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50. Evidently, in the context of the mismatch between need and availability, and of lack of
affordability, many are not able to compete for adequate housing because of their economic
status. Moreover, the integration of the housing finance markets with general circuits of finance
means that individual owners are competing with multinational corporations for capital and
credit. Whether access to adequate housing is possible cannot be based on such income-based
competition which, in human rights terms, becomes unacceptable discrimination.
E. Financing homeownership
51. Governments encouraged the accession of low-income households to homeownership with
the double idea of enhancing the financial assets of these households and reducing their reliance
on government aid. While this option could work to provide better security of tenure for many
households, it also encompassed an important side effect: credits were attributed by the private
sector to households that - in normal circumstances - would not be eligible for loans. That means
that not only the risk for private companies increased but also low-income households were
made even more vulnerable to economic and financial changes.
52. As long as housing prices continued to rise, the expectation that the increase in price would
be even greater than the discrepancy between housing costs and incomes left everyone happy.
One of the impacts of globalization on housing relates to the house price bubble which prompted
The Economist to launch its global house price indices in 2002, covering 20 countries. Some
observers calculate that the total value of residential property in developed economies increased
by an estimated $20 trillion (to over $60 trillion) between 2000 and 2003. Calculations by The
Economist suggested that house prices hit record levels in relation to incomes in Australia,
France, Ireland, the Netherlands, New Zealand, Spain, the United Kingdom and the
United States.58
53. As expected, rises in prices could not indefinitely continue. The “biggest bubble in history”
was foreseen, but little or nothing was done by Governments to prevent the crisis from
occurring.59 As soon as prices stopped increasing, the problems began to mount, resulting in the
foreclosure and financial crisis that we are witnessing.60
54. While States favoured the acquisition of homes through mortgages, other forms of access
to homeownership were developed at grass-roots level. For instance, lending to low-income
households for shelter improvements, to allow them to buy or build their new homes, can be
provided through community development banks, credit unions, microfinance schemes and other
58
“The global housing boom”, The Economist, 16 June 2005.
59
Ibid.
60
See footnote 4 above.
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