Kate Bradley reviews Urban Warfare by Raquel Rolnik, an important investigation into how capitalism has shaped housing for its own ends.
If you’re reading this in Britain you may remember Raquel Rolnik as the UN Special Rapporteur on Adequate Housing, who, in a two-week visit in 2013, pissed off David Cameron’s Conservative Party by arguing that the bedroom tax was an attack on human rights. The Tories and the right-wing press responded with vacuous insults and racist smears, with the Daily Mail accusing Rolnik of being a Marxist who ‘dabbl[es] in witchcraft’ (a comment I’m sure she and Silvia Federici could have a great laugh about together).
In her book Urban Warfare: Housing Under the Empire of Finance, Rolnik takes on her critics – and a plethora of neoliberal policy-makers – to give a vast and impressive overview of the devastation caused by finance capital’s 40-year takeover of the international housing market. It’s a truly brilliant book, packed with facts and figures to arm you in arguments with proponents of both supply-side, market-driven and Keynesian economics, but also on-the-ground stories of human suffering caused by changes to the housing sector and snapshots of the protests and resistance these changes have sparked.
Urban Warfare is split into three parts. The first covers the huge shift in power that has resulted from the expansion of mortgage lending markets into every corner of the globe. In the second, she outlines the mechanisms used by lenders to expand their profits and reach their greedy hands into the lives of people previously untouched by the high finance of Wall Street and the City of London. In the third, she focuses on large-scale events, such as international sporting events, and how they are used to open up new spaces to capital through land-grabs, social cleansing, and redevelopment of urban areas (as in East London for the 2012 Olympics).
Sub-prime lending and the housing sector
Though ‘neoliberalism’ can often be a slippery concept, one of its features most commentators agree on is the deregulation of the finance sector, and it seems fair after reading this book to see this deregulation as a distinctive shift in capitalism. As Rolnik demonstrates, deregulation as a strategy for reinvigorating capitalism was pioneered by the governments of Margaret Thatcher in Britain and Ronald Reagan in the US, then exported across the world through aggressive policy-making decisions at an international level, through the IMF, the World Bank, and the UN (Rolnik does not pull her punches to spare her former employer). Deregulation has taken the shape of relaxing rules on lending money, particularly through the expansion of the sub-prime lending sector: i.e. the lending of loans and mortgages to borrowers who, in the past, would have had too poor a credit history or low an income to get a loan. This, alongside mass privatisation of public housing stock, has had huge consequences for the structure of our economies. Banks and lenders have effectively, house by house, bought up a huge amount of the world’s housing, placing the risk for irresponsible lending primarily on home-buyers and renters, and making a profit from mortgage payments without having to invest in more traditionally high-risk productive industries.
The sub-prime market came crashing down in 2007-8, and the real wager of these mortgage markets was exposed: if you lose, you lose your house; if we lose, you lose your house. As The Guardian reported at the time, repossessions in the UK hit a 12-year high in 2008 in the wake of the economic crisis. In several places in Urban Warfare, Rolnik draws back from her fairly dense, evidence-based style to explore the human stories that resulted from the mortgage crisis (e.g. p.11 – p.22). For example, she looks to the ‘ghost towns’ of Los Angeles, where defaults on mortgages left swathes of houses empty, then closer to home – Manchester – where the bedroom tax was forcing people out of their already meagre council homes, before looking over to how countries like Kazakhstan had to abandon expensive, futuristic urban developments after the crash, leaving people jobless and homeless. She also looks at social movements around housing and protests against the system that created the crisis, although her global outlook means she does not dwell much on the wins and losses of particular movements, other than in her in-depth study of Brazil in the third section of the book.
What really stands out from Rolnik’s writing on the post-crisis world economy is how utterly unimaginative attempts to ‘restore’ national economies have been. Instead of seeing 2007 as a ‘mortgage crisis’ – which is how she often refers to the crash through this book – major international policy-makers have blamed one-off ‘rotten apple’ lenders and banks like Lehman Brothers for the crash, and pressed ahead with financialisation. The UK provides some of Rolnik’s starkest examples: through George Osborne’s introduction of ‘Help to Buy’ and the New Buy Guarantee Scheme (see p.78 of Rolnik’s book for more), British policy-makers simply began incentivising mortgage lending again, beginning the endless cycle of housing-led boom and bust once more.
