By GMHA (@gmhousingaction)

 

After months of freezing the democratic running of the Planning Committee (supposedly due to Covid-19 but perhaps an opportunistic Executive looking to get previously rejected schemes passed without scrutiny is a better explanation), there is a full meeting on July 30^th — this Thursday. Faced with a wave of new proposals, the Manchester City Council (MCC) Planning and Highways Committee needs to show that it has the courage and expertise to stand up to the developer lobby inside and outside the Town Hall, and to put local communities ahead of private profit.

 

The most worrying of the new applications is Plot 11, First Street from Downing, which sits across from Hulme ward and looks likely to have a significant impact on the community. Perhaps the worst architectural proposal to have made it to the Planning Committee yet, with a range of buildings of between 10 and 45 stories, this application tells a story of pure and simple greed as it seeks to expand the co-living sector.

 

In our Homes not Assets report 2018/19, GMHA outlined the nature of this new type of development:

 

Co-living has been promoted by think tanks such as the centre-right Social Market Foundation as offering cheaper accommodation within major cities. It has been classed as affordable housing by Manchester City Council. However, the necessary compromises in living space and the private nature of the scheme means co-living should not be conflated with shared living found in forms of community-led housing (such as cohousing). The focus on middle-earners makes this a questionable definition of affordable housing, and it therefore has not been classed as such for the purposes of this report. Concerns remain about the living conditions of tenants in such schemes and the long-term impact on local communities.

 

The First Street site already seemed destined to be over-developed, with permission granted in 2016 for 623 apartments. With this revised application, the developer is now asking for permission to build 1,349 units with 609 apartments and 875 studios (2,224 bed spaces total), meaning we could expect up 2,500 new residents. Many of these residents will be forced to live in tiny, cramped 'standard' (20-21sqm) and 'compact' (18-19sqm) spaces which even the developers in the planning application suggested “would not be acceptable as permanent homes and the applicant accepts that the length of tenure would be restricted to six months”.

 

How has this been allowed through the development process? In a December 2019 report, the council itself argued for caution with regard to co-living:

 

This product is new and untested in the Manchester housing market.

 

Testing it out through a 2,000+ bed scheme is not a cautious approach, especially considering there are only 1900 co-living beds across the whole of London. If there were any issues, it would be too late for Manchester to address them. There are already at least two co-living schemes under development that can be used to assess this model. To grant planning permission now for this project would be to completely ignore the principle of test and reflect. The December report reiterated this need for caution:

 

Given that the product is untested in Manchester, it is not considered appropriate to approve a significant level of co-living accommodation.

 

The developers have tried to allay fears about this new type of housing by suggesting in the application:

 

This type of accommodation could meet demand for shorter term lettings from those on short term fixed contracts, employers looking to house employees or contractors for short periods, people who want a space during the working week, or visiting academics and researchers.

 

So what they are actually proposing is short-term rental apartments, a housing model designed to meet the short-term needs of business with little interest in the long-term improvement of the area. Anti-social behaviour is common with such schemes, alongside significant extra pressure on local services such as GP surgeries.

 

Perhaps most worrying, it appears that the December 2019 report was ‘updated’ by the MCC Executive in July 2020 to facilitate this development, in what looks like a suspicious change of position since earlier in the year. If anything, the Covid-19 emergency makes this type of development far less desirable, with one London council already raising the alarm. MCC argued in its report:

 

Co-living should add value to existing wider, economic-led, regeneration frameworks, drive employment, create place and support the talent needed to support growth. Co-living developments would require quality design and space standards, except where there is a compelling justification for an alternative approach.

 

Clearly none of these conditions hold in relation to the Plot 11 development, and the Planning Committee need to recognise this. Finally, the report makes clear that “the City Council has a land ownership interest in the site”; hence the committee must be informed about the financial benefits to the local authority that would accrue from this development. This is particularly important as the developer may be using the co-living model to avoid making a financial contribution to the city it stands to profit significantly from. Downing argues in the application that:

 

Due to the type of accommodation and use class, the development would not appear to be considered in the local planning framework for a contribution to affordable housing or provision of other s106 contribution.

 

In short, 1,349 units, for which the developer can charge higher rents for smaller spaces, with not a penny going towards affordable housing or neighbourhood improvements. It is an attempt to extract as much profit as possible from the site via a housing model that is neither tested nor required.

 

The application ignores the problems that co-living may cause for the city and leaves it with a potentially problematic building development that may turn into a slum of the future. The only course of action for the Planning Committee is to reject this application and force the developers back to the drawing board. The consequences of signing off Plot 11 as an over-developed co-living scheme would be felt for many years to come, especially by the adjacent Hulme community. Let’s hope the Planning Committee are prepared to act, now that they have finally been allowed to resume their powers.

 

 

25 July 2020

By Isaac Rose (@_isaacrose) and Siobhan Donnachie (@siobhan_e_d)

 

Last Friday, over fifty Dorchester Court residents staged a protest outside their millionaire landlord’s offices in Waterloo, demanding: no evictions, essential repairs and rent reductions. Their action, which has been accompanied by collective rent strikes during the pandemic, is part of a wave of mobilisations globally that have been marked by a resurgence of the rent strike tactic. In Britain, this follows a revival of rent strikes in recent years, most notably in student housing. This upsurge is significant because over the previous 40 years the tactic of the rent strike had all but disappeared in the fight for decent housing.

  

This piece will situate the recent growth of interest in rent strikes within a broader history, both in Britain and elsewhere. We will consider in detail the London Renters’ Union ‘Can’t Pay Won’t Pay’ campaign, by critically comparing it to other rent strikes. Above all, we will ask — what are the potentials and limitations of the rent strike, particularly in the context of increased atomisation of the private rented sector and the narrowing of security of tenure since the 1988 Housing Act. Can the rent strike be a collective bargaining tool for renters as we move forward into what is likely to be a prolonged economic recession induced by the pandemic? And if not, what should our strategy as a housing movement be?

 

*

 

To date the largest rent strike in British history is the Glasgow Rent Strike of 1915. The recent centenary has led to a greater appreciation and awareness of the significance of this moment, and it is worth retouching upon a few details here.

