A/HRC/34/51 D. Creating inequality and exclusion 34. Increased prices of housing and real estate assets have become key drivers in the creation of greater wealth inequality. Those who own property in prime urban locations have become richer, while lower-income households confronting the escalating costs of housing become poorer. Surveys of ultra-high-net-worth individuals show that more than half have increased the proportion of their investments allocated to residential properties, with the most common reasons being in order to sell at a later date and to provide a safe haven for wealth.36 The “economics of inequality”,37 in fact, may be explained in large part by the inequalities of wealth generated by housing and real estate investments. 38 Buying a home with a mortgage becomes a speculative investment depending on volatile financial markets, which may generate considerable wealth on leveraged equity or, alternatively, deprive households of a lifetime of savings. 35. The dominant impact of wealth and private investment has also created and perpetuated spatial segregation and inequality in cities. In South Africa, for example, the impact of private investment in the urban core of cities has sustained the discriminatory patterns of the apartheid area, with wealthier, predominantly white households occupying areas close to the centre and poorer black South Africans living on the peripheries of cities. That “spatial mismatch”, relegating poor black households to homeownership in peri-urban areas where employment opportunities are scarce, rather than rentals in the urban core, for example, has entrenched their poverty and cemented inequality. 39 Similar patterns of racial displacement from urban centres and segregation in evidence in large cities in the United States have led to more severe impacts of financialization and the mortgage crisis being experienced by African-American households. 40 Financialization also creates gender segregation. In Australia, analysis has shown that average-income single female workers can afford to live in only one suburb of Melbourne and cannot afford to live anywhere in Sydney.41 36. In contemporary Chile, the appropriation of land by large scale investors and speculators, accumulating land and luxury properties, has meant that inner-city redevelopment has displaced many traditional residents, exemplifying “the intertwined roles of the state and assorted holders of economic capital in the production, distribution and representation of urban exclusion and segregation”.42 36 37 38 39 40 41 42 Knight Frank Research, “The Wealth Report 2016: the global perspective on prime property and investment”, p. 13. Available from http://content.knightfrank.com/research/83/documents/en/wealthreport-2016-3579.pdf. See Thomas Piketty, The Economics of Inequality (Cambridge, Massachusetts and London, Harvard University Press, 2015). See Matthew Rognlie, “Deciphering the fall and rise in the net capital share: accumulation or scarcity?” Brookings Papers on Economic Activity (Spring 2015), and Aalbers, The Financialization of Housing, p. 83. See Socio-Economic Rights Institute of South Africa, “Edged out: spatial mismatch and spatial justice in South Africa’s main urban areas”, November 2016. Available from www.serisa.org/images/images/SERI_Edged_out_report_Final_high_res.pdf. See Jacob Rugh and Douglas Massey, “Racial segregation and the American foreclosure crisis”, American Sociological Review, vol. 75, No. 5 (October 2010). See Council to Homeless Persons, “Single working women being locked out of renting in Melbourne”, 2 October 2016. Available from http://chp.org.au/wpcontent/uploads/2016/10/161002_single-women-locked-out-of-rental.pdf. See also Calla Wahlquist, “Apartment rent in Sydney and Melbourne beyond reach of many women”, Guardian, 3 October 2016. Ernesto López-Morales, “Gentrification in the global South”, City, vol. 19, No. 4 (2015), p. 569. 11