Editorial : When Market Forces Fail

Reprinted from The Common Good, No 66, Spring 2013

I was a stranger and you gave me shelter. Matt 25/36

Affordable shelter is a right being undermined every day in many cities and towns across NZ.

Real Estate Institute figures show Canterbury has the fastest-selling homes and the fastest-rising prices of any New Zealand region. However, costs are bearing little relation to the needs of many people who are being milked of everything they have in order to try and get accommodation. Christchurch house prices are 10.6 percent higher than a year ago, while inflation accounts for only one quarter of that. ‘Trade Me said rental demand was 16 percent higher from April to June than the same three months last year, and are up 22 percent over 12 months’ (The Press, 9 July 2013). Surely this is stealing by stealth?

The response of the political and civil authorities is always the same – let the ‘market’ determine the levels of rent and housing affordability. The same mantra is applied to food and energy. This ‘free market’ mantra underpins corporate capitalism the world over. Yet it is obvious the ‘market’ cannot provide what is needed at an affordable rate. As can be seen by the housing crisis outlined above, it is anything but free. It is simply unregulated.

Yet it is obvious the ‘market’ cannot provide what is needed at an affordable rate. As can be seen by the housing crisis outlined above, it is anything but free. It is simply unregulated.

This type of thinking, in religious terms, is heresy. It is a premise condemned by Church teaching – and nailed repeatedly by Pope Francis in recent talks. He is clearly teaching that so-called ‘market forces’ should not be the sole criteria for social policy, especially in providing for basic human needs like shelter and food. And in his final social encyclical (1987), Pope John Paul II called such thinking ‘a structure of sin’. Powerful words indeed!

What appears to have happened in Christchurch in particular is that housing numbers have been substantially reduced by the quakes. That’s pretty obvious. But with the ‘market’ and not human beings determining the social spin offs from this devastation, costs have soared way beyond peoples’ ability to pay – and way beyond what is just or fair. The Government refuses to take a stand to protect the vulnerable from price gouging. . This means they are left to face the future unprotected in any way. No doubt they will be blamed for their own plight by those with plenty!

A recent Tenants Protection Association (TPA) survey found Christchurch tenants were paying more than 40 percent of their income on housing alone. Food and other basic needs were left to scrap over the remaining percentage. As TPA director Helen Gatonyl said, ‘Tenants cannot afford to pay for power bills, food, petrol or going to the doctor.’

Without constraints, this is a recipe for structuring further levels of poverty right into the social fabric of our society. When rentals have jumped almost overnight from around $300 per week to $800 – $1000 per week, simply because of the shortage of housing, then we have a growing crisis. Plenty of rentals have gone down this road in recent months.

Jesus identifies with the homeless one who knocks on the door. It is the Risen Christ who knocks. In the same way, Christ identifies with one who ‘has nowhere to lay his/her head’ because houses are too expensive, only available to the well off, while rentals continue to climb out of reach of the poor.

In shutting the poor out of the housing market, we are shutting Christ out. As Pope Francis said recently in Brazil, ‘When someone abandons the poor, that person becomes poor himself. Don’t let the attitude of the disposable society enter your heart. No-one is disposable.’

The Catholic Worker practice of personalism challenges each person to try and take some responsibility for their homeless neighbour. Our needy neighbour is Christ. That is why Dorothy Day always promoted the idea of a ‘Christ room’ for the needy in every home and every parish.

On the wider front, the Government needs to bring in some controls to limit the price gouging that is going on under their noses. Unaided, ‘market forces’ will never provide the sort of economic and social justice that people deserve in a democracy and in a nation with a history of giving the underdog a fair go.

Jim Consedine

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