 

Led by the Glasgow Women's Housing Association, the 1915 Rent Strike saw 20,000 tenants withhold their rent from their private landlords, in response to a rent hike. At that time 88 percent of total housing provision in Britain was met by the private rented sector, putting working people at the mercy of unscrupulous landlords. The central pillar of the rent strike lay in Govan, the shipbuilding district on the banks of the Clyde. There, the woman’s housing committee led by the previously unknown Mary Barbour, organised constant propaganda meetings (including factory gate meetings), rent strikes and physical resistance to evictions. 

 

 

The strike was not a spontaneous uprising, but rather the outcome of years of organising both by tenants and the wider trade union movement. It came at a time of rising industrial militancy and widespread class consciousness. Renters and workers knew themselves to be in a clear antagonism with their landlords and bosses. The rent strike forms only part of a much broader story of working class radicalism in the early decades of the 20th century, which would reach a dramatic peak in January 1919 when the British Government would bring tanks onto the streets of Glasgow to suppress revolt.

 

Nor was militant tenant action confined to the Clyde alone — similar actions broke out in Northampton, Birmingham, areas of London and in Birkenhead; where two thousand women marched on the town hall, carrying aloft banners proclaiming: “Father is fighting in Flanders, We are fighting the landlords here.” Indeed, the actions that sprang up in Britain were part of a global wave of rent strikes, which by this period had, as Mike Davis has argued, ‘become a familiar weapon in the class arsenal.’ Wherever you look you find rent strikes led by militants — socialists in New York and Vienna, syndicalists in Paris and Glasgow, and anarchists in Barcelona and Buenos Aires.

 

The strikes spooked the British government, heavily conscious of their damaging effect on the war effort. It acquiesced to the tenants’ demands. Legislation was swiftly passed in 1915 with the Increase of Rent and Mortgage Interest (War Restrictions) Act 1915, which brought into effect rent controls. While the government had hoped for this legislation to be temporary — a response to wartime emergency — the militancy from the tenants of Glasgow and elsewhere that continued into the 1920s, signified by a number of further rent strikes, made it impossible for this legislation to be repealed. Rent controls would remain a part of the British housing settlement until the 1988 Housing Act. Of similar significance to the creation of rent controls were the reforms passed by the Housing and Town Planning Act 1919 (the ‘Addison Act’) which made state provision of housing a right for the first time in history.

 

 

Throughout the ‘20s and ‘30s, rent strikes continued to be deployed as a means of working class mobilisation over housing — perhaps most notably by the militant Stepney Tenant Defence League in the 1930s, one of whose leaders, Phil Piratin, would go on to become the Communist MP for Mile End in the 1945 election. The simmering class conflict and renter organisation was a significant factor in pushing the government to begin constructing council housing — which would set a blueprint for the mass housebuilding programmes of the reformist governments after the second world war. It is no exaggeration to say that it was out of the prolonged social struggle over rents, instigated by the dramatic strike of 1915 in Glasgow and continued in the decades hence, that the social democratic housing settlement that would predominate throughout most of the second half of the 20th century was won.

 

*

 

In the immediate postwar era, the rent strike went into abeyance. Good quality council housing, built to the exacting specifications of Nye Bevan’s vision, resolved the housing question, at least temporarily. Yet by the 1960s, the rent strike had returned within the context of a broader wave of working class militancy, in response to increasing attacks on the social democratic settlement by the right. The period from the ‘60s onwards saw a number of significant rent strikes by council tenants, including in St. Pancras, London (1959–1961); East London (1968–1970); Kirkby, Merseyside (1972–1973); and Clay Cross, Derbyshire (1972-3). These strikes were all in response to the hiking of rents by Tory administrations, whether in local government in the case of the two London strikes, or by the Heath government’s Housing Finance Act in the case of the latter two. It is worth noting that the rent strikes of the middle decades of the 20th century were unlike the strikes of Glasgow in that they were by council tenants, not against private landlords but against local authorities and the government. 

 

 

The political contestation of the 1970s ended with the decisive victory of the right and organised capital. This had an enduring impact on the housing settlement, the consequences of which we live with today. Thatcher’s victory in ‘79 paved the way for the Right to Buy legislation of 1980, perhaps the most significant privatisation in British history. After winning a second election in ‘83 and defeating her staunchest opposition, the NUM, in ‘84; Thatcher further reshaped housing with the 1988 Housing Act.

 

The 1988 Housing Act is the most significant piece of legislation governing today’s housing settlement. Above all else, this Act lies at the heart of the current precarity of renters. It created the legal form of the ‘assured shorthold tenancy’, today the default category of tenancy in England and Wales. These tenancies have limited security of tenure — a mandatory minimum tenure of 6 months which is the shortest in Europe. It also introduced various grounds for eviction, including Section 8, which makes rent arrears a mandatory ground for eviction (i.e. no discretion for mitigating circumstance, e.g. loss of income); and perhaps most significantly Section 21, the ‘no fault’ eviction, which allows a landlord to evict a tenant without any reason. The 1988 Act, and the precarity that it threw renters into, was a crucial condition for the rapid expansion of buy-to-let mortgages. Finally, the Act also stands as a bookend to the period ushered in by the 1915 Glasgow Rent Strike, as it was this legislation that repealed rent controls, the strike’s most significant victory.

 

In this new context, the conditions which were the bedrock of the strikes of the ‘60s and ‘70s no longer held. The selling off of council housing destroyed the communal basis for organised rent strikes against a single landlord, as well as dramatically expanding homeownership. Tenants in the private rented sector in contract largely held an individual, atomised relationship with a mosaic of small-time landlords. Similarly, the conditions that were essential for the tenants movements of the early 20th century — a organised and militant working class movement — no longer held either, having just been dealt a historic defeat. Above all, Thatcher’s forging of a new housing settlement set the grounds for a private rented sector that would be characterised above all by a profound precarity on the part of tenants — who live under the shadow of an entire legal edifice designed to work in the interests of landlords. The extremely unequal legal dynamic that developed led to a significant weakening of the ability of tenants to organise, defend and collectively support one another. 