How global capitalism has become
Rolnik shows how truly global the financialisation project was in scope. She touches on a vast array of countries, using her experience as UN Rapporteur to focus in selectively on dozens of countries across the world. Too often, talk of ‘global capitalism’ universalises outwards from colonial and imperial centres, but Rolnik helps to really flesh out what globalisation has meant for a huge range of nations and economies. She covers, for example, how Eastern European post-communist states underwent a rapid transformation in the 1990s that resulted in mortgages being offered in Swiss Francs, worsening the 2008 crash for those nations and intensifying the need to migrate to pay back mortgages. She also analyses Brazil in depth, from the ‘Minha Casa, Minha Vida’ programme put in place from 2009 onwards to the vast restructuring of the urban real estate market enabled by the 2014 FIFA World Cup and the 2016 Rio Olympics.
Neoliberalism can so often appear like a rash which spreads across the world, or the unstoppable invisible hand of Adam Smith’s ghost, but Rolnik humanises the problem, showing how global neoliberal policy-making was structured, controlled and enforced by governments, corporations and the individual actors within them. By recognising how policy makers learned from each other and forced each other’s hands, we can understand how capitalism has become entirely – at least at the level of financial markets – a global system. Housing financialisation has been a concerted international programme, and that which is a result of human invention can be subject to human reinvention.
Housing and social reproduction theory
Though Rolnik does not explicitly engage with Marxist social reproduction theory, Urban Warfare made me think about the centrality of housing and housing struggles to capitalism’s structure – and, in fact, how researching these links could take arguments about social reproduction arguments a step further.
Rolnik reinforced more strongly in my mind that housing is not merely important as a community concern – of interest because workers need it to live – but actually that it is a foundation of modern finance capitalism. Though housing may not be a site of the production of surplus value, rent and mortgage payments are siphons from workers’ wages straight into the hands of moneylenders or landlords – meaning we can socially reproduce ourselves less adequately, and wealth remains in the hands of the ruling class even if our wages are higher on paper. Moreover, since many capitalists’ incomes depends on rent and mortgage payments, Rolnik’s book implies that housing is a sector from which we could genuinely endanger capitalists’ profits.
Elsewhere, writers such as Adrienne Roberts and Adam Geary have theorised the relationship between mortgage debt and social reproduction, and Urban Warfare provides a useful reminder that enquiries into the relationship between housing and capitalism are worth pursuing.
Conclusions and Practical Suggestions for Housing Activism
Urban Warfare is a book for many people: Marxists who want to broaden and deepen their knowledge of housing and how it now underpins global capitalism; housing activists who want to learn how and where it would be most effective to build power; social democrats who want (and need) to understand the results of neoliberal housing and financial policy in order to alter their own strategies.
However, I came away with dozens of questions. Whilst housing may be an increasingly central asset for the financial sector to make a profit, does this mean that housing is a site of struggle that we could consider as important as the workplace? Could creative new forms of action such as mass mortgage strikes be a part of an organised attack on capital? The book also made me ask whether home-owners and renters are really on opposite sides of an intergenerational conflict in the way the media – even on the left – present; if it’s actually money-lenders that own many home-owners’ houses, then perhaps there is useful action to be taken against debt and banks as part of the housing struggle. Groups like ACORN, Living Rent and the London Renter’s Union are doing impressive work already, but I feel we would benefit greatly as activists from the huge amounts of knowledge in Urban Warfare.
This book helped me feel more informed to make practical choices in my activism. For example, in a recent ACORN Manchester general meeting, we voted to pick between lobbying the local council to bolster its policy for ‘affordable homes’ (meaning to buy, with a mortgage) or looking at measures to support renters against evictions and rogue landlords. Rolnik made me vote for the latter – since after reading this book, deepening the ideology of home-ownership and opening up more space for banks to sell mortgages don’t feel like the ideal end results of housing activism.
It’s not the easiest going for a casual reader, but Urban Warfare is impressive in how it interweaves a highly researched, academic approach with more narrative sections to show the human consequences of ‘the deconstruction of housing as a right and its transformation into a financial asset’ (p.101). Urban Warfare is a handbook for those who want to understand how housing has become to integral to the world finance markets and to national economies across the globe – and, armed with a search engine for the trickier concepts, it could help us all understand housing as a key site of struggle in our fight against international capital.