What value does rentism bring, the idea that a few can buy the real estate assets of a city and extract the wealth it produces through rental? None. This can only be understood as a form of looting.
NOTICE | It’s not housing, it’s wealth, by María Álvarez
If an ultra-advanced extraterrestrial civilization observed the last 200 years of planet Earth through an intergalactic telescope, what would it see? At this distance, he could only perceive large-scale changes produced by human activity. One of them would concern changes in the Earth’s atmosphere caused by increased greenhouse gases. Another would be global warming, melting of the poles and deforestation. And the last would be the least mentioned of the major changes in the world: urbanization.
Global urbanization has been the most transformative phenomenon of the last century. The urban population has increased from 13% to almost 60% of the total population in just over 100 years; already more than 80% in rich countries.
Why did this happen? The usual and most simplistic explanation is that industrialization concentrated jobs around factories and gave rise to cities. But for many years, there have been fewer and fewer jobs in the manufacturing sector and urban concentration has continued to grow. Even with teleworking, the trend has not changed.
A more sophisticated explanation is that the evolution of humanity is a process by which we developed our ability to live and think together. Or what amounts to the same thing: increasing our ability to make decisions in a distributed manner.
When people lived in family communities and small towns, their ability to reach agreements beyond the immediate group was limited to a minimum of trade and warfare. Religions were born, in this context, as great cultural codes which confer a certain homogeneity to these dispersed groups. With the spread of agricultural surpluses and the emergence of trade, we discovered a new mechanism of distributed cooperation that gave rise to cities.
Since then, we have become increasingly good at sharing information and learning to trust (or distrust) others. This learning is crucial, because the more people we can include in a deliberative process, the more problems we may encounter. A community of a few people could never have invented a car or a vaccine. Thousands of people cooperating in scientific, business, and policy networks are needed for almost everything we take for granted today.
Cities are, much more than a set of buildings or infrastructures, a group of people equipped with a specific culture to be able to make common decisions. This is why each locality has a different code in which all its citizens operate: from how to use the subway to how to greet people on the street or whether it is appropriate to look people in the eye when you cross them.
In each city it is cooked differently. In some cases it is customary to invite people to eat at your house and in others it makes no sense. Business is also done differently. You work differently and you innovate more or less. Some are more progressive and others more conservative.
A city’s destiny is marked by the success of this set of rules (and the community they create). Therefore, over the past 100 years, the world urban map has changed significantly. Some cities, like London or New York, are experiencing more or less continuous growth and attraction. Others, like Dundee or Detroit, had a moment of splendor and then collapsed.
When I talk about success, I don’t mean that the price of rent increases or that the population increases (although population increase can be an indicator of a city’s apparent success) but that the city continues to produce of innovation, ideas and a hegemonic culture. proposals. : Continue to evolve, change and grow. Stay alive, in short.
When cities are alive, they produce a lot of value: in the form of innovation and new industries, in the form of tourist attraction, attraction of university students, revaluation of local brands, creation of political and economic trends , ethical or aesthetic, etc. . All the great innovations of recent decades have taken place in the breeding grounds of the most dynamic cities: from automobiles to artificial intelligence.
In other words: if in the 20th century industries were a country’s primary asset, in the 21st century cities are.
This is why much of the international capital that would have been invested in the industry 40 or 50 years ago is moving into the real estate market and this is what is producing a worldwide housing crisis. At a time when it has become very difficult to find high-yield investments in the productive sector, international capital is positioning itself wherever it sees value occurring to take part.
But if capital played a role in the years of industry because it allowed investment in things that did not yet exist, rentism, the idea that a few can buy the real estate assets of a city and extract wealth from it through rent. , what value does it bring? None. This can only be understood as a form of looting. Investment funds invested in urban land do not contribute to generating wealth in cities. In most cases, they don’t even build: they simply buy to rent what others have already built.
This is exactly what we are experiencing these days. Communities of people gathered in certain cities produce in a distributed manner an immense part of the value produced by humanity. And unproductive capital that adds nothing to the equation seeks to eliminate this value.
This is why if the battle of the 19th century was for political power and that of the 20th century for a fair distribution of the benefits of the industrial revolution, the battle of the 21st century must be for that of cities.
To arms, citizens!