 

*

 

In the neoliberal era, there has been an almost total disappearance of rent strikes in Britain, until recent times. Successive governments continued to propel forward Thatcher's vision of a ‘property owning democracy’. Policy reflected the dominant belief — that homeownership represents the only feasible way to obtain decent housing. The focus on homeownership was designed to erase the potential for opposition by holding out for the possibility of a ‘stake in the system’. And if the carrot didn’t work, the stick would — debt, in the form of mortgages, hung over homeowners and acted a powerful disincentive to strike action in the workplace. This was a conscious move to minimise labour disruption and working class organisation.

 

Yet two key trends have served to disrupt this terrain and have re-ignited the housing struggle. First, is that since the mid ‘00s, the growth of homeownership stalled and went into reverse, most notably among the working population. In the absence of public housing, the private rented sector has returned, and millions now are trapped within an unequal and oppressive system. Although private renting was envisaged by neoliberal ideologues as merely a stop-gap before people ‘got on the housing ladder’, the reality is that without council housing, the private rented sector would never solely perform this function, and the sector would grow. And over the last two decades it has grown, dramatically, now representing around 20% of housing by tenure type across the country — though in some regions, e.g. London and the other major cities, this proportion is far higher. 

 

The result is that there is now a sharp class antagonism experienced by millions, between renter and landlord. In the worst cases, landlords are abusive, negligent and vindictive; and even in the best case, with a so-called ‘good landlord’, the reality is that this system remains exploitative. The depredations and humiliations meted out by landlords to their tenants has been the primary drive behind the growth in tenant unions in recent years, such as ACORN, the London Renters Union and Living Rent.

 

The second key trend is the financialisation of housing and urban space. This process has seen housing shift from being primarily about its use value (as homes for people) to its exchange value (as an asset for landlords, developers and finance). Raquel Ronik has shown how the seizure of rental markets by global finance has become a mechanism for rent extraction and wealth accumulation. In the UK this dynamic has been most extreme in London, where international financial flows have reshaped access to housing, driving gentrification and displacement; yet it is by no means confined to the capital. Manchester too is being reshaped by this process, as GMHA has documented over the past three years. Financialisation has had an upward pressure on rents and growth in build-to-rent models. 

 

 

In other countries, for example Spain, the role of financial actors in housing is more developed, and we witness the rise of ‘global corporate landlords’. Large wealth funds, such as Blackstone, a private equity firm, have entered the housing market directly. They have bought up rental property and let it out to tenants, often buying when house prices collapsed. This was in direct response to the collapse in the mortgage market after the crash. In Spain, this concentration of ownership led to a vigorous kickback from organised tenants. In contrast, in the UK the mortgage market has remained profitable, in large part due to the favourable conditions for buy-to-let landlords. A result is that the presence of global corporate landlords has not been as advanced here over the last decade as in Spain, Ireland or the USA. The economic crisis following COVID-19 may however accelerate the rise of the global corporate landlord as a major player in the UK context and this needs to be followed closely. However, one notable exception from this general picture, is student accommodation.

 

Student accommodation is one of the most lucrative sections of the UK property market. Universities began selling off student halls in the 1990’s and allowed developers to circumvent housing regulations that are not applicable for student accommodation. A high proportion of student accommodation is inadequate and very expensive. Militancy in student housing has developed in recent years in response, leading to the first wave of contemporary rent strikes in the UK. Most notably the ‘Cut The Rent’ group formed by UCL students, who organised a five month rent strike in 2017, winning concessions on rent and financial support totalling a £1.5 million. The success of the UCL action resulted in copycat rent strikes taking place on other uni campuses, notably at Sussex Uni where the local branch of ACORN provided key organisational capacity.

 

 

In areas where financialisation of the rental market is most advanced, where capital invests in housing directly and not through the mediator of the banks and mortgage holders, we see something of a return to the key condition that enabled rent strikes in the ‘60s and ‘70s — a single landlord. Largely though, the UK rental market remains a mosaic of relatively small landlords, with renters holding an individual relationship to their landlord. Yet this sector has grown dramatically, with a lack of council housing and easy mortgage options for buy-to-let landlords. It is the growing social weight of renters that has provided the basis for the growth of tenant unions. The result of this transformation is that asset ownership has become a key faultline in the UK today. The economy has become increasingly a rentier economy. The country is organised in the interests of those who gain from this economy, and dominated politically by what Will Davies has termed a 'rentier alliance'.

 

*

 

When the COVID-19 crisis hit in March, tenants unions globally were part of a wave of organised response. In Barcelona, 16,000 households have signed up to rent strike, the details of which were covered in Benjamin Irvine’s piece Spring in Huelga. Similarly, in the USA tenant unions have transformed the inability to pay rent into a collectivised struggle demanding rent freezes, reductions and changes in housing policy. An alliance of national organisations and community leaders in the USA have been coordinating and mapping the rent strikes. As of May 1st, around 200,000 people had taken the pledge to rent strike, out of whom 31 percent said they didn’t pay rent in April. Many tenant unions and other campaigns across the USA have planned localised rent strikes — in New York alone there were an estimated 12,000 pledges to not pay rent recorded before plans for strike action on May 1st. These strike actions have led to change at a state and city level.

 

In the UK the housing movement also moved in response to the crisis. Tenant unions such as ACORN have been at the forefront of the response — coordinating mutual aid, campaigning for rent freezes and an eviction moratorium, and in some cases such as at Lancaster University’s student halls, organising rent strikes. The movement nationwide was able to force the suspension of section 21, and fight for the extension of this ban till mid August. In London, the London Renters Union (LRU) has seen their membership double from 2000 to 4000 members during the crisis. They have responded with a ‘Can’t Pay, Won’t Pay’ campaign (CPWP), pushing five key demands to collectively support renters in the immediate situation and fight for radical change in the long term. The demands are: suspension of rent, cancelling rent debt, permanent eviction ban, introduce rent controls and eradicate the hostile environment within housing. Since the campaign began almost 4,000 renters have pledged to join and support those resisting evictions, access support and advice and withhold rent.

