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Our Homes of the Future

Capitalists look at houses and only see dollar signs. But we can win a world where housing isn’t only guaranteed for all, but homes are a place to grow and thrive.

A residential building under construction. (Spencer Platt / Getty Images)

Our homes are central to our existence and our sense of self. They’re where we binge on Fleabag and rant about politics while unloading the dishwasher, where we teach our children their multiplication tables and slowly kill our houseplants. They’re often a refuge from work. For homeowners, they’re a relatively stable store of wealth.

And they’re also a window into capitalism.

The Financial Times recently announced six trends — identified by realtors, developers, investors, and market experts — shaping the future of residential property markets. In highlighting the power of the profit motive to decide how we live, their expert predictions are mostly depressing. But the prognostications are remarkably clarifying, too. Capital’s vision of the future of homeownership provides a useful foil to formulate our own conception of how we want to live in the coming decades.

Trend 1: Eco-Home as Status Symbol

Residential housing is a huge source of carbon emissions making it imperative that homeowners invest in “greening” their homes. Unfortunately, the cost is prohibitively high. In the UK, retro-fitting a home to “net zero” standards (solar panels, triple-glazed windows, re-roofing) can cost upwards of £100,000. As awareness of climate change grows, however, experts say homeowners will be willing to shoulder this burden. Indeed, “a more sustainable ethical home will become a status symbol.”

The FT is right to emphasize wealthy countries’ high share of household emissions, but relying on the status concerns of well-off homeowners to drive down carbon production isn’t the answer. Fifty-seven percent of Americans consider climate change a “major threat to the well-being of the United States;” yet 65 percent of households lack the minimum rainy day fund (six weeks of income) that experts say is necessary to ride out unexpected expenses or loss of income.

Retrofitting existing housing stock to be more energy efficient is essential to cutting the carbon we spew into the air. But spending thousands, possibly hundreds of thousands, of dollars installing solar panels, new air filtration systems, new windows, green roofing, and so forth is simply out of reach for the vast majority of US homeowners.

It isn’t out of reach for wealthy countries as a whole, however. The US government has a long history of funding complex and expensive infrastructure projects to meet public needs. Rather than pitching carbon reduction strategies as an individual or household prerogative we should take up retrofitting homes as a national infrastructure project — allowing us to draw on our collective wealth and know-how.

In doing so, individual households would be able to both shrink their carbon footprint and participate in the process of building a greener future. A national-scale retrofitting project would also spur economic growth by creating green jobs and the materials and knowledge production needed for such a massive undertaking.

Trend 2: Corporate-Run Neighborhoods

Investors looking for steady returns have bet heavily on residential property markets. Experts predict that over the next decade this trend will continue. Soon “we will not simply be living in corporate-managed homes” — “entire neighborhoods will be managed by private companies.” Instead of chasing errant landlords to fix the leaky roof, our homes will be efficiently managed by investment companies like Blackstone, the world’s largest residential landlord.

The US homeownership rate is 64.1 percent, roughly where it was in 1997 after peaking at nearly 70 percent in 2005. The decline in homeownership has been matched by a steady rise in rent costs. The “median asking rent for vacant for-rent units” between 1995 and 2019 jumped from about $400 a month to just over $1,000 a month. It’s no wonder then that large investors are creating rental empires, underwriting “build-to-rent” schemes and in some cases (such as Sidewalk’s waterfront project in Toronto) taking over whole sections of cities.

The FT’s housing pros suggest we shouldn’t be too concerned about these developments, because corporate landlords who care about their reputation might be better landlords than the penny-pincher who rents out a single property. But even if Blackstone was more likely to come fix the roof — and that’s a big if — trading one landlord for another isn’t much to aspire to.

In a system where wealth and power are inextricable, and wealth for ordinary people is primarily stored in housing stock, replacing landlords with individual homeowners, public housing, and cooperatively owned co-living spaces is essential to democratizing the economy. In the immediate term, we should enact rent control, robust health and safety standards for rental properties, and green investment mandates for landlords.

Trend 3: Lego Homes

Experts predict that modular homes that are made in a factory and then snapped together on-site could be the future of residential housing, particularly in booming property markets that suffer from a shortage of skilled construction workers such as California. Developers say these homes are more efficient and environmentally friendly and offer opportunities to build “smart” technology into the home’s core design.

The idea of modular homes that can be customized down to the light fixtures is not exactly new, but nonetheless, there are some plausible scenarios where a modern version of this type of home might be useful. We should be wary, however, of technological fixes for complex problems.

