Housing Has Always Been A Commodity, So What’s The Big New Deal?

four monopoly houses and a hotel on stacks of coins
Housing Ladder 1 photo by Andrew_Writer is licensed under CC BY-NC 2.0
Housing is often portrayed as a stepping stone to wealth.

Currently there’s a great deal of hand-wringing about the ‘commodification’ of housing, in particular its link to exploding housing prices and to blossoming housing crises everywhere. Some go so far as to suggest that commodification is the root cause of every housing crisis.1

Have you wondered what the fuss is about? After all, national dreams home ownership would seem to be founded on the bedrock of commodification. The dream is not only to own your own home, but at the very least that it will retain its value. More hopefully, with careful upkeep and management, when one day you or your heirs sell the home, it may provide a tidy return on the investment.2

But this ‘incidental’ commodification of a home (when secure shelter is the first and foremost reason for ownership) is not what worries economists. In their view, the legions of bogeymen who currently threaten housing stability and affordability everywhere are those whose principal, if not only, interest in homes is for investment purposes.

Global moneybags looking to store some of the their excess wealth in secure, profitable investments overseas, such as London, New York or Vancouver? Or wannabe little-guy stock market gamblers who want to stick a few dollars in an investment that ‘always’ appreciates?

Understanding the details may be less useful than appreciating the spirit of real estate commodification. Usefully, an understanding of this spirit is quite easy to come by. Take an insightful bath in the hopes and dreams of housing commodification by reading the following, at G2:  A Beginner’s Guide To Real Estate Investing

Commodified housing as pure investment does not necessarily preclude its use as shelter. Renting out an investment portfolio of housing, be it one unit or a thousand, may be a useful strategy for a profit-focused owner. On the other hand, as evidenced by hundreds — even thousands —  of units of investment commodity standing vacant in major cities, using commodified housing as shelter may be of absolutely no interest to real estate investors at all, simply adding to the calamity of commodification.3

Footnotes

  1. Here’s an example: From Vancouver, BC: Housing Unaffordablity From A Human Rights Perspective
  2. Sometimes, a tidy investment proves elusive: Bad News For ‘American Dream’ Buyers. Your Home Ownership Strategy May Suck, Big Time.
  3. See also: Affordable Housing Activists Eye England’s 216,000 Empty Houses, and Housing: Asset Or Necessity? Disobedience May Define It, Along With The Future of Capitalism