 

 

The option of a general rent strike was debated within LRU. After a lengthy internal discussion, organisers reached the conclusion that striking while Section 21 stands would place their members in extremely precarious situations. CPWP, while initially conceived as a rent strike, has remained more like an online pledge and campaigning tool. Because of the fragmentation of the private rented sector, there is no mass renter subject that could mount an effective strike against a single target. In lieu of this, CPWP was positioned as a collective campaign to encourage members to prioritise essential living costs during the crisis, with LRU on hand to organise member defence to members on a case-by-case basis. 

 

However, LRU has actively been supporting small scale rent strikes. Most notably is Dorchester Court Tenants Union (DCTU), now a branch of LRU. DCTU organised a strike of 96 tenants who are demanding essential repair work, rent reductions and no evictions for rent arrears. The tenants of Dorchester Court formed a union in November 2019 in response to inaction regarding poor conditions from their millionaire landlord. The fact that the tenants had collectivised prior to the COVID-19 crisis ensured that they were able to stage a rent strike. The tenants at Dorchester Court for the majority share the same landlord, enabling them to mitigate risk to individuals and by withholding rent collectively. Having a single landlord is a prerequisite for deploying the rent strike, and the Dorchester Court experience bears similarities to the student rent strikes in this way.

 

 

Amy, an organiser from LRU, believes that the crisis has strengthened the collective consciousness of renters. She hopes that this shared collectiveness has changed the perception regarding class antagonisms and racial inequalities in housing. This growing collective consciousness has led to tenant union membership growth, as people look to mutually support one another in the face of a government that prioritises the economy over human life. As well, it has not only enabled local networks of solidarity, but has begun to mount national pressure on the government. We could point to the recent organised pushback by renter groups against Labour’s policy shift under Starmer as another example of the growth of this consciousness today.

 

It is this rising consciousness that offers hope for the future. Looking back to the early rent strikes at the start of the 20th century, organised by tenants in the private rented sector, one thing is immediately clear — that these strikes and movements were highly conscious, led by militants who understood the world in terms of class antagonisms. This consciousness was the product of decades of working class organisation. In order for the clarifying moment of our times to have legacy beyond the immediate crisis, the patient and steady work of organisation will be key. We must avoid the situation when the lockdown ends and a form of ‘normality’ resumes, that the upsurge in militancy dissolves. We must see the corona crisis for what it is: not a decisive shift in the balance of forces but one, significant, step upon a far longer road to building power from below.

  

*

 

The history of tenants’ struggles in Britain provides many examples of rent strikes. Rent strikes have been at their most powerful when they have emerged from high levels of organisation and a confident militancy by tenants. Through withholding rent and challenging landlords, housing struggles have been a crucial component of broader working class struggle. In the last decade, housing has returned as a major political question. The growth of the private rented sector and the financialisation of urban space has created a sharp class antagonism between those who need housing as homes, and those who utilise it as assets. It is out of this context that the contemporary housing movement has grown — resisting estate demolition, and collectivising renter struggles through tenant unions. 

 

However, thus far rent strikes have only had a limited role within the revived housing movement. The notable exceptions have been in student housing, and in those places with a single landlord — Dorchester Court being an example. These strikes recall those of the ‘60s and ‘70s, where tenants were united in opposition to a single landlord. However, in many ways, the wider picture of today’s private rented sector recalls that of the early 20th century, with little security and limited rights for tenants. Yet what is missing now is a level of organisation, militancy and class consciousness that characterised the great rent strikes of 1915 and after.

 

The crisis brought about by COVID-19 has unveiled the divide between landlords and tenants, and contributed to growing levels of organisation and militancy among tenants unions. The moment has been an opportunity seized by tenant unions, all who have seen an increase in membership and activity during this period. However, far greater troubles lie ahead of us. Over the course of the pandemic, almost half a million have now fallen into rent arrears, and are now at risk of eviction. Many can’t pay — and shouldn’t pay. The likelihood of a prolonged depression is high, with the spectre of mass unemployment looming on the horizon. When the government lifts the eviction ban at the end of August, we can expect a wave of evictions, potentially up to 230,000 at risk of losing their homes.

 

Additionally, the longer term dynamics at play could lead to a concentration of asset ownership by the rentier class. Banks are currently pulling back lending to first time buyers and those with limited capital — which will price more out of homeownership, and could drive small landlords out of the market. Some landlords may be forced into sales, as they enter financial distress. This, combined with falling house prices means that for those with access to large amounts of capital, purchasing housing while the market is low, with the intention to rent it out, could be an attractive investment opportunity. An outcome of the crisis may well also be the acceleration of financialisation in the housing market — with investors and global corporate landlords moving to build-to-rent. 

 

 

The organised renters movement’s next steps are clear. First, we must be emphatic: we will resist evictions by any means necessary. Protecting people at risk of eviction from the fallout of the crisis has to be the highest priority. This priority implies a tenant union organising model that puts the difficult work of member defence at its heart, as well as the organisation of anti-eviction teams to physically block evictions where necessary.

 

Second, in the medium term, the tenant unions must maintain their growth, working to amass a greater social weight over the coming years. There are no shortcuts to building power — this will require organisation, fighting and winning cases, and continuing to collectivise the struggle against landlords. It will also require that tenant unions become embedded presences in working class communities, defending members against landlords, but also looking to become hubs of community strength and pride. As well, tenant unions must work to build links with other institutions of the organised working class, most importantly the trade unions. Earlier in July ACORN and Unite the Union signed a recognition agreement, which is a hugely positive move. Bonds of solidarity like this must be built not just at the top of the organisations but at every level, right down to the base. 

 

Third, the movement should map ownership. Portfolio landlords and corporate landlords in the build-to-rent sector should be targeted as a priority. The collectivisation of tenants under one landlord provides an opening to rent strikes and other decisive actions which can act as test cases to advance the renters struggle as a whole. 

 

Finally, we must not neglect the government as a target. The government must be forced to stick to their promise to abolish Section 21 and we must extend our demands to include reforms to Section 8, particularly so that rent arrears become a discretionary not mandatory ground for eviction. Winning these two crucial changes to the 1988 Act would, by removing immediate legalised precarity for renters, grant renters more space to organise — a ‘non reformist reform’ that could open up further terrain in the struggle against landlords. Our demands on government must advance, to the crucial calls for rent controls and public housing.

