“#HousingIsAHumanRight, not a place for ‘big money managers’ to take advantage of opportunities for profit. There’s no advantage of scale benefit here. Blackstone buying these homes doesn’t help ANYONE except for Blackstone investors. Renters and would-be-homeowners both lose.” – Eric Tars, National Homelessness Law Center’s Senior Policy Director, on X
Quantifying homelessness is tricky, even in places like the UK, where technological advancements should make charting the crisis a cinch. A visual diagram of the issue released by the Financial Times suggests that Britain holds the “developed” world record for the highest rate of homelessness per 10,000 people. However, some studies claim that other countries take this title. These studies are basing their statistics on data per capita or snapshots of homelessness, which only consider the number of people who can be identified as visibly homeless on any given night.
Regardless of which study sets the trend, one thing is clear: the UK is a contender for holding one of the highest rates of homelessness.
People here are grappling with an affordability crisis. For this reason alone, homelessness has surged by double-digit increases in all of the following categories:
- The number of unsheltered homeless people in the UK skyrocketed by nearly a third, or 27% to be exact, in one year. This tragically reflects a 120% increase in sleeping rough since 2010.
- Households with children living in temporary accommodations also saw a double-digit increase, shooting up sharply by 12% in a single year.
- The total number of households living in temporary accommodations rose by 10% in one year.
All of the above-listed information was gathered in 2023, placing it among the most current available data for the region.
The Future of UK Homelessness Looks Bleak
As these snapshots and studies are pieced together, a relatively dreary outlook for the future is revealed. We are already seeing ghost towns and shuttered elementary schools stemming from unaffordable housing. And if that isn’t haunting enough, the Guardian reports that thousands of local children are projected to live out their entire lives in England’s dismal temporary accommodations, which many have referred to as low-income “slums.”
Extracting Wealth: The Hyper-Financialization of Housing Creates Abhorrent, Unlivable Conditions
We recently spoke with Senior Policy Director Eric Tars of the National Homelessness Law Center to tackle the problem at its root. Tars has been highly critical of corporations like Blackstone and other venture capitalists taking advantage of what he calls a “captive market.”
It should be noted that while the housing market is often depicted as a place for entrepreneurs to make money, the “product” people are using to profit from is something people need to survive, not just something they want to indulge in. If major corporations were buying up bottled water in bulk and marking the prices up by double-digit hikes, we would refer to it as price gouging. Why don’t those standards apply to housing?
“What we are seeing in the US, the UK, and around the world is this sort of hyper-financialization of housing,” Tars explained. “These hedge funds and venture capital funds are looking around, and they are seeing that the housing market, as it’s currently designed, is a place that they can exploit to get a huge profit margin for their investors.”
“Just as they might invest in a mining company to extract wealth from the earth, they are now investing into housing to extract wealth from our communities and the pockets of people who need that housing to survive.”
Bailed Out: How Banks and Venture Capitalists Profited from Problems They Created
The introductory tweet above refers to a recent example of this kind of extraction.
This past June, trillion-dollar corporate giant Blackstone reportedly struck a 580-million-pound deal with construction company Vistry for 1,750 UK-based rental homes. This move will undoubtedly undercut would-be renters and potential homeowners alike, squeezing them further out of the increasingly unaffordable housing market.
While we may see this as a relatively new inception, Tars says it dates back to the 2007-2008 financial crisis, when our leaders chose the elites over the general public for the infamous financial bailout.
“Housing is one of the basic human needs,” he continued. “Therefore, it is a captive market. Everybody needs it. And what we’ve seen is that in the wake of the 2007-2008 financial crisis, which was incidentally caused by these investors pushing the housing bubble, creating these exotic financial instruments that they could invest in, bundle together, and then sell, buy, and sell at ever-increasing prices that weren’t actually related to the underlying housing, but that impacted the underlying housing – after all of those homes were foreclosed on, many of them got bought up by those very firms that caused the crisis in the first place.”
“If we had treated housing as a human right,” Tars continued, “what we should have said is that, as the governments are bailing out these banks, if we’re using our public dollars to do that, then we should get some public good out of it. But instead, the banks got their toxic assets bought out by the public and returned to record profitability.”
“Those homes, which should have stayed in the hands of the homeowners, instead got bought up by those same financial investment firms and turned into rentals,” Tars said. “Now, we have these homes that used to be available for individuals to own being taken off the market so that the housing market gets constricted, and people who want to buy housing have fewer homes available because they’re all owned by these giant corporate investors. And those corporate investors are, in turn, using those homes as rental properties.”
“Because of the overall lack of affordable housing in our communities, those same corporate giants can charge really high rents,” Tars continued. “Therefore, renters are also being harmed by this approach.”
These predatory practices have been in place since the 2008 recession but are only recently being exposed as harmful to the public.
Reuters reports that private investors are betting and outbidding their way to the top, spending hundreds of millions to squeeze out other potential buyers, namely the working class. Among these conglomerates are:
- Royal London Asset Management
- Aviva
- M & G
- L & G and many more
Placing Profit Over Public Interest Fuels Homelessness
The very fact that demand severely outweighs housing supply is predatory because it means people in positions of power essentially have all the chips. Literally and figuratively, they hold the keys to the future of the UK and beyond and are able to lock a large portion of everyday people out of the housing market altogether.
However, this is only one of the many gaping flaws of letting big money managers extract wealth from people, families, and communities. Another equally significant issue is the fact that this changes the purpose of housing.
Imagine the people who own most of these homes, who don’t see them as necessary resources but as a road to riches.
“Their primary goal is not to provide housing to people,” Tars said. “Their primary goal is to make giant profits for their already extremely wealthy shareholders. Rather than treating housing as a human need and as a human right, our free-market policies have unbalanced the housing market hugely in favor of these corporate investors who can come in, pay cash for houses, and outbid the families who need them.”
“They’re able to just keep churning housing into their possession and then charging exploitative rents for people who need the housing to survive.”
This is to the detriment of everybody else.
“This helps nobody. It doesn’t help renters, it doesn’t help homeowners or would-be homeowners, and it doesn’t help communities because all of that money that used to circulate within these communities, going into local businesses and services, is, instead, getting extracted and going into these far-off financiers’ pockets,” Tars said.
“Just as a mining company extracts wealth from the ground, these venture capitalists are extracting wealth from our communities. Inevitably, they’re going to leave them as desolated as a strip mine leaves the environment after a mining company has gotten all that they want out of the ground,” Tars concluded.
Talk to Your Legislators About Drafting and Enforcing Regulations that Favor the Public
Ultimately, it is not this handful of private investors with their vast portfolios and exploitative practices who run the world. It’s the working class who, despite being exploited, are the backbone of thriving economies.
A “developed world” doesn’t exist without the everyday people who build and maintain it. These buildings and properties would have no value without those who landscape the grounds, clean the interiors, and manage the facilities. Yet, the very individuals who make these places livable often cannot afford to live in them.
At least 3.7 million people are working jobs that do not pay a living wage. Imagine if every one of them picked up the phone and demanded change. That first call starts with you.
