in many
areas of urban and rural Britain in different ways economically out of
reach of lower income people, such as the non-property owning sector of
society. As with everywhere else, developers are only too keen to cash in
on a rising property market and sell-off to the highest bidder. However,
the extent of this rising property market and it’s socially-divisive
ramifications is entirely due to excessive lending of the banking sector
since the 1980s. Former Governor of the Bank of England - Eddie George,
who headed the Bank for a decade from 1993, admitted to MPs on the
Treasury Select Committee earlier this year that this relaxation of bank
lending policy was deliberate government policy at the start of the 1990s,
admitting that he knew the approach was not sustainable:  'In the
environment of global economic weakness at the beginning of this decade,
we only had two alternative ways of sustaining demand and keeping the
economy moving forward - one was public spending and the other was
consumption through extending credit for increased high street spending.'
(evidence to the trasury Select Committee, 20th March 2007). On May 1997
Gordon Brown told the government of the Bank of England to use consumer
spending to stimulate the wider economy. This to be achieved by increasing
credit and debt. Therefore a credit boom was underwritten by a flow of
mortgage finance, leading to an unlimited amount of money chasing a finite
housing stock, pushing house price inflation above 25% at one point and
high street spending growth to its highest since the late-Eighties boom.  
Rising house prices are central to this policy. UK house prices have risen
by over 100% since 1999 (according to the DCLG mix-adjusted house price
index - Ref: http://www.houseprices.uk.net/articles/odpm_regional/  ).

Against the rising value of their house, owners borrow £264billon per
annum. This represents £564 billion to the banks when mortgages are repaid
with interest. This large sum dwarfs the Government PSBR which was
£43billion in 2006/2007 financial year, as well as the social housing
grant £2bn, the cost of building new houses £20bn, and the value of all
houses existing and new purchased in a year at £200 billion. Consumer debt
has reached £1.3 trillion in 2007 according to the Bank of England. The UK
mirrors the credit spiral in the US. The housing market price-spiral
bubble is similar to the gigantic pyramid of inflated credit. When ‘bust’
follows boom, the financial institutions are best placed to benefit. They
hold the title deeds and those suffering negative equity lose their homes
and their savings.

The ECB (Euro Central Bank) recently underwrote the banking system to
bailout hedge funds who were in crisis as the financial markets panicked 2
weeks ago, pulling something like 95 billion Euro out of their magic hat
like a white rabbit - a measure of the banking system's ability create
money out of nothing and it’s ability to appease the shortfall of
capitalists to secure their speculative venture capital.  In truth, it has
been the necessary oiling of the engine-pistons of the world economy
suffering a sudden shortage of liquidity.

The effects of a relative rising cost of living and the squeezing of
council finances, is a process related to the underlying privatisation of
the money system, i.e. the crowding-out of public money by swelling of
private credit. Local government services are cut and Public-Finance
Initiatives are justified, whilst hedge funds get access to massive credit
to help shore up their ability to profit. The proportion of money created
by government has fallen from around 50% of the total money supply in
1948, to 16% in 1976, to around 3% today, whilst indicating the rise of
economic wealth, may be evidence that can be cross-referenced with this
spectacular availability of credit for speculation and the explosion in
property prices as the private banking sector through the loan-spiral
process has ever-expanded with the relaxation of banking regulations. The
lending of money 2 weeks ago by the ECB served to bail-out a financial
system that has over-extended itself.  On 31st August, Barclays borrowed
£1.6bn from the Bank of England  through the emergency lending fund to
bankroll Barclay’s investments after a sudden shortfall in it’s exchanges
on the open market. A shaky equities market post September 11drew pension
funds and institutional investors away from the stock market and back to
property, with a notable surge in investment of real estate investment
trusts (REITs). A process that started around after 11 September because
the stock market was too risky has recently started to be replicated again
with the August sub-prime crash in the US, together with the biggest cash
injection (3 trillions) in the stock market since the 11th of September
2001.


REITS: WHAT ARE THEY?
Real Estate Investment Trusts – a tool of asset accumulation as an
escalation of the division of wealth and class separation in Britain and
across the world:

REITs are trusts that buy commercial properties, such as apartments,
office buildings, and shopping centres which produce income. When a person
buys shares in a REIT, they become a part owner in all of the property
holdings of the REIT. REITs are traded like stocks on the major stock
exchanges, so they provide the liquidity of stocks with the
diversification and income of commercial real estate. REITs first appeared
in the US, after being approved by Congress in 1960 to offer small
investors a chance to participate in the commercial real estate market.
There are now more than 200 REITs available on the major stock exchanges,
including about 150 REITs on the New York Stock Exchange, and dozens more
on the American Stock Exchange and NASDAQ market.

