A storm made of storms
Coronavirus is a storm of ten-thousand smaller storms. Originally brazenly minimised as some exotic, tropical virus that Britain could somehow fend off with a giant Union Jack, a red-arrow flyby and a box of buttery crumpets, Coronavirus is now here, properly. A sitting Conservative government has sent everybody in the country (apart from critical workers) home, and not even the brightest public health experts in the country can calculate how long for. We’re early in the curve, watching Netflix, waiting for it to blow the doors off of a long-suffering, quivering National Health Service that has been gouged, hacked, and sliced apart by austerity politics for the best part of a decade. The Coronavirus is the whack-a-mole of neoliberal philosophy. Solve one problem, and a new one appears somewhere else. But it’s involuntary, less fun, nobody knows how long it’ll last and there are no prizes, even for a world-class performance.
Running on fumes
It’s the end of the month, the rent is due, and a government-issued ban on going to work means a chunk of Britain is already broke, and another chunk is on borrowed time. If thousands aren’t running on fumes by the end of this month, they will be within weeks, and as the layoffs accelerate (which has its very own curve), it’ll be even worse by May. This is problematic for reasons commonly known as ‘maths’ — particularly given how the lower/middle access their income. The vast proportion of people’s access to money is through the kaleidoscope of an economy whose leadership won’t stop talking about how ‘wealth is zero sum’ but don’t address that wealth is not income, wages of which are a subtraction on a business’s finite cash reserve. This does not favour the working poor in an economy designed, incentivised and explicitly rewarded for its ability to maximise the return on everything. Personal wealth is a pipe dream in a world where the cost of living is always slightly too high, and personal income is slightly too low, and in the gig, self-employment or services economy, unstable, too.
Cool. On a related note, the British government just introduced a 3-month mortgage holiday for landlords affected by the Coronavirus that doesn’t extend to renters (although it does temporarily limit eviction), so I suppose that’s one way to arm a vicious, highly-motivated class consciousness movement overnight.
A very British property kink
Renter rights in the United Kingdom are a famous, slow-burning political hot potato. Some part of this is because Britain has a sort of perverse fetish for property-ownership — in that everyone, for some reason, wants to be a landlord — a feeling which then flanks a sort of generalised, muscular vindication of the behaviour of current landlords (as both small-time individuals and national commercial and residential property enterprises). In the more heavily-socialised states in Europe, renters rights are fiercely guarded. It’s easy to find examples — Germany is a good one, but there are others too (Spain, France). Renters’ rights are propped up by a series of federal or state-specific laws designed to protect tenants from exploitation in a housing market that could otherwise become both delicate and predatory without state intervention.
The profound explosion in UK housing prices in the last 15 years has created a rental market that now props up ownership as an exclusive club, and one that is often (but not always) only accessible via certain personal circumstance or privilege. It’s not uncommon for renters, particularly young, city-based renters (where the majority of the work is) to have to pay out more than half of their income in rent — before factoring in other arbitrary fees or securities. This significant, artificial increase in major, fixed costs against wages, means breaking out of the rental cycle is either a very long, very slow grind — or impossible. The reasons are simple. Average housing deposits are now £35,000 nationally and £110,000 in London and the average national salary — across all professions is £35,000.
Babe, you made a good, good thing outta bad, bad news
The rise and rise of the the long-term renter has deformed the UK economy by sliding a highly efficient extraction unit between the working lower middle and their ability to spend their money in the wider economy, especially in large cities. A potent combination of private landlords, commercial estate agents, and a government-endorsed batting-away of the renters rights discourse has created a climate by which the game is rigged hotly in the favour of the seller. Times are good for rentier capitalists generally. But like many of the major economic pillars of neoliberalism, it’s one that is extremely profitable but fragile, even at the best of times. In the context of a national viral epidemic, this fragility is replaced with …nothing. It’s not that the equation doesn’t balance anymore, it’s that the equation has evaporated. One of free capitalism’s cute side-effects — that wealth begets wealth — implodes immediately in the many sectors now built on a massive, infinite credit assumption.