 

 

The current crisis has been an opportunity seized by the housing movement to organise precarious renters. It has provided stark evidence of whose side the government is on, and it has laid bare the injustices at the heart of our housing system. Yet, rather than this being a decisive moment, comparing current activity against the historical record demonstrates the distance yet to be travelled if today’s renter movement is to reach past heights. Above all the renters movement must — like our forebears in the Glasgow Women's Housing Association or the Stepney Tenant Defence League — raise our horizon from simply defending tenants against individual landlords, to a fundamentally transformed housing settlement and society. 

 

Organisation, agitation and political education will be key, and a justified sense of militancy in the face of landlords and their lobby. The fundamental dynamic underpinning the politics of housing in Britain today is not going away. Renters must organise themselves — and for those seeking transformative social change, renters unions and the fight for housing is certain to be a key battlefield in the years to come.

 

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Acknowledgements: The authors would like to thank Jacob Murkherjee and Joe Billsborough for their helpful comments on earlier drafts of the piece, and Amy Smith for agreeing to be interviewed.

 

This piece is third in a three part series published by GMHA exploring the impact of the current crisis on housing struggles. You can read part 1 on Spain’s rent strikes here, and part 2 on the financialisation of Berlin’s urban space here.

 

Isaac Rose and Siobhan Donnachie are co-ordinators of Greater Manchester Housing Action.

 

12 July 2020

By Joe Bilsborough (@joebilsborough) and Isaac Rose (@_isaacrose)

 

We've built a Rent Calculator. You put in your gross annual income and your monthly rent and it tells you when your 'freedom from rent day' is — i.e. when you finally stop working for your landlord. You can use it here: http://rentcalculator.xyz

 

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There’s an old piece of propaganda that in recent years has been recirculated by housing campaign groups. It shows a top-hatted seal, busy escaping a housing terrace with a stack of banknotes in his mouth. Hot on his tail chases a desperate man. The seal is the landlord; and to him the man (his tenant) exclaims: “my gawd! My wages!”

This message — of extraction, dispossession, wage theft — is seldom heard today. Contemporary critiques of the private rented sector by campaigners tend to focus on misbehaviour by landlords; those forcing through ‘no fault’ evictions, failing to do repairs, or cramming tenants into overcrowded buildings. The problems with renting are thus presented as the result of an aggregate of ‘rogue landlords’, the solution therefore lies in regulating the sector better and kicking out the bad apples.

 

By focusing on the horror stories of bad landlords, campaigners have inadvertently provided an opening to the landlord lobby to defend themselves by pointing to the case of the ‘Good Landlord’. During the current crisis, this discourse has been marshalled particularly to defend landlords from rent cancellations. The ‘Good Landlord’ is entitled to their rents! Honest grafters that they are, they’re providing housing and merely prudently looking out for their own pensions. Why, the cry goes, if they stop receiving rent how will these poor Good Landlords survive?

 

The problem with this approach is it forecloses the possibility of a more structural critique of landlordism. By focusing on the rotten apples, we miss sight of the broader picture — that landlords make their money not through the production of anything useful, but by parasitically taking the wages earned by workers in the form of rent. The whole system by its very nature is exploitative. It’s set up to allow those with access to capital to live off the work of others through parasitic rent-seeking. In short, as Tom Lavin has demonstrated meticulously and comprehensively, the Good Landlord is a myth.

 

This was once widely recognised. From Thomas Paine — ‘The earth, in its natural uncultivated state… was the common property of the human race… it is the value of the improvement only, and not the earth itself, that is individual property’ — through Mill — ‘They [landlords] grow richer, as it were in their sleep, without working, risking, or economizing’ —  and even at times Winston Churchill, an anti-landlord, anti-rentier sentiment was not unusual. Today though, we have lost sight of it.

 

Yet the current crisis has once again thrown it into sharp relief. Warnings from March that without government action (e.g. rent cancellation) much of the support measures from governments would end up in landlords’ pockets went unheeded. Research has shown that the government’s measures have overwhelmingly favoured rentiers, with up to 45% of the furlough going straight on rent and debt repayments to landlords, banks and other lenders. This totals to a staggering £10bn under the three-month lockdown. Simply by sitting on their assets landlords have seen their wealth increase. At the same time, their tenants, who are most at risk from the economic turmoil, face wage cuts. All of this will be compounded by what looks to be a deep and lasting economic contraction.

 

All of this highlights the extractive dynamic underpinning landlordism: when you rent a house, while you work you are in effect working—for a portion of the year—for your landlord. Your wages, earnt through your labour, go straight into their pocket. At the end of every month, as your paycheque comes in, a chunk of it goes straight to your landlord. You pay them simply for existing. My gawd! My wages!

 

This demonstrates the absurdity of rent. As a movement we must expand our critical horizon, beyond simply bad landlords, and to the very mechanics of rent itself. 

 

Our rent calculator

 

To highlight this, we’ve created a rent calculator. Our calculator is built on the concept that when you rent you’re working for your landlord. From this concept it flows that every year there comes a day where you stop working for your landlord, and start working for yourself — call it your Freedom From Rent Day. 

 

By inputting your monthly rent and your annual income, our calculator deciphers which day of the year is your freedom from rent day. To consider this more concretely, take the following examples. For all rents we have used the ONS averages. 

 

Consider a nurse living in Manchester on a salary of £24.000 per year. They share a two-bedroomed house with one other person, paying £410 per month on rent. They stop working for their landlord on the 24th March. Their housemate however, is on the minimum wage and making £17.000 per year. They’re working for the landlord for a larger part of the year — their freedom from rent day is the 22nd April.

 

Now imagine that the nurse decides they no longer want to share a house, and instead rent a place of their own. Their rent is £700 per month. The price they pay for this is clear: more of their life is taken up working for their landlord. Their freedom from rent day is now much later, on the 22nd May.

 

Now consider the situation in London. It is here that the rentierisation of the UK economy is most advanced, and rents are at much higher levels. Here the time people work for their landlords is far starker.

