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Cory Doctorow

Oct 11 • 33 tweets • 8 min read

Shelter is a human necessity and a human right. The decision to turn housing into the major speculative asset class for retain investors and Wall Street has made housing a disaster for people *with* houses - and a catastrophe for those without. 1/

If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

pluralistic.net/2022/10/11/ren… 2/

America has a terrible, accelerating homelessness problem. Many of us share this problem - obviously, people without houses have the worst of it. But no one benefits from mass homelessness - it is a stain on the human soul to live among people who are unsheltered. 3/

However, there is an answer people lacking homes, one with a strong evidentiary basis, which costs significantly less than dealing with the crises of homelessness: give homes to people who don't have them. It's called #HousingFirst, and it works:

endhomelessness.org/resource/housi… 4/

But Housing First has a fatal flaw: it merely helps people without homes find them. It does not generate excess profits for a highly concentrated sector. No one profiteers off Housing First, and so there is no well-funded lobby to promote it. 5/

However, there *is* a highly concentrated industry with sky-high profits and a powerful lobbying arm that has its own proposal for ending homelessness. 6/

It's the private prison industry, and its proposal is to make homelessness illegal and then put all the homeless people in private prisons:

invisiblepeople.tv/private-prison… 7/

A wave of laws criminalizing homelessness has come before American statehouses, and behind them is a deep-pocketed astroturf campaign run by The Cicero Institute, a "libertarian" think-tank that has widely shopped legislation called the "Reducing Street Homelessness Act." 8/

Under the proposal, anyone caught sleeping on the streets would be liable to imprisonment. Further, homeless people judged to have mental health issues by police officers would be either imprisoned or locked up in mental heath facilities. 9/

@invisiblepeople

As Kayla Robbins writes for @invisiblepeople, such a law would substantially raise the stakes for any homeless person seeking help from police or other services - if they decide you look "mentally ill," they could lock you up indefinitely. 10/

Where will the money for all these new prison beds come from? By diverting budgets currently allocated for permanent housing. 11/

It's weird that the Cicero Institute would devote so much energy to discrediting Housing First and promoting criminalization ("libertarians" who want to throw millions of people, mostly Black and brown, into prison indefinitely have a highly selective definition of "liberty). 12/

But there's at least a circumstantial case for why they would undertake this project: their founder is Joe Lonsdale, the billionaire Palantir co-founder whose VC firm 8VC has made sizable investments in private prisons. 13/

Americans without homes are in a terrible place. How about Americans *with* homes? Well, obviously they have it better - but it's not as though they're well-served by market-based housing, either. 14/

Treating a human necessity as a speculative asset has all kinds of negative outcomes - for your house's value to continue to rise, the plight of tenants has to steadily worsen. 15/

The resale price of your home will include the expected returns from renting it out (even if the new owner doesn't become a landlord, they're going to have to bid against someone who would), and rental returns go up when tenancy protections go down. 16/

Meanwhile, the spiraling price of housing - driven by the policy requirement to drive up asset prices to please homeowning voters - means that your kids are going to end up (someone else's) tenants, exposed to the cruelties you promoted to safeguard the family asset. 17/

You're not even going to be able to pass that asset onto your kids - focusing on asset appreciation, rather than public service provision, means that you will have to liquidate the family home to pay for your eldercare and your kid's student debts. 18/

Back in 2021, I wrote, "The Rent's Too Damned High," about the way that treating housing as an asset rather than a necessity has made everything else worse:

gen.medium.com/the-rents-too-… 19/

@business

But here it is, 2022, and it's *even worse*. Writing for @business, @tracyalloway and @TheStalwart describe the enweirdening of the housing market as interest rates rise.

bloomberg.com/news/articles/… 20/

Housing is becoming less affordable: with interest rates going up, the cost of a new mortgage is unbearable for many working people. What's more, banks are tightening up their lending criteria, making it harder to *get* a mortgage in the first place. 21/

This may feel familiar - it certainly echoes the housing market after the Great Financial Crisis of 2008. But unlike 2008, the people who have houses aren't losing them in walloping great numbers. 22/

Partly that's because we're not letting giant banks steal their houses with mortgage fraud:

web.archive.org/web/2017100513… 23/

But it's also because banks started requiring larger downpayments after the GFC, so borrowers aren't saddled with terrible debt-to-equity ratios, and many homeowners were able to refinance at rock-bottom prices during the lockdown. 24/

And, unlike 2008, most mortgages today are fixed rate - even though interest rates are rising, your mortgage rate is locked in. 25/

That's produced a very weird circumstance: no one can afford to buy a house, but prices aren't going down. For prices to go down, we'd need to see more houses on the market, and no one wants to *build* a new house in this environment. 26/

With no new houses going up, any additional supply would come from existing homeowners selling their homes. 27/

But when you sell your home, you usually have to buy another one, and that means swapping your 2% 2020 mortgage for a a 5% 2022 mortgage - which translates to a six- or seven-figure increase in the overall price of your home. 28/

Has someone offered you a better job in another city or state? Great! Is it worth paying hundreds of thousands of dollars more for your mortgage over the next 20 years? No? Okay, I guess the answer is no. 29/

To recap: treating shelter as a speculative asset means that we're about to permanently imprison thousands of homeless people at enormous public expense. It means that your kids are doomed to being rent-burdened tenants with no legal rights for their rest of their lives. 30/

And it means that you are locked into the house you were in when the music stopped, no matter how many reasons there are to go somewhere else. 31/

Turning housing into an asset doesn't help you, the person looking for a place to live. But it's *great* news for Wall Street and billionaires like Jeff Bezos, who are buying up whole neighborhoods and turning them into high-rent slums:

benzinga.com/real-estate/22…

sImage: 32/