Housing is not just another commodity

by Friedhelm Hengsbach Tuesday, Mar. 06, 2018 at 8:08 AM

Like food, clothing, health, and education, housing is an elementary need. On'e apartment is a place of retreat of the private person, a protective- and creative space of inviolable identity, Long-term low-interest housing tax credits & SROs, are alternatives to indifference.


By Friedhelm Hengsbach

[This article published in 2014 is translated from the German on the Internet. Friedhelm Hengsbach is a Jesuit social ethicist and prolific writer who taught at the Oswald Bruning academy for nearly 20 years.]

At the end of February 2014, the social initiative of the two big churches was presented. Church office-bearers appealed to their joint social declaration of 1997. The public presentation was not preceded by any consultation of the church people. Moreover, the church leaders did not argue either from the standpoint of the poor or from an ethical standpoint. Unlike 1997, they did not mention the risk of women, youths or families with children in losing their housing because of poverty. They did not even mention the right to their own apartment and the obligation of the state to provide affordable living space for families with children and to create a child- and family-friendly housing environment. Whoever expected that bishops and the Evangelical Church are still obliged to make available their own property for social housing was disappointed. Therefore, an ethical reflection on the economic and social dimension of housing will be attempted here.

Market Control

As a rule, the social creation of the market is defined by relations of exchange partners who as isolated individuals strive to increase their own advantages. They are well-informed about the chances and risks of exchange and intelligently calculate the expected gain and necessary expense. In a rational choice, they freely decide to acquire the desired commodity and make an appropriate compensation. A market-oriented exchange cannot occur without corresponding purchasing power and wealth. Thus, a functioning housing market assumes a solvent exchange partner.

Elementary Need

Like food, clothing, health, and education, housing is an elementary need whose satisfaction makes possible a life and social engagement befitting a human being. One's apartment is a place of retreat of the private person, a protective- and creative space of inviolable identity, the third skin of the human person, so to speak, after clothing.

If access to the commodity housing is subject only to market control, those not sufficiently solvent in purchasing power for acquiring humane housing have no access to this good. A housing economy that follows the strict rules of commercial competition would exclude those persons and hand them over to a life on the streets, to sleep on park benches or to be banished to corrugated iron huts. Consequently, the housing supply of a democratic society has to follow the principles of need justice, not the principles of performance justice.

External Effects

Housing has effects that surpass the individual advantages of an owner of housing and influences the well-being of uninvolved third persons. Housing is an original space protected outwardly that strengthens partnership, family and friendship relations. Housing helps stabilize social relations. Moreover, it is a place of regeneration that strengthens economic solvency and the social position of the owner of housing. For example, both contribute to the business climate and entrepreneurial success and to the motivation of teachers and students in educational institutions. Chances of ascent, income, wealth, economic power and relational networks of holders of housing are indirectly brought about through economic and social multiplier effects.

Trust-based Goods

The commodity housing falls into the category of trust-based goods. An unequal relation of expertise and information normally exists between those offering the commodity and those seeking it. Those searching for housing cannot know its quality on the first view since this is first revealed after long use. They depend on the offerer or supplier. Their negotiating power is weaker compared to the market power of the supplier. Therefore, there are good reasons for leaving the guarantee or supply of housing options to a public management.

Basic Rights

Housing is a basic right even if subordinate to the right to live a decent life, physical integrity, and work. Housing is listed in the UN Charter of Human Rights and in several constitutions of German territories but not in the Basic Law of Germany. The Basic Law has an abundance of guarantees of civil rights to freedom but there is a white speck regarding social-economic and cultural entitlement rights. This is filled with the social state clause in Art. 20 and 38 of the Basic Law and by Art. 14 (2): "Property obligates."

Political rights of participation come first. Basic rights are listed in their logical sequence, not according to their historical order. Economic-social and cultural basic rights are necessary to fulfill this right of participation. The right to housing for every person is part of that. A social-economic and cultural basic right to housing anchored in the social state clause can be interpreted as a state goal. The state should be obligated to provide adequate housing possibilities for the less wealthy, households with children and senior citizens.

An ethical reflection within the church social proclamation corresponds to the human- and basic rights proclaimed in modern societies. It formulates the following four principles: the goods of the earth are for all people and belong to them. Market and competition are not the only form of control. The right of private property of landlords or builder-developers is not an absolutely unimpeachable right. The profit from the private ownership of the means of production that can only be gained with the help of foreign labor, the natural environment, and social up-front expenditures should be distributed fairly with these three resources through a broad distribution of wealth and residential property or home ownership.

Many function legends grow up around wealth and private property. Property ownership should arise through hard work and an ascetic lifestyle. It can stimulate personal gifts in individuals and unleashes hidden energies. It can strengthen the cohesion of families across generations through the institution of the right of inheritance. In reality, assets, prosperity and exclusive wealth are not only produced through personal talents and interests. The income and education of the parents, book- or accounting profits and market- or monopoly-profits flood owners of property- and financial assets which rarely originate through personal qualities. Therefore, there are good reasons to examine the hereditary claim to home ownership in a supposedly egalitarian performance-oriented society.

Public Goods

Where and how people build their homes is not only left to the private preferences. The housing environment is part of housing: district, forms of housing, sanitary and communicative networks, greenery and access roads. Housing possibilities are subject to the community regulatory authority and are publically provided and jointly used. The interests of private occupants and homeowners are embedded in a public space. Therefore, housing is both a private good and a public good – and is viewed differently.

How are private goods distinguished from public goods? Private goods are subject to the principle of exclusion. Whoever acquires private goods is entitled to exclude others from their use. The principle of rivalry is in force for them. Private goods cannot be consumed simultaneously by different individuals. On the other hand, public goods are not exclusively available. Consumption by an individual is not at the expense of the consumption of others – for example, street lights, lighthouses, the atmosphere, the oceans and the climate. Declaring goods and services public goods is the result of a collective decision and is not forced by a natural phenomenon or an a priori hallmark or characteristic. As a result, the definition of public goods has legal, economic and ethical components: control, scarcity and general access.

Community House Building

Local communities are responsible for urban planning and the organization of a social city in building the German state. They have the commission to make available the public good of inexpensive housing, particularly to the low-income group of the population. They see themselves challenged by an excessive freedom of well-to-do citizens to halt the uncontrolled development of cities that claim more and more natural environment and burden the micro-climate. They strive to concentrate house building and prevent it being displaced by commercial space. They are intent on stopping the segregation of districts and achieving a social mix of the residential population.

Land and property in congested areas are very limited. Therefore, there are good reasons to declare it a public asset and thus evade private control. Local communities should remove the privileged land legislation and use their sovereign authority to lay down land-use plans, urban development plans and zoning plans, to mobilize building sites, promulgate building regulations and actualize unit values (standard values) through a market-consistent balancing. Why should landowners profit from the higher value of their land that arose when local communities expanded and opened up development areas while the public budget is strained with the costs of the infrastructure?

Original: Housing is not just another commodity