 

Consider a teacher, earning £35.000 and living in Hackney. They share a two bedroom flat, and are charged £866 per month in rent. They don’t stop working for their landlord until the 5th May — a full third of the way through the year. Consider now a cleaner who works at their school. They’re paid just over the minimum wage, earning £18.500 a year. Hackney is too expensive, so they live further out, in a two bedroomed flat in Haringey, paying £750 per month in rent. They spend over half their year working for their landlord — their freedom from rent day is the 9th of July.

 

The situation in London is so extreme that even somebody earning a large income of £50,000 per year, and living in their own flat in Hackney, paying £1,470 per month is still spending five months of the year until the 1st June working for their landlord.

 

The point of our Rent Calculator is as an aid and instrument to all renters, setting our clearly and starkly how much time all of us spend working simply for our landlords to enrich themselves.

 

Conclusions

 

The Rent Calculator presented here is designed to illustrate our core contention, that the very fact of rent-seeking by landlords represents an injustice. 

 

Our current model of housing provision in this country enables those with access to capital, to further accumulate their capital through investing in private rental housing. Through doing this they add nothing productive to the economy or society, and merely skim off a portion of the wealth created through their tenants’ labour. If you’re a tenant, this means that you’re spending a portion of your year working for your landlord.

 

As our calculator shows, this is particularly extreme in London, where the private rented sector is most advanced and unaffordable; but also that housing currently has a disproportionate impact on those on low incomes. As in other things, it costs more to be poor.

 

We hope this calculator and this piece can be taken by the movement as an invitation to start thinking about rent and landlordism in a different way — not merely a problem in the case of the ‘bad’ or ‘rogue’ landlords, but a structural, endemic and intrinsic injustice.

 

Once we acknowledge this, the solutions we must advocate for become clear. Rent controls and council housing are the only solutions to the housing crisis — and housing, a fundamental human need and right, must be taken out of the hands of those who see it solely as a means to expand their capital.

 

You can use our rent calculator here: http://www.rentcalculator.xyz Enter your income before tax, and it automatically calculates the percentage of your take-home pay that is spent on rent  

 

Isaac Rose is a coordinator of Greater Manchester Housing Action. Joe Billsborough is a researcher at the Centre for Local Economic Strategies. The Rent Calculator was built by Matthew Wedge-Roberts.

 

8 July 2020

By Daniele Tognozzi (@danieletognozzi)

 

“It’s not easy to buy when the news is terrible, prices are collapsing and it’s impossible to have an idea where the bottom lies. But doing so should be the investor's greatest aspiration.”

 

Howard Marks, Oaktree Capital Management.

 

At the beginning of 2020, Prequin announced private equity firms led by Blackstone Group Inc. and Carlyle Group LP had amassed almost $1.5 trillion in unspent capital, the highest year-end total on record. In 2019 roughly $450 billion worth of private equity deals were amassed, signaling that mergers and acquisitions activity for 2020 could be on a scale not seen since the financial crisis of 2008/9.

 

This does not come as a surprise: global recession was long announced and big financial players had done the necessary work to get ready for the eventuality, in particular stockpiling capital. But how is that about to impact — if not already impacting — the global real estate market?

 

In recent years, the housing and retail market of the city of Berlin has been entirely transformed by the deals of large financial players. In 2004 a private equity consortium led by Firm Cerberus and Goldman Sachs’ Whitehall fund acquired the 67,000 apartments of Berlin’s publicly owned real estate company GSW for 405 Million Euros — or rather, 6000 Euros a piece. These flats, including 23 houses that GSW received as a present from the Land Berlin in 1993, were eventually merged into a public company, Deutsche Wohnen. After years evading maintenance and targeting tenants, a wave of protests against the business model of Deutsche Wohnen — and of other landlords owning more than 3000 flats in Berlin — evolved into a referendum aimed at their expropriation and re-communalisation. The campaign is now moving to the second and decisive phase, triggering further debates.

 

Part of the progressive coalition of Berlin supports the referendum, and mayor Michael Müller stated that the privatisation of GSW was a mistake, expressing the wish to buy back the houses. But how could those houses be sold so cheap in the first place? The precondition that made the privatisation possible — and in the eyes of the Wowereit coalition justifiable — was the fact that GSW was indebted for 1,5 Billion Euros. Debt, after all, is exactly what private equity deals are targeting: large scale, high-risk leveraged buyouts, using in large part money borrowed from institutional investors such as - mutual funds, pensions, health insurance companies and foundations.

 

Given the big wave of indebtedness the Coronavirus has sparked, the fear is that this will result in multiple profitable opportunities for venture capitalists whose business model is based on the eviction of tenants and revaluation of the property.

 

In Berlin, retail spaces are most affected: with many shops, pubs, clubs and venues that have kept their door closed for months, or that still don´t know when they will open again. The reality is that many businesses are either shutting down or struggling for their existence. Moreover, while the city council managed to find a way to approve a rent-cap law aimed at freezing all the apartment rents in Berlin until 2025, this law does not apply to commercial spaces, whose market can be regulated only at a federal level. This results into profit oriented investments being channelled from the housing to the retail space market, which exposes neighbours to a further threat of gentrification.

 

The senate of Berlin offered a prompt response, distributing federal subsidies of up to 15,000 euros (Soforthilfe II) to cover ongoing material and financial expenses. But for many businesses this will not be enough, and the only other viable option is an interest-free loan from the federal government, possibly leading to indebtment with no certainty on how and if it will be possible to ever pay back the borrowed sum.

 

While individuals and businesses are struggling to overcome financial trouble, the state support offered by the Bundesregierung and the Land Berlin at the onset of the Covid-19 crisis (Soforthilfe I & II) has been given to businesses with the specific aim of covering business expenses. In other words, to keep paying the rent.

 

But why should the state offer support only in order to pay the rent, when the easiest solution would be to help the individuals affected by the crisis, and suspend the rent instead? The question becomes even more relevant when we consider that large part of Berlin is owned by public companies that manage more than 3000 apartments, or tax-haven-based subsidiaries of corporate groups whose names are not even publicly accessible information. In fact, not only large financial players are reshaping the city at their convenience, but it is also increasingly and extremely difficult— when not impossible — to tell who they are.

 

One example is the case of the bookshop Kisch & co, who at the outbreak of the Covid-19 crisis received a termination of the contract of their historical shop in Oranienstraße, Kreuzberg, where they have been for the past 23 years. The news came as soon as their premises were sold by US billionaire Nicolas Berggruen to an anonymous subsidiary based in Luxemburg. Extensive research by Christoph Trautvetter of the Tax Justice Network found that the premises also link to Sigret and Lisbet Rausing, the billionaires and heirs of Tetra Pak founder Ruben Rausing. In an open letter published by all the threatened tenants, they declare unacceptable that while maximum transparency is required of the existing tenants — who have to disclose all business balance sheets as a prerequisite simply to continue their tenancy — the new and secret owners do not even have to disclose their names and addresses. How does, indeed, such a lack of transparency fit in a constitutional state?

 

Another business dealing with anonymous owners is the pub Syndikat, whose managers took on the difficult challenge of disclosing the real owner behind the subsidiary based in Luxembourg which terminated their contract after 33 years of activity. They drove to the address listed on their rent contract and found a mailbox with 76 company names on, which after some research all led back to Mark, David, and Trevor Pears, three reclusive brothers from London who own a majority of the privately held William Pears Group property company, and are worth about $4 billion. Thanks to their research it is now public information that the Pears family manages more than 3000 apartments throughout Berlin, a fact that without their engagement, even the Senate of Berlin would have remained unaware of.

 

The eviction of the pub Syndikat, alongside many other pending eviction notices, has been postponed due to the corona crisis, but is now due to happen over the summer.

 

Berlin cannot afford — and does not deserve — to lose more of its social space just in order to guarantee the profits of financial corporations, or some anonymous billionaire. In this light, the corona crisis is only the continuation of a permanent state of crisis which is structural to neoliberal capitalism. In it, the indebtment and economic distress of the many will always represent a next profitable deal for the few. The Mietendeckel (rent freeze), due to run until 2025, is regularly depicted by biased media as a draconian policy aimed at frightening investors. In reality, it is merely one of many vital interventions into the mechanics of the market we will have to implement, if we are to save our cities from the logic of financialised space and city making. Limited in time, and caught in the crossfire of real estate attorneys urging to prove it unconstitutional, the Mietendeckel alone will hardly ever manage to scare investors, let alone put a stop to gentrification, displacement and exclusion. In order to achieve this, a deeper understanding of the technicalities of global finance and a general reassessment of the collective idea of radicality are needed, now more than ever.

 

 

Daniele Tognozzi is a researcher and author based in Berlin.

 

This is the second in a series of pieces examining the impact of the COVID-19 crisis on housing. You can read the first, on rent strikes in Spain, here.

 

Image credit: Annie Millward

 

24 June 2020

By Benjamin Irvine (@econbecon)

 

In the absence of adequate income support or rent relief programmes from the government, Rent Strike Committees across Spain are bringing renters together to negotiate with landlords and enable people to stay in their homes at a price that gives them room to breathe.

 

Precipitated by the coronavirus lockdown and the large — and in many cases total — loss of income this has implied, thousands of renters across Spain have been on rent strike for 2 months. More than 16’000 households have signed up to a national Rent Strike campaign since it was called on the 30^th of March. Galvanized by the memory of those who lost their jobs and then their homes during the 2008 crisis and the austerity that followed, the strike has been a pro-active step taken by the renters movement to ensure that the costs of this crisis won’t be pushed onto the poor and working class again. The slogan is simple: “No cobramos. No pagamos” (“if we don’t earn, we don’t pay”).

 

The movement for housing justice in cities like Barcelona has in recent years been cutting its teeth resisting touristification, the deliberate liberalisation of the rental market and flows of speculative real estate investment from tax-haven domiciled vulture funds. Between 2013 and 2019 rental prices increased by an average of 50% nationally — and over 50% in cities like Barcelona and Palma, according to a report by the Bank of Spain. Over the same period, the nominal value of median incomes increased by just 9.5% and 6.9% for the lowest 25% of earners, according to Eurostat. Traditionally high rates of owner occupation are declining and more people are renting — in large part because employment contracts have become increasingly insecure — which has meant fewer people are able to access mortgages. The low stock of socially rented housing (one of the lowest in the EU) has been in gradual decline whilst the number of residential properties converted to short term holiday lets has reduced the supply of housing and pushed up rents. A substantial chunk (6.8%) of Barcelona’s rental housing stock is listed on Airbnb, which is estimated to have increased rents by an additional 7% in the most affected neighbourhoods.

 

 

 

 

It was under these conditions that neighbourhood housing unions and the Sindicat de Llogaters (union of renters in Catalan) — key actors in the current Rent Strike campaign — were formed. Following the introduction of policies designed to to “stimulate” the rental market through reduced tenancy lengths and the granting of tourist licenses for the conversion of housing into holiday apartments, the Sindicat de Llogaters was founded in 2017. The organisation took key lessons from the PAH (Platform for People Affected by Mortgages) that organised groups of neighbours had the power to physically block evictions and set up a similar organisation for the issues facing tenants. The tools and strategies they have developed have been central to how the Rent Strike is being organised.

 

There has been a progression in the way the Sindicat works, says Javi, a 32/year/old software engineer active in the Organisation Committee of the Sindicat de Llogaters in Barcelona. The union initially functioned as a campaigning platform to denounce the issues facing tenants and formed part of a coalition calling for 30% of all new developments to be dedicated to affordable, social housing — a demand which successfully entered into planning law in Barcelona in 2018. The Union also started organising tenants facing rent hikes when vulture funds bought their buildings: “Then a year after the sindicat’s foundation, we launched the Ens Quedem campaign, which means "we’re staying" and this is key to how we work right now”, Javi tells me. “The whole campaign was about doing these assemblies that we now do every Friday, in which people explain their problems and we do a collective assessment. We don’t provide a customer service, we don't have like a window and a queue and you pay your membership and then we solve your problems, it doesn't work like that. You come to the assembly, you explain your problem, and the people help each other.”

