I do agree with financialization of housing.

Financialization of housing liquidizes assets and provides us

with the convenient means of accumulating capitals. In business, all players from individuals to
companies need money to run their business. Especially for companies, their business performance
directly affects the country’s or world’s economy, and thus, the quality of our life. Moreover, housing is
one of the most popular assets among high-priced properties.

However, we have one problem to be deeply considered : human right of housing. Different from ships
or forests, housing is commodity and indispensable assets which all people need in order to live in with
dignity and security. Therefore, when we invest in housing, we always must think much of it. The
greatest example is the 2008 financial crisis. There are many factors of this crisis, but one of the main
reasons why this happened is financialization of housing. There was this bubble of housing price and
many financial institutions such as Lehman Brothers issued lots of subprime mortgages. People fancied
that the price of housing would go up infinitely and almost no one, even professionals in financial
institutions could doubt it. From the point of view of behavioral economy, this is the most typical logical
fallacy. If one good thing repeatedly happens, people tend to think the next one would be a good one
too with no logical reasoning. That is, if people see the price of housing increasing until today, they tend
to think the price will go up tomorrow. Oppositely, if one bad thing repeatedly happens, people tend to
think the next one is NOT bad.

I think we cannot eliminate such tendency. If we are to do it, then it demands infinite cognition of our
weakness and improvement of our decision, which completely exhausts us and leads to failure at last.
What is important is not our will but social system to “enforce” us not to commit logical fallacy.

One example is Dodd–Frank Wall Street Reform and Consumer Protection Act. We must monitor
financial institutions and if we detect the potential danger of invading human rights of housing, do
something to protect them. Otherwise, subprime mortgages continue to be bought, and some time, the
crisis will happen and many people suffer from bailout and become homeless.

There are other examples of balancing the advantage and disadvantage of financialization of housing.
According to the Report, the City of Vancouver recently approved a 1% tax, which would apply to both
foreign and domestic investors, on vacant homes.

Given the fact that adequate housing is a component of the right of any individual to adequate standard
of living and the right against any kind of discrimination, it is, indeed, imperative to consider the
negative effects that financialization of housing, as it has been developed in the recent years, has
brought to a large percentage of the population worldwide.

Financialization is a part of and key to structural transformations of advances in capitalism economies.

Inevitably this trend has seriously affected the housing sector. The following are some of these
implications:

- Financialization through overprices and overextended loans

- Mortgage securitization
- Credit scoring of (potential) homeowners

- Land use planning

- Housing rights

- Private serviced residences

- Subsidized housing

The housing centered process of financialization is uneven in nature resulting from the interaction of a
global pool of capital and national systems of housing and housing finance. There is a need to focus on
systemic transformations rather than on the fundamental diversity of national models.

If we think of finance, most people will not consider the incredible amount of positive change in society
that financialization and particularly financial innovation (i.e. new financial products) has brought about.
However, many such examples exist. Consider for instance the invention of insurance policies; insuring
your house and its contents against loss in the case of fire was not possible before the 16th century. Or
think of the invention of inflation-indexed debt (first established in Massachusetts in 1780) which
protects investors from the devaluation of government-issued debt due to inflation. With regards to the
housing market, examples of financial innovation with positive impact are also manifold.

So from inflation-indexed debt to home equity protection, these examples show a different side of
financialization. They demonstrate that financialization is not inherently bad or good. Rather, in the
housing market and elsewhere, financial innovation can have both positive and negative effects. And
while the need for additional regulation to counteract the negative effects of financial innovation (as the
report recommends) is clear, we should not forget that new financial products may effect positive
change in global housing markets, possibly making this human right more affordable and accessible to
people across the globe.

I would agree with the financialization of housing because of its convenience of stimulating economy
and making people wealthier. However, above this advantage, we should recognize housing is the
indispensable commodity for people to live in with dignity and security. Human rights is of paramountcy.
States,of all thing, have subsidized the excessive financialization of housing at the expense of
programmes for those in desperate need of housing. It is completely imbalanced. What we must do is to
balance the accumulation of capitals by financialization of housing, and, the protection of human rights
of housing.