Show Hide image

Laurie Penny is occupying Wall Street

A dispatch from the New York frontline.

The big bronze bull is surrounded by metal fences and strategically placed members of NYPD's finest. The famous statue, the symbol of aggressive market optimism, is normally open for tourists to grope and fondle, but today, in part because of the "Occupy Wall Street" protest, it has been penned. Today, the Wall Street Bull looks amusingly like a panicked animal in a cage.

It might have been spooked by the couple of thousand activists, hippies, union members, laid-off workers and schoolkids camped out around the corner in Liberty Plaza. When I arrive at Occupy Wall Street, they've already been there for a fortnight, and have turned the square, which is normally scattered with City workers snatching lunch and chattering on their smartphones, into a little peace village, complete with a well-stocked library, free kitchen, professional childcare centre, sleeping areas, meeting spaces, and crowds of young people dancing and playing music.

The protest, which began on 17 September after a call-out by activist magazine Adbusters and the hacker collective Anonymous, has swelled from its original few hundred members after a weekend of police crackdowns. Images of New York police pepper-spraying young women in the face and arresting peaceful protesters spread around the world, which has been shocked not so much by the response of the police in a city where the term 'police brutality' was coined, but by the fact that here, in America, at the symbolic heart of global capitalism, ordinary people have turned off their televisions and come out to shout in the streets. "I never thought I'd live to see this in New York City," says my friend, a native New Yorker, as we watch a drum circle forming underneath the looming skyscrapers of Manhattan's financial district, speckled with rain.

Right now, as I write from the occupied Plaza, a mass arrest is taking place on Brooklyn Bridge, where 2,500 activists have marched to express their distaste for corporate greed. 'Banks got bailed out - we got sold out!' chanted the marchers, hesitantly at first, and then more confidently, keeping to the sidewalks, before they were led onto the car portion of the bridge by police - who promptly sealed the exits and began to arrest everybody.

The entrance to the Bridge is now completely sealed by a quadruple line of cops, as reports come in that a journalist from the New York Times has been arrested. Marchers on the other side yell angrily at the police to let their friends go. "Come join us!" they shout. "You are the ninety-nine percent!"

They mean that the police, like the protesters, are part of the "99 per cent' of the population whose livelihoods are threatened by the financial crisis, as opposed to the 1% of wealthy Americans still raking in profit. "We are the 99 percent," says the group on its Tumblr site. "We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suffering from environmental pollution. We are working long hours for little pay and no rights, if we are working at all. We are getting nothing while the other 1 percent is getting everything. We are the 99 percent." It's a very polite way of saying 'class war.'

The '99 percent' statistic has become emblematic of the American wing of what is phrasing itself as a global protest movement, taking its inspiration from square occupations in Egypt, Greece, Spain and Great Britain. Another statistic you can see daubed on placards around the Plaza is that the wealthiest 400 Americans have more combined wealth than the poorest 150 million. Later in the day, the United Steelworkers union becomes the latest in a growing list of labour organisations and non-profit groups to throw its support behind Occupy Wall Street, ahead of a united march next Wednesday.

Economic inequality is a consistent undertone, but at times this occupation has the feel of a music festival; drifting through the square are young people who seem to have walked out of a wormhole from Woodstock, including a boy with dreads and tiedye scarves sitting on a skateboard next to a sign asking for 'donations for adopting puppies.'

I ask him what the puppies are for. 'Emotional support,' he tells me. Elsewhere, a young woman with long hair is handing out posies. "You're very beautiful," she says, smiling, "have a bottle of flowers." All of these people appear to be disturbingly sober: nobody wants to give the NYPD an excuse to crack down.

Not that they need an excuse. There can be no swifter political lesson than the first blast of pepper spray to the face received by a middle-class protester, and right now a lot of American activists are learning fast. "No Bulls, No Bears, just Pigs," reads one sign. As the light fades and the rain starts to come down hard, hundreds of protesters, reporters and members of the press are still trapped on the bridge. In the pouring drizzle, they strap their backpacks onto their fronts so the police can't take them, according to Kristen Gwynne, a New York writer. Gwynne tells Alternet that protesters are singing to keep morale up: 'this little light of mine.' Hundreds more are cuffed and on vans headed to jail. "I had a feeling as soon as we walked onto the bridge that this wasn't going to end well," says Michael, a member of the march. "The police allowed people to go on the car ramp on the bridge, and when they realised what was happening, people started jumping onto the pedestrian side, but then it was too late." Young teenagers are among the arrestees, in scenes extremely reminiscent of the Westminster Bridge kettle in London in December 2010. "You can't arrest an idea!" the protesters yell.

