Javier Gil: "The renter generation is sustaining the global economy"

BarcelonaJavier Gil (Madrid, 1985) is a researcher at the Spanish National Research Council (CSIC) and holds a PhD in Sociology. He has spent years researching the financialization of housing, the megaforks and also social movements. Now he publishes Renter Generation (Captain Swing).

He speaks of a new subject, the tenant generation. And he encourages them to mobilize. Is his book a kind of manifesto?

— We can call it a manifesto, or a political program. What we seek is to analyze the contradictions, tensions, and social forces within the real estate sector. My hypothesis is that housing is generating its own antagonist due to the shift towards rentier capitalism, just as happened in industrial capitalism with the organized labor movement. And this antagonist is the renter generation.

Why is this happening?

— There's a conflict, one that's becoming increasingly tense and won't be resolved overnight because the interests are antagonistic. What I'm pointing out is that class formation processes are underway. The renter generation is a subject of exploitation, unable to live well, and this will only worsen. And on top of that, they're sustaining the global economy.

In fact, the book begins with a striking statement: housing is the main repository of global wealth.

— Yes, and it's being sustained by the renter generation. All the money entering the housing market is money fleeing other markets. It's money that hasn't been invested in other countries, industries, and financial markets. When the renter generation stops being exploited and transforms into a political force, that's when it all begins to end.

So, do you believe that the housing problem cannot be solved by legitimizing the current economic order?

— No, it's impossible. Solving the housing problem means promoting a new housing paradigm, and this is contrary to rentier capitalism. Today, the population can no longer access the promised level of well-being. The idea of ​​a middle-class life—working hard, studying, working, buying a home, going on vacation—is crumbling. We're seeing how all of this is falling apart; the society of homeowners is breaking down because of the concentration of property ownership. This is incompatible with the current economic system, which is why the housing crisis isn't a housing crisis; it's an economic and political one.

There are debates that seem to never end, such as the concentration of property ownership, whether construction lowers prices, or the issue of empty homes.

— The Barcelona study is always used, and I think it's becoming outdated because the INE (National Institute of Statistics) has changed its methodology and released updated data. Generally, there's a lack of data. I think this is right; more should be invested in producing more rigorous data. Regarding construction: we see it all over the country; it's not demographic changes that drive prices. It's always said to be a matter of supply and demand; it seems like the law of gravity. And questioning that seems like heresy. I'm not the one saying this; it's Robert Shiller, the 2023 Nobel laureate in Economics and a liberal, who said it.

What exactly does it say?

— Housing prices don't rise due to supply and demand, demographic changes, or even economic factors, but rather have much more to do with sociological and psychological issues. In the book, I discuss how some municipalities with over 50,000 inhabitants have lost 15% or 20% of their population in the last 10 years, yet prices have risen by 40%, 50%, or even 60%. How can this be?

What do you think?

— Because what's driving up prices is speculative demand, not residential demand. From there, we need to see where there's actually a housing shortage, whether more construction is needed in Barcelona or Madrid... For example, there's very little land available in Barcelona. If you have a cooperative that wants to build affordable housing and an investment fund is betting on the same land, and the fund puts up 6 million euros, while the cooperative puts up 5 million, they can no longer compete. In fact, the fund can offer 7 or 8 million euros, but the cooperative can't offer more than 5 million. Why? Because the cooperative, despite having the financing, will pass it on to the housing costs. And they won't be affordable anymore.

But there's also a shortage of floors, isn't there?

— What I'm trying to say is: construction is always the last resort. First, everything else must be tried, because otherwise, you risk inflating housing bubbles. Second, where there is a real housing shortage, then construction must take place. The market and speculators cannot be the ones building, because their goal is to maximize profit. They will never produce housing to lower prices.

And what about empty homes?

— You go to the town with the most empty houses in Spain, where nobody wants to live. You go there and see all the empty houses, and you ask the people who are selling them for, I don't know, around 50,000 euros. And you say to them, "But if nobody's buying it, why don't you lower the price?" And they say, "No, no, it's worth 50,000 euros." The houses are practically worthless, but they don't lower the price because these are people who need that money. All of this is explained by the fact that there's a cycle of speculation.

How can this be solved?

— If you have a certain number of houses and tenants, and you manage it according to social criteria—where rents are indefinite and you can't raise them by more than 10% every three years, for example—the economic and sociological effects will be very different. The problem is that our current model is designed to encourage price increases, speculation, and the financialization of housing.

But in response to this, some will say that investment will collapse and there will be no money for renovations, nor any rental supply, because it will not be profitable for the owners.

— Investment has to fall. We need it to fall, to stop en masse. Investment skyrocketed after 2013 so that a series of political measures could be implemented to bring in investment funds—all the speculative capital that has colonized the Spanish real estate market. These speculators must be expelled, the market must be cleaned up. They have to leave. But they won't. Why? Because they've been given the red carpet treatment. They've been told, "Come on in, you freeloaders." And we need the exact opposite.