 

The union also started focusing in on a strategic type of problem: tenants whose contracts were ending and whose landlords were telling them they had to accept substantial rent increases to stay. For these cases they have developed something of a blueprint. The first step is for the tenant to investigate their landlord. How many properties do they own? Are they a fund or a bank? The second step is to speak with the neighbours or other tenants of the same landlord to see if they are facing the same problem. Once the tenants are organised and have chosen they want to stay the union initiates a negotiation:

 

“the sindicat sends a letter or an email to the landlord, saying ‘okay this person is not alone. He or she is a member of the of the tenants union and as such she can count on all of the protection or all of the energy, all of the tools that an organisation with nearly two thousand people may give them.’  We try to not threaten people or anything but just we just tell the landlord, ‘hey, this person is not alone’ and they’re not going to tolerate being kicked out because they can’t afford the new price.”

 

And if nothing is agreed by the time the contract ends there is a final element to this strategy: “you don't pay the increased rent that your landlord is trying to impose on you, but you keep paying the same exact rate that you were paying. That's for two reasons. One is to bargain and to explain to the landlord that we want a negotiation and this is what we offer. The other reason is that if you stop paying you will end up with an eviction in two, three months. But if you continue paying the same rent, there will be a legal process but it will be to determine if your contract has ended. And it will be longer, nine-to-twelve months, and that's time that we use to negotiate with the landlord.”

 

These tools of assemblies, a process by which renters self-capacitate themselves and the experience of rent disobedience in bargaining with landlords is central to how the rent strike has been organised and spread. The Sindicat de Llogaters and Sindicato de Inquilinos in Madrid acted quickly as the prospect of a prolonged lockdown emerged. They reached out to other housing groups but also labour unions and social movements across Spain and formed a campaign for a Social Shock Plan. Against the usual economic “shock treatment” of austerity they called for a social “shock” or “crash” plan, including the suspension of rents but also the socialization of private healthcare resources and a Universal Basic Income.

 

This campaign had been calling for the suspension of rents for two weeks when the coalition PSOE-Unidas Podemos government finally announced measures to alleviate peoples inability to pay rent amidst the unprecedented shutdown of the economy. This included an automatic six-month extension of all contracts that were coming to term during the state of alarm and a six month suspension of evictions, which the movement claims as victories. The government did not however suspend rent and instead proposed advancing “micro-loans” to renters to pay their rent with credit, to be paid back over the following years. Landlords with ten properties or more may choose between offering a 50% reduction or a “moratoria” on rent — with the arrears to be paid back in the future and only in the case that tenants can sufficiently demonstrate that their economic vulnerability was due to covid-related social distancing measures. The means testing process resembles a “vulnerability bingo” with poor odds for most renters. It goes without saying that renters struggling to pay now due to losing a job or being temporarily laid off with reduced income were already stretched tight. They aren’t going to be able to afford increased rent payments in the future. As Javi describes the logic of the campaign, “if the productive economy is stopping, then non-productive economy or the rentier economy should stop as well.”

 

Following the announcement of these measures the campaign called for a Rent Strike. A template letter requesting rent cancellation during the state of alarm was published on the campaigns website, one for the landlord and another for the housing ministry. Rent Strike Committees were set up and those signed up to the campaign have been linked up to their nearest housing group, sindicat chapter or — where there was previously no tenants union — with each other. Despite the fact people have been largely communicating online, according to Javi, it was important to organise people by neighbourhood: “we know that this is going to be a long struggle. So after the quarantine it makes sense to have people organised locally”. Within the weekly Rent Strike Committee video-assemblies, “the idea is to address doubts, the questions that people may have and try to negotiate with landlords. We always suggest to try and make the landlords understand that there is a crisis coming and they should negotiate a new price that people are able to pay because, eventually, all prices are going to go down. Everyone can’t be evicted because that's going to be a mess.”

 

 

A key function of the assemblies is providing reassurance to people feeling anxious about breaking contract terms and entering into a legal dispute. Experienced union members encourage newcomers and even other seasoned members to remain calm. It is, after all, the landlords that have more to worry about if the issue is not resolved quickly. They reassure people  struggling to pay the rent that it’s likely that they can access free legal representation. They explain that it’s very rare that the landlord brings the case to court: “what they want is for the renter to pay or to leave,  whilst what the sindicat struggles for is to pay what we can”. With automatic six-month lease extensions, judicial processes paralyzed and evictions officially suspended for “vulnerable households”, the mood in the video assemblies I attended has been buoyant.

 

Nevertheless, the effect on rental prices two months into this crisis is muted. Many in the Sindicat, including Javi, are sceptical about the neutrality of the country’s main property websites: “they don’t want to accept that prices are coming down”. In February, Spain’s antitrust watchdog opened an investigation into the country’s largest property platforms for price fixing. These include the Idealista behemoth whose price data is frequently referenced to supplement patchy public statistics on the rental market.

 

If sales prices do come down, there is a danger that, like the last time the property bubble temporarily burst, international investment funds swoop in to buy up on the cheap. “We're preparing. We were already warning against these international actors before and we know them better than ever”, Javi assures me.

 

Another battleground and possible avenue for the renters movement in Spain as a result of the covid crisis,  Javi suggests, are tourist apartments. Once part of the rental housing stock they’ve lain empty during the crisis and perhaps won’t find a tourist market for some time: “We've seen how thousands of units or apartments have been vacant during the duration of this crisis because they used to be Airbnbs and tourist apartments. Lots of people including the sindicat are going to demand that these homes are returned to the the housing stock as public housing. I think that there is a lot of backlash to the tourist apartment thing, not only in Barcelona or Madrid, but also in Lisbon and many other cities”.

 

The Spanish government has not suspended rent but — thanks to the strength of renters unions and the Rent Strike campaign — many people have won reductions to their rent from their landlords and are negotiating new prices they can afford. Against the charge that this is not a rent strike, but just people unable to pay, Javi concedes: “that's fair enough. We see this not as a tool that we use in an ideal situation but as a context. We are organising people to stop paying at the same time in a coordinated manner. Going to these committees and coordinating everything, it's also to create a movement, to grow the movement of tenants so that they are strong political subjects and that they can bargain better for their rights.”

 

 

Benjamin Irvine writes about the economy, lives in Barcelona and is a member of the Sindicat de Llogaters

 

22 June 2020