Rights Not REITs!

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Rights Not REITs!
By: HIC and Tenants Forum Ruhr
21 March 2007
 

At Friday, March 23, the German Bundestag in Berlin will finally decide on the permission of the disputed tax-exempt real estate companies, REITs (Real Estate Investment Trusts). At this occasion HABITAT COALITION INTERNATIONAL (HIC) – a worldwide coalition for the right to housing - and TENANT FORUM RUHR – a coalition of tenants associations in the Ruhr Metropolitan Area - as well as the "NRW PEOPLE’S INITIATIVE FOR SAFE HOMES AND JOBS" - a mass petition against the privatization of the country owned housimg coppany LEG - call for a stop of neoliberal promotion of financial speculation in the housing and real estate sector.

„Instead of more liberty for speculative financial assets we need world-wide policies, which realize the human right to decent housing, work and life", the organizations stated. „A YES to REITs in Germany would be another dramatic step subjecting the housing markets to the globalized financial markets. A NO to REITs in Germany would be a signal that the financial lobby not everywhere can succeed against social concerns and the human rights obligations of the states."

Since the 1990s concentrated lobbying of the global financial industry succeeded in introducing the US-model of REITs (which combines high distributions of profits with tax exempt) to more than 20 countries with developed or developing real estate and capital markets. HIC received dramatic reports on the consequences of REITs in the housing sector.

Because of the obligation to high distribution of profits and stock exchange listing REITs are forced to gain high net yields from the housing stocks which do not allow long-term social management. Depending on the market environment, the legal framework and the specialization of the REITs, the residential REITs sector in the U.S. shows a strong neglect of maintenance, rent increases above average, constant sales and fusions or eviction of tenants in favour of expensive apartment complexes. In Venice, California, tenants were evicted, because the owner, the large REIT AIMCO, wanted to tear down a historic social housing complex for dense and expensive condominiums. In Canada HIC members concluded that rents in complexes taken over by REITS clearly increased more rapidly than average.

The high-grade speculative Spanish real estate capital invests into the liberal French REITs as tax haven, a model which in the meantime was also used by the US major bank Morgan Stanley for former ThyssenKrupp dwellings in Germany.

By publishing such examples and by the accelerated introduction of REITs in Great Britain, India, Pakistan, Honkong and Malaysia during the recent years REITs become a symbol for financial market-driven globalisation of housing stocks and land property markets. However, they are merely the peak of an iceberg of badly directed and uncontrolled investment liberty.

Demanded and promoted by the World Bank and donor countries, privatisations of public goods and services in many poor countries and cities has led to devastating consequences for water supply. Private water services for economic reasons must insist on cost-covering service fees, which cannot be paid by poor populations. The easy access of international enterprises to liberalized land markets allows them the private appropriation of former publicly owned water and soil resources.

Large-scale projects in private-public partnership pretty often lead to displacements of the native population. An example is the Parota dam project in Mexico.

During recent years HIC had noticed an alarming aggra

Themes
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• Access to natural resources
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