The apparent skills gap in the construction industry (to the extent that it exists at all) is the product of decades of deskilling and downward pressure on wages — and both are the result of de-unionization in the skilled trades. Capital-intensive, “flat-pack” homes produced in factories might be a godsend for developers looking to cut labor costs, but they only serve to exacerbate this problem. These types of factory-built homes also short-circuit an opportunity to link up organized labor with climate justice movements by creating a massive green building trades sector.

And finally, in the United States at least, we aren’t suffering from a shortage of single-family homes. Instead of modern-day Levittowns of single-family Lego homes wired for 24/7 surveillance by the tech titans, we need affordable, eco-friendly, multiunit dwellings near public transit, schools, shopping, and entertainment. This calls for a much bigger conversation about how to redesign cities and suburbs; it’s not a problem that can be solved on an assembly line.

Trend 4: Investors Fear Rent Control

The new normal of low-interest rates means housing prices will level off unless inflation spikes or rent prices continue to rise. Investors are hoping for the latter but worry that elected officials in cities around the world are warming to rent control. Amidst growing calls for affordable housing investors fear that windfall gains from hot property markets could disappear.

Few things demonstrate the perverse drives of capitalism better than the intense speculation in property markets and the rabid opposition to rent control and affordable housing by elites and property developers. The interests of capitalists who make money off of surging housing costs are antithetical to the interests of ordinary people trying to make a home for themselves and their families.

However, the machinations of housing markets also illustrate how the incentives of capitalism divide ordinary people. Surging home prices (usually) benefit homeowners of all stripes, boosting their wealth, particularly in societies with low cash savings. But because rising rents are a key factor in rising home values, renters pay the price in unsustainable housing costs. And as evidenced by the stark wealth gap between white and black Americans — fueled in large part by historical redlining — there are serious, long-term implications for locking people out of paths to wealth creation.

Thanks to a housing market that prioritizes the interests of banks, asset managers, and real estate developers, more than eighteen million US families spend half their monthly income on housing. But experts’ fears about rent control show that demands that unite, rather than divide, renters and homeowners have elites running scared.

Trend 5: “Airbnb on Steroids”

Realtors and venture capitalists see a future in which “proptech” will foster novel relationships between people and their homes: “Renters will move away from long-term leases towards a hybrid of homes and hospitality, where they move quickly from one furnished and professionally managed rental home to another, guided by technology.” As is already happening in New York City and Wiesbaden, Germany, some of these properties will be “tokenized” using Blockchain technology; investors purchase tokens representing a share of the asset that appreciates over time.

Technology, for the most part, is neither inherently good nor bad, including “proptech” and blockchain. Novel relationships between people and their homes could potentially be a positive thing, too. For example, younger, mobile populations looking not just for an affordable place to hang their hat, but also a community and the freedom that comes from being able to cram everything you own into your car, could greatly benefit from digital platforms that foster co-living and short-term housing arrangements.

But technology doesn’t exist outside the social relationships and hierarchies already in place in society. In housing markets defined by gentrification, exclusionary zoning, predatory lending, homelessness, speculation, and unaffordable entry costs, “proptech” will tend to reinforce inequality by catering to the needs of those who have the most power to shape the market.

Technology can’t change these dynamics. A social movement demanding affordable, environmentally friendly housing for all, can.

Trend 6: Intergenerational Co-Living

Instead of elderly residents moving out of their homes into retirement housing, often set in remote spaces outside of cities, a new model of retirement living is coalescing. In this model, the young and old will live together in a variety of co-living arrangements, adapted for the care needs of elderly residents and the budgets of cash-strapped millennials.

A new model of retirement living is certainly necessary. According to the American Psychological Association, twelve million Americans over the age of sixty-five live alone. Only one in three of those say they are financially comfortable; 12 percent say they are unable to meet their basic expenses. Yet fears of lost independence and the astronomical costs of both home care and assisted-living communities make it difficult to ameliorate this situation.

Young people are in a bind of their own. Student Debt Crisis reports that “nearly nine out ten student loan borrowers are struggling to make payments.” At the same time, millennials earn comparatively less than previous generations and are more likely to be paying an unsustainable portion of their income on housing than older Americans.

There are no doubt concrete social and material benefits that could emerge from bringing together isolated elderly Americans and immiserated millennials. The FT housing experts are right to suggest linking up these populations in co-living arrangements. But putting the two together under the same roof doesn’t solve the underlying inequities caused by the voracious appetites of capitalists. Effective cooperative living requires that people have the resources they need. And these resources must come from structural and institutional gains in the form of student debt relief, free higher education, Medicare for All, and a robust social security system.