AGAINST REAL ESTATE INVESTMENT TRUSTS (REITs):
Throughout the world, Real Estate Investment Trust (REITs) are playing a
rapidly increasing role in organizing private financial investments in
housing and cities. Real Estate Investments Trusts (REITs) are joint stock
companies that primarily derive their income from real estate. They are
free from corporate tax and they are legally forced to pay out high parts
of their profits.

After a longer period of development in Northern America disastrous
consequences on social housing are evident:
- Buying out of social, public and low-cost housing
- Rent increase and increase of heating costs, service charges etc.
- Demolishing of affordable complexes and replacement by more profitable
buildings
- Disinvestments, neglect of/worse maintenance of the housing stock
- Pressure to leave on financially disfavoured tenants, replacements by
wealthy residents
- Stop of social neighbourhoods programmes, participation process etc
- Construction on public spaces, privatization of public spaces
- Lobbying governments for weakening legal standards
- Exit to private funds

The large U.S. REIT AIMCO gave a shocking example how these investors
treat tenants.
* Video on forced evictions by AIMCO at Lincoln Place
http://www.youtube.com/watch?v=UngEHGXlHb0

Although negative consequences in the USA, Canada and elsewhere are
obvious, the introduction of REITs in most of the countries took place
without protests and even without critical debate. They just happened in
the extra-democratic spaces where financial lobbyists make their deals
with governments.


HOW DO REITS WORK?
Lots of small investors can take part by owning shares in the Trust which
owns the buildings. This means they can buy or sell their shares in the
trust easily whenever they like exposing homes to the volatility of
speculative markets. No tax is paid by the Trust; tax is only paid by the
shareholder, with their dividend income return added to their annual
taxable income. If the shareholder is a charity (such as a housing
association which has a charitable arm), the shareholder may be exempt
from paying any tax at all.

'In the United  States and France, REITs have lead to higher rents and to
asset stripping; where
the most profitable housing has been enhanced at increased rents, whilst
the rest has been left to decay or emptied for redevelopment or
demolition.'  From London Tenants.org

There are several different types of REITs available on the market:
[1] Equity REITs own and operate income producing real estate, such as
apartments, warehouses, office buildings, hotels, and shopping centres.
[2] Specialized REITs focus on a particular type of property, such as
shopping centres or health care facilities.
[3] Geographically-focused REITs specialize in a single region or
metropolitan area, while others try to acquire properties throughout the
country. Mortgage REITs lend money to real estate owners and operators,
and raise income from the interest payments on the mortgages. [
4] Hybrid REITs own properties and provide loans to real estate owners.


Read more about the international role of REITs and protests against REITs:
By Knut Unger, MF Ruhr Habitat Netz

In Germany, the united protests of the tenants associations, trade unions
and political supporters led to a partly victory in March 2007: Existing
housing stocks in Germany are excluded from German-REITs. Worldwide it is
a unique regulation.
Ref: * RIGHTs, not REITs! German Tenants and International Housing Rights
Coalition demand Right to Housing instead of Right to Profit
http://www.hic-net.org/documents.asp?PID=623

* REITs create rental refugees How US REIT AIMCO deals with renters
http://www.hic-net.org/articles.asp?PID=482

Deutsche Bank is one of the largest shareholders at AIMCO. Deutsche Bank
has signed the so called “Global Compact” which commits them to ethical
standards in their business. The U.S. tenants organization NAHT made it a
national case and wrote letters to the Deutsche Bank asking them to use
influence on AIMCO in order to stop evictions. But Deutsche Bank replied
that they are only holding the shares for a client. On June 4, as the G-8,
the eight richest nations on Earth begin to meet in Germany, the National
Alliance of HUD Tenants, supported by “Empower DC” and “Mobilization for
Global Justice” protested at the offices of Deutsche Bank in DC asking
them to stop investing in gentrifying low income housing.




Taken from FROM CRISIS TO CRASH
Ref: www.beigewum.at


FINANCIAL MARKETS: ASYLUM FOR CAPITAL
The financial markets prove to be an ideal place of refuge for anxious
owners of capital. They are flexible and global. An IBM stock can be
exchanged in a few moments for a Yen credit or a government bond. For big
customers, the expenses are trifling. State incursions like taxes and
restrictions tend to zero.

Profits were and are now gained from shares (dividend distributions based
on business profits), national debts (compound interest financed by
taxes), credits (interest payments from private or state debtors),
organization of firm takeovers or the purchase and sale of securities at
the right moment. The latter is a very popular option since it requires
the least waiting-time. Through deregulation and internationalization,
getting into and out of investments as fast as lightning is increasingly
possible.

With this flexibility, pressure is exerted on everything that does not bow
to the desires of investors. This structure is the central lever for the
restructuring and realization of better profit conditions for capital in
general, not only the much reviled ‘speculators’.