Property is always potentially a commodity
On markets and the birth of "housing"
On his channel Primitive Technology, an anonymous Australian man documents himself carrying out building projects and survival experiments in the bush of Northern Queensland. In the first three minutes of a recent video, the viewer watches as this man builds an A-line thatched hut from scratch.
Watching him toss up this shelter hit me differently than it normally would have, I think, because I spent some time this morning poring over the inspection reports for a property that my father-in-law and I were looking at purchasing.
The reports contained pictures of broken seals, moisture inside, funky electrical arrangements, and observations of dry rot and termite damage. The list of recommended repairs ran long. (We’ve since decided not to pursue the property further)
Going from reading housing inspection reports to watching a lone individual build a shelter from nothing but small trees and fronds sparked a thought for me — shelter could be abundant, but we’ve turned it into a commodity we call housing. The regulations around building are a direct result of the market’s pressures to standardize private objects with the expectation that they will become commodities again someday.
A common misconception about markets is that they naturally exist. Human beings create markets by clearing and organizing a space for exchange to take place. Fixing someone’s chainsaw in exchange for raw milk does not make a market, but milk which hasn’t been inspected or treated in certain ways defined by government agencies can’t “go to market.” So, what’s happenings?
A key principle in the creation of markets is an organization of artifacts into a species or class of objects which become identifiable as a certain commodity. In this article, I’m referring specifically to housing — a thatched hut provides shelter, an RV provides shelter, a mansion provides shelter, and an adobe hut also provides shelter. But you can’t have a market for shelter when everyone is making their own shelter according to their needs, abilities, and preferences.
To create a market, you have to gradually generate a uniform object which can be interchangeable with other objects within the market — shelter becomes housing, because housing is a term for a regulated artifact subject to legal definitions, codes, obligations for buyers and sellers, and a whole financial infrastructure for assessing and exchanging these commodities.
Markets necessarily have a homogenizing effect because now an object which may have been originally built to stand on its own or only serve a private use must come into a relationship with a broader pool of objects which it can be compared to. This results in a re-definition of how we understand these private objects.
A house is not simply shelter, but always a potential commodity which could be sold. Its status as ‘always potentially sellable’ because of an existing market for objects to which it can be compared invites the market’s concerns into the every day creation and use of private objects. Eventually, our very conception of these objects is transformed by the market’s structures for representing objects.
The property my father-in-law and I were considering provides a perfect example of this phenomenon — the ad for the property noted that there were “unpermitted improvements” to the property, which indicates that the previous owners had carried out work for which they had not sought permits. In this case, neither the government nor the agent facilitating the transaction could speak to the safety of occupying the property in absence of the permits.
But why should someone need a permit to modify a property they own and occupy? Precisely because that property could pass into the hands of another person someday through the market, and the negligence of the prior improver could pose a hazard to the unwitting purchaser. Thus the existence of the housing market exerts a host of visible and invisible influences on how private objects are handled.
The code of Hammurabi had a different way of dealing with this — if someone built a house for someone else, and that house fell down and killed them, the builder of the house would be put to death. If it killed the house owner’s son, the son of the builder would be put to death. If the collapse killed the owner’s slave, the builder would have to replace his slave. You’d probably think twice about doing a shoddy job, right?
Today we impose building codes, zoning, permits, licenses for contractors, real estate agents, lawyers, and on and on to organize a space in which each of this singularities we call a “house” can be assessed and represented as a commodity which is in theory of such a type that it could be compared to any other in the housing market. Otherwise, the market couldn’t produce any pricing signals.
We see this problem clearly when we encounter properties which are so unique that agents have difficulty pricing them — in industry terms, these properties have no “comps.” There are no other “comparable” properties to use as a possible gauge to determine their market value. In these cases, the singularity of the property makes it such that pricing it involves a high degree of interpretation and negotiation for both parties in the transaction.
Once you see this move from a “need” (shelter) to a “commodity” (housing), you will start to notice it everywhere. In fact, this precisely what I’ll be presenting on at
‘s 2024 conference — how schooling substituted the subjective and dynamic process of “learning” for the objective and standardized commodity of “education.” Markets are born by taking something you do and transforming it into something for you to consume.But what sort of terms are we accepting when we invite these types of controls and dependencies into our households? Uncovering these structures and their effects will requires us to renew a “sociology from below.”
Thanks for reading! I hope that you’ll join us in-person or online at TUCON 2024. Also, don’t forget to subscribe to Samsara Media for more work like this.
Very well said. I have come to hate that word, "housing." And you're right, "schooling" presents a similar problem. I wrote a bit about housing a few months back in a piece called "Intellectual Sin." It had lots of overlap with your main point here. Here's what I wrote:
A friend sent me an article from Matt Yglesias, “The High Cost of Promoting Homeownership,” after a lively conversation a few of us had about affordable housing in our area. I like Matt. As thinkers on the center-left go, he’s as smart and reasonable as they come. But this piece bugged me. His main argument is that, on an individual level, homeownership is reasonable, but on a policy level, promoting it across the board is less important than it might seem. Technically, he says, we’d all be better off with a diversified real estate portfolio than having that same amount of assets tied into one home. This is hard to argue with on purely economic grounds. But that’s where I get annoyed. Because, of course, life does not exist in a purely economic world…
The problem with Matt’s logic is not technical but symbolic. He tends to think about policy from a strictly material perspective. Thus he treats owning a house like owning a commodity. "A house is an example of stuff," he says. I mean, yeah. But the trouble is, humans aren't just material beings. We don't just need "affordable housing." We need homes. So the difference between owning and renting is not just the material difference of what commodities are or are not in your portfolio. The difference has to do with whether or not you have long-term embodied connections to the physical space in which you dwell. And even from a material perspective, this spiritual fact can manifest in terms of crime rates, generational poverty, abortion, and the like. When people symbolically "rent" everything and "own" nothing, it changes their relationship with their own agency, values, virtues, goals, and beliefs. [Btw, I grant here that there could be a version of “renting” that is actually better for the soul than owning, from a Christian perspective, but that’s another story.]
The other problem with treating homes merely as commodities is that you end up with the logic he preaches in this article, that we'd all be better off if we diversified our real estate portfolios rather than just owning one home. Again, on strictly economic terms, perhaps this is true. It'd also be wiser if we were 1/10 citizens of ten different countries instead of full citizens of one country, 1/10 married to ten different spouses, etc. "You can never know which one(s) will fail!" But this is not the way life works, and certainly not the way love works. In this life, we must riskily commit to specