The True Cost of Financialization: Housing, Human Rights, and Climate Change

Abstract

Local governments can play a pivotal role in the fight against the housing and climate crisis. Through their actions they can deliver healthy, happy, inclusive, sustainable cities, which ensure the protection of our environment. While this is clearly an essential enterprise, it will be no mean feat. To succeed will require a fundamental reimagination of our current housing system and the investment structures behind it. Globally, housing has become increasingly financialized. Rather than being treated as a fundamental human right—a place where individuals, families, and communities can live in peace, security, and dignity—housing is often primarily valued as a vehicle for generating wealth ( Farha, 2017 ). Real estate investment has transformed into an extractive industry ( Sassen, 2014 ). It incentivizes the construction of housing, generating greater levels of greenhouse gas emissions, while increasing rents and housing costs, all as a means of generating profit ( Farha et al., 2022 ). To protect our societies and our planet, governments must create policy frameworks that affirm housing as a fundamental human right and centralize the environment, thereby shifting housing investment toward more regenerative practices that contribute to the provision of decent, affordable, and sustainable housing for all. This Policy Guidelines article explores three ways in which the financialization of housing is negatively impacting both the climate and the right to housing and provides policy recommendations based on The Shift Directives: From Financialized to Human Rights Based Housing, to support governments in developing human rights-based policy that can address the climate and housing crises.