But what is the idea? The most consistent criticism laid against the occupiers is their lack of a central organising system or core message. Who are these people, and what do they want? The fact that the mainstream media is even asking this question can be considered a victory for the Occupy Wall Street.

Part of the point of this occupation, like the occupations in Greece, Spain and London, has been to create a different kind of political space, a temporary reality outside the lassitudes of mainstream politics where human beings are equal and respected. People have come from all over the country and all over the world to be here, and not all of them, contrary to most of the reports, are white and college-educated. I meet black high-schoolers from Brooklyn, young men from California, young women from St Louis, Maine and Wisconsin, older laid-off workers from Texas and Virginia, and activists from Spain who have come to see if America can really host the kind of revolutionary space that has been opening up across Europe and the Middle East. It seems that, in its own way, it can: copycat protests are opening up across the country, from Chicago to Denver to Los Angeles and Boston.

As night falls in New York, in a bright, busy space under some colourful tarpaulins, the media team is working flat out to deal with international press enquiries, as reports come in that 700 protesters have been arrested by the New York Police Department (NYPD). There is a tense, frenzied atmosphere, with laptops flung down in between knots of cables as volunteers scarf down donated pizza and field information coming in over the wires. Outside the media tent, thousands of people are taking part in a mass meeting, huddled inside plastic ponchos and under umbrellas. NYPD have forbidden amplification, so anything said at the front is immediately chanted back by three hundred voices so that the rest can hear, giving the meeting the call-and-response a feel of a sermon. Every evening, these large General Assemblies gather to debate the demands and direction of the group, and a loose statement is eventually agreed by consensus and published in the group's newspaper, the "Occupied Wall Street Journal."

So far, it's pick-your-own cause, with grievances ranging from bank bail-outs to animal testing, and yet what most of the mainstream media seems to have missed is the fact that the occupation itself is its own demand. It's a symbolic and practical reappropriation of space at the heart of the world's most financially powerful square mile, an alternative community opening up like a magic window on a fairer future.

Activists wandering back from the bridge are greeted by strangers with open arms, as members of the 'comfort' team dash around taking care of everyone. There is free coffee, free food, a young lady with a lip-ring offering free hugs, and painted signs saying "Freedom". Nobody expected the occupation at Liberty Plaza to last this long or to become this important, but the mass arrests today have ignited public anger and drawn the attention of the press across the world. Whatever happens next, Occupy Wall Street is sending a message to the American people: the 99 percent are still here, in the shadow of the glittering palaces of global finance, and they are beginning to dream dangerously, and they will not go away quietly.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

Show Hide image

Has Brexit burst the British housing bubble?

The fall in value of the pound is having a negative impact on property prices.

The high cost of housing in the UK has almost nothing to do with supply and demand. What matters is political control. Rents are high because landlords have gained the upper hand politically. The consequences are vividly illustrated in Ken Loach’s new film focusing on inequality in Britain, I’ Daniel Blake.  As a student in the 1980s I paid £9 a week to rent a room in a shared house in Newcastle upon Tyne. Private rent was low because for decades before then rents had been regulated. It was the lifting of that regulation that meant rents could rise so that now students have to borrow vast sums of money just to have a place to live. Today’s students pay many multiples more in rent than I ever did, and millions of families with children are also struggling because they have to rent privately.

Because rents have been allowed to rise as high as landlords can get away with, the landlords have been encouraged to buy up more and more properties that were once social housing or lived in by a family, who had bought the property with a mortgage. The number of people renting privately doubled between the last two censuses of 2001 and 2011. That has never happened before. It was the end result of years of deregulation and the withdrawal of our government from representing our interests in housing. Well-regulated private renting is a benefit, but without rent regulation it becomes a social evil.

Housing prices are not determined by supply and demand because you do not have a choice about needing to be housed. Allow an unregulated market to develop when social housing is also being cut and there is no choice not to buy what is on offer, other than sleeping on the streets. Prices will go sky-high. The purchase prices for mortgage borrowers also rise to astronomical levels as first-time buyers are competing with landlords to buy properties, and so have to be able to secure a mortgage equal to the amount a landlords can wring out of people desperate for a home.

In the first blog in this series on affordable housing published by Taxpayers Against Poverty, Stephen Hill, director of C2O Futureplanners, explained: “There are over one million less affordable homes than there were in 1980. The population has grown by nearly nine million people. Incomes at the median level are flat, and secure employment is increasingly scarce.” He is correct, but the situation is even worse than that — it is not lack of housing that is the problem. Each annual census in the UK records the amount of housing that exists at each point in time. It does this by recording the number of rooms in homes over a certain size. The number of rooms per person has risen at every census since 1981.

