The Only Way to Solve the Fundamentals of the Housing Crisis- Decommodification.

Why are housing costs so high? Housing Financialization.

How do we bring cost down? Decommodification.

Housing financialization is a phenomenon that occurs when housing is treated as commodity- a vehicle for wealth and investment- rather than a social good. The defining feature of financialization is the investment of huge sums of money into the housing market with the sole intention of maximizing return for investors. A system entirely organized around the principle of profit maximization has given rise to a housing market which incentivizes behaviors such as rent seeking, speculation, and fraudulently inflating asset values. These behaviors in turn give rise to inflationary bubbles that drive housing costs upward before bursting, leaving a trail of foreclosure and economic stagnation in their wake. The private housing market in the United States operates almost entirely within the scope financialization, meaning that the entire system is incentivized around short-term profit accumulation.

Housing decommodification is defined as creating systems of housing production that move away from treating housing as a commodity- to be bought and sold for profit- and instead view housing as a social good. There is a growing consensus that the financialized housing market is incapable of meeting the housing needs of working-class people and that cities and states must turn to systems of decommodification to produce affordable housing that is rationally related to the needs of their constituents.

At The Center for Social Housing and Public Investment Inc, we believe that municipally-owned, mixed-income social housing models can lay the foundation for municipal strategies to decommodify their housing stock. These models offer the ability to scale a system of housing that operates outside of the profit motive and that can compete with the private market to drive down housing costs. These broad decommodification strategies are the only way to reverse decades of rent inflation.