New Film Blames Global Housing Crisis On Big Real Estate And Finance

A new documentary film looking at the causes of the global housing crisis lays the blame squarely at the door of the players that have bought in to the rented residential sector after the financial crisis: real estate investors, private equity firms and pension funds. 

Push, directed by Swedish film-maker Fredrik Gertten, argues that housing has become a financial asset, divorced from the people who live in the homes bought by investors, and that individuals and societies alike are suffering as a result. 

Its central protagonist is Leilani Farha, UN special rapporteur on adequate housing, and it follows her across the globe, from Toronto to Seoul via Chile, New York, London, Berlin, Stockholm and Barcelona, meeting those whose lives have been impacted by the lack of genuinely affordable housing in cities. 

“Housing has become a commodity, like gold,” she said in the film. “But gold is not a human right. Housing is.”

“I had been working intensely on reporting for the UN, and I realised, housing is the big issue of our time,” she told Bisnow in an interview. “The issue was so much bigger than I imagined, the scope and breadth of it is truly global.”

The housing market is valued at $217 trillion across the globe.

As well as the big cities that normally draw attention in discussions about housing affordability, Farha spoke to people in Beirut, Lebanon, and Valparaiso, Chile, where the development of luxury apartments is pushing out residents and stymieing the supply of affordable housing. 

The film argues that financial investors are driving longtime residents out of their home in various ways. Rent increases are one obvious one, but renovating individual apartments as a way to push up rents is another, as is undertaking large-scale, disruptive refurbishments to make properties such an unpleasant place to live that people leave. 

Blackstone, as an owner of rental homes across the world, is a lightning-rod for criticism in the film, but Push said the entire financial industry is to blame through the investment in housing when the financial crisis pushed down prices. Blackstone declined to put forward its side of the story in the film. 

The film examines pension funds, one of the central paradoxes surrounding the issue of the affordable housing crisis. These funds need to make as high a return as possible, in order to pay out to their policyholders when they retire. But in investing with companies that want to make returns by increasing rents, they are often making life worse for those very same pensioners.

Government does not escape its share of the blame, in the film or in Farha’s analysis of the issue.

“Governments have created the legislative framework that helps these financial actors,” she told Bisnow, citing policies like low tax rates for REITs. In the film, Nobel Prize-winning economist Joseph Stiglitz said that in bailing out banks and financial institutions rather than individual homeowners in the wake of the financial crisis, funds were repatriated to the organisations that had created the problem in the first place, and the groundwork for the current situation was laid. 

Italian journalist Roberto Saviano, who was forced into hiding after shining a light on the operations of organised crime in Calabria, Italy, in his book Gomorrah, highlighted in the film how tax havens are used to easily funnel the proceeds of crime into the housing sector across the world. 

The film veers between optimism and pessimism about whether the housing problem can be solved. Farha’s background is as a human rights lawyer, and she argued that by framing the issue in the language of human rights, citizens and governments can be empowered to act. 

The film shows her setting up an organisation called The Shift, which has seen city mayors from New York, London, Berlin and Barcelona sign up to push for greater powers to curb rent increases. In a small insight into why rent control has suddenly become a policy tool of choice for city authorities, Barcelona Mayor Ada Colau said she had co-ordinated with London Mayor Sadiq Khan about policies for tackling housing affordability. Both cities are proposing rent controls. 

At other points the film seems more pessimistic. During an impassioned speech at the UN about housing as a human right, the camera caught delegates looking at their smartphones in a bored fashion, and one shopping for a watch. 

In another scene, housing campaigner Florian Schmidt, a district councillor in the super-hip Berlin district of Kreuzeberg, talks to one of his constituents, a baker, who faces being forced out of his home and store because of rising rents.   

How far can you manage to swim against the current?" the man asked Schmidt. “You won’t succeed, the fact is that nothing will change. People have money and they want to invest it. Whatever you do is a drop in the ocean. It’s over, the train has already left the station.”

UPDATE, MAR. 2, 3.15 P.M. ET. Following publication of this story, Blackstone sent Bisnow the following statement: "There is no question that affordable housing is a critical issue but housing costs are going up because there is a significant undersupply of rental housing in many of the world’s cities. As we have said, though Blackstone owns only a tiny percentage of the global housing market, since 2012 we have created over 64,000 new high-quality, professionally managed rental homes, while investing in communities, promoting sustainability and creating thousands of jobs. We own and manage real estate on behalf of our investors, primarily public sector pensions plans and we have a duty to create long-term value, enabling teachers, police officers, firemen, and other public and private sector employees, to retire with sufficient savings and secure pensions. By adding to the rental stock, we are increasing residents’ options, and in many cases offering more affordable housing options in the communities where people want to live.”