The 2011 census was the first to count bedrooms and found that in England and Wales there were 66 million for a population of 55 million (21 million of whom were married or in a civil partnership). So even if we make the ludicrous assumption that only married people share a bed and no children use bunk-beds, there were at least 22 million bedrooms empty on census night 2011. We have not been building a huge number of new houses or flats in recent years, but we have been adding extensions on to our existing homes and so we now have more housing than we have ever had before, per person and per family. We just share it out more unfairly than we have ever done before.

If housing prices were about supply and demand then our surplus of bedrooms would result in falling prices, but this is not a free market. You are not free to buy a flat that has been left empty in London to appreciate in value by its owner. They do not want to sell, or sometimes even rent it out, and you almost certainly would not have the money even if they did.

It is in the housing market that the majority of investments are made in the UK, housing is where most wealth is held. As we become more and more economically unequal it is through housing that we most clearly see that most of us are losers while just a few (who own multiple properties) are winners. Recent UK governments have been allowing wealth and income inequalities to rise and rise.

As Fred Harrison explained in the second blog in this series, government has not only withdrawn from regulating housing rents and profits to avoid this winner-takes-all-economics — it is now even prepared to provide £2bn to buy properties that home builders can’t sell so that they don’t need to lower prices even if landlords and first-time buyers will not buy their properties. The government sees renting-seeking as a social good, and believes that the market in housing should be regulated less and less with each year that passes, other than intervening to keep prices high and rising. Meanwhile, street homelessness rises, evictions rise, the debt of mortgage holders rises, housing prices rise and a small minority of the population become richer. So how will it end?

You might have thought that prices would stop rising when landlords stopped buying properties because the return on their investments in terms of rent would not making it worth their while paying, say, one million pounds for a three-bed house in a part of London near a tube station. Suppose that the most a family could pay was £20,000 a year in rent. The landlord’s “return” on their investment would only be two per cent a year, ignoring wear-and tear and anything else that they might be able to off-set against paying tax. If the forces that were actually at play were “supply and demand” then surely prices have to stop rising when people can no longer afford the rents?

However, landlords have another return: the escalating value of the property itself. If the property is rising by five per cent a year in value then they are making a seven per cent return when they rent it out, even if annual rents are just two per cent of its value. The rise of five per cent a year is due to speculation which is itself partly fed by a belief that the government of the day will do all it can to protect their investments, but it will only do that up to a certain point.

Because it needs to raise taxes a little given the state of the national finances, the UK government is now withdrawing its support of reckless profit taking by smaller landlords. In October 2016 a group of buy-to-let landlords lost their appeal in the courts to try to continue to be able to claim their mortgage interest payments as a business expense. From 2017 only the largest of landlords who set up companies to rent out their properties will be able to continue to do that.

The government knows that the housing market is in trouble. That is why Philip Hammond, the current Chancellor, announced that their “Help to Buy” scheme (which was aimed at the very best-off of potential first time buyers) will end in December 2016. The government knows that with the risk of falling house prices in future it cannot afford the guarantees that “Help to Buy” created. “Help to Buy” schemes were the previous Chancellor, George Osborne’s biggest spending commitment. They were designed to help inflate the housing market and keep prices rising, but eventually every speculative bubble has to burst.

On 21 September the first reports of a stalling market were released under headlines that included: “Q2 UK house sales at an all-time quarterly low says Land Registry”. UK Land Registry figures now show housing prices to have fallen in London by 7% so far in 2016, with the number of sales roughly halving. Investors have stopped buying; if a recent investor wants to sell they have to do so at a loss. Nationally prices fell by 4.5%.

So what happened to the magic-money-tree? In short the pound fell in value and it has been continuing to fall ever since the UK voted to leave the EU. There was always going to be “the event” that triggered the end of speculation and it is looking more and more likely as if Brexit was that event. Once the pound begins to fall in value then any overseas investor knows that if they buy property in the UK, even if its value in pounds does not fall, it will be worth less to them in future.

Suddenly UK housing is not a safe asset. Suddenly prospective landlords actually have to try to rely on their tenants’ rent to pay back their borrowings. Suddenly housing prices change despite no great alteration in supply or demand. Suddenly the whole edifice looks unsafe, not just for the majority of young and almost all poor people in Britain, but for the large majority of the population.

It was never “supply and demand” that determined our housing costs and profits. Relying on that belief did not result in greatly improved cheaper housing for most people, but it was easy to claim that somehow tomorrow would be better if we just left it to the market — until we left it to the ever more unregulated market for too long. Housing costs, prices and supply are determined by governments, including those that shirk their responsibilities and have too much concern for the economic fortunes of the affluent few.


This is part of a series of blogs on affordable housing published by Taxpayers Against Poverty. You can read others in the series on their website or sign up to attend their seminar in Parliament on the 16th November here: