The criminal absurdity of the capitalist system is nowhere more clear than in the housing crisis in the United States today. In 2010, there were more than 18.7 million vacant housing units in the country (U.S. Census, 2010) with more foreclosed homes on the market every day. In 2010 alone, the banks filed foreclosures on 3.8 million homes.
Yet, as the number of available houses and apartments grows, more and more people are becoming homeless. Why? Mainly because of very high and persistent unemployment. Of the more than 25 million people who are unemployed or severely underemployed, millions have been out of work so long that even those who once had savings have nothing left.
Bank schemes sell out working families
Another factor: In the boom phase of the capitalist economic cycle that ended in 2007, millions of people were sold “sub-prime” loans by the bankers. These are loans that have low interest rates and thus low monthly mortgage payments—for the first 2-3 years. Then, the mortgage payment “balloons” and goes way up.
Many mortgage bankers were paid bonuses to sell sub-prime loans because in the long run they are much more profitable for the lender and, of course, much more expensive for the borrower. The bankers selling point was this: “Housing prices are going up and they will keep going up. When it comes time for your mortgage payment to go up, you will be able to refinance (take a new loan based on the increased value of your house)— you’ll be able to make the new payments and have money to spare.”
But in 2008, the price of houses began to fall and it has continued to fall. Millions of people who had sub-prime loans as well as traditional mortgages lost their jobs. At the same time, the market value of their houses fell below the mortgage owed, so there was no possibility of refinancing. As the market value of houses shrank, so too did the number of homebuyers who could refinance. The rising number of empty homes further drove down the market value, leading to still more foreclosures, a cycle that continues with no end in sight.
More homes mean more homelessness?
The equation more available housing equals more people without housing is, from any objective or human point of view, utter insanity. It only makes sense if you are part of the 1/100th of the 1%—the owners of the big banks, the finance capitalists. How can it be that their right to reap more billions in profits takes precedence over the right of people to have housing, especially when the needed housing is sitting there empty? The answer is that they are the ruling class, protected by the Pentagon, the police and the prison system. Under capitalism, the right of the dominant class to its property and profits takes precedence over the most basic needs of the people, including a place to live.
The result of the “normal” functioning of this system is a massive increase in wealth at the top and suffering at the bottom. The number of people officially living in poverty in the world’s richest country has grown to more than 47 million, gauged by the ridiculous standard of $22,400 annual income for a family of four. But counting what the government calls the “near poor” (who are also truly living in poverty), the number rises to more than 90 million, or more than 30 percent of the population.
Millions kicked onto the street
The government and a number of private agencies estimate the number of people who are completely homeless during part of the year at about 3 million, or 1 percent of the population. That number itself is an outrage, and it only begins to explain the depth and human cost of the housing crisis.
An article in the August 2011 American Journal of Public Health reported on a 10-year survey, “U.S. Housing Insecurity and the Health of Very Young Children.” In the course of the study, which ended before the current economic crisis, researchers surveyed more than 22,000 low-income households with children under the age of three in seven major U.S. cities.
They found that 46 percent of all households surveyed suffered “housing insecurity”: 41 percent from overcrowding and 5 percent from “multiple moves,” which would include loss of housing altogether. Nearly 20 percent of these households were also “food insecure,” meaning that at times they ran out of food. Children under the age of 3 whose families were “housing insecure” were subject to poorer health, lower weight and “developmental risk.”
As they collect their billions in holiday bonuses, the executives of Wells Fargo, Bank of America, Goldman Sachs, etc., will be untroubled by the misery their system is wreaking on people across the country and around the world. Appealing to their “morality” is a waste of time and energy.
The Party for Socialism and Liberation has raised the demand “Seize the Banks!” That would put an immediate end to all housing foreclosures. The bankers wouldn’t get interest payments anymore, and working-class families could remain in their homes.
In the end, the only way that housing, food, jobs, healthcare and education will truly become the rights of all is by putting an end to the capitalist system itself.