The bad news for mortgaged landlords is that it looks like there might now be nobody left to pay their buy-to-let mortgages. The bad news for paid-up landlords, is that it looks like there might now be nobody left to pay their wages. The worse news, for both, is that tenants are very likely to be living in their buildings, because legal due process is required to successfully evict, and eviction proceedings have now been temporarily suspended by the government. (And even if they did successfully turf their tenants out, there would be nobody new to move in anyway, so the return on that investment might even be net negative.) Either way, there’s no money so you can’t have it.
28% of Conservative MPs are private landlords
There are a number of serious vulnerabilities in the rental economy, many of which have contributed to a collectivised bad-taste-in-the-mouth of the people that are forced to buy the product. Some of these are practical, and some are philosophical. I’ll try to expand:
- The rental economy is really just a meaningless, thin, icy layer on top of the worker-powered industries that create value through means of trade, service or innovation. I know, I said it, and if you’re a landlord, you probably hate it. People need somewhere to live in order to survive, let alone collaborate within any economic system, and you think ‘that’s the service’. The industry, by nature, has to be parasitic, because it’s predicated on the idea that it can draw down a massive chunk of a tenant’s regularly resources, while being directly incentivised to deliver as little as possible in return. The issue is not that it creates no value — that’s not true — but it is disproportionately rewarded for the value it creates given who pays the bill.
- To become a landlord, you don’t need skill. You need a block of capital and the ability to read rental legislation. In my own personal experience, the second item appears to be optional for reasons nobody has been able to explain to me. Let’s now call this what it is — it’s massively distributed, fundamentally unskilled labour, rewarded as if it’s a skilled specialism. This makes no sense as a thread within a capitalist story that is still nervously banging the drum of ‘meritocracy’ and ‘pay related to skill’ as a way to motivate people to go to work. Which is it?
- There is a fundamental lack of affordable housing for sale in the UK, which means that we have the worst possible combination of the rental and ownership markets. We have the market predation of a free system that can only extract high rents because inflated house prices block tenants from leaving, while these same rental properties accrue major, parallel passive value in equity whether they’re occupied or not. It is an industry that exists to exist. It feeds off of its own fortune and circumstance, and not on return.
- The governing political party for the last decade has been the Conservatives. 28% of Conservative MPs are private landlords, and 20% of all MPs, across all parties, are landlords. That data is based on the honesty of the reporting MPs, too, which at this point, I think is reasonable to challenge. In short, there is a gargantuan, systemic conflict of interest at play when members of any parliamentary system get to influence policy on anything that creates cash for them personally. This is incredibly obvious and I’m still staggered that it’s allowed.
- It is an industry that builds its exclusive, recurring income on the assumption that people who don’t own property will experience no break in income. In a broad economic collapse, this assumption folds instantly. It’s not like landlords provide a non-essential product that can pivot to a delivery service or by ‘going online’. One-hundred-percent of landlord income is a direct, serious slice of tenant income, from workers who often live hand-to-mouth, or not far from it. If their tenants live hand-to-mouth, so do they. Their tenants’ employment status is their own employment status. As soon as their tenant is immediately out of work, well, shit — so are they. Only if they’re mortgaged, they now have a massive financial liability too — and if the economy is going through a downturn, there’s nobody else to sell to.
Rentier capitalism in the age of the virus
In the context of Coronavirus, a number of these existing tensions are snapping, and quickly. Rent is just one piece of a larger, overarching philosophy — that the wealthy are always insulated by the wealthy, and that the working poor get to finance it. It isn’t just conversations on austerity politics that have now had the doors dramatically blown off them — but that this crisis exposes a host of other crises, waiting in the wings — ones that are tightly threaded through the tapestry of the way that ‘normal’ people work and live. So far, the government’s measures fall dramatically short for the self-employed, and for renters — many of whom are one and the same, and compounds their vulnerability in what may turn out to be the most serious economic unravelling since the second world war.
There’s now no choice but to do more. There is now no choice but to seriously readdress and reconfigure the fragility of a housing market that makes hay while the sun shines, and disappears when it’s dark. We’re in the first days of a long, slow battle, the intensity of which has only been exacerbated by the social inequality that characterises late capitalism.
But the rent’s still due, for some of us. And we’re either in this together, or not at all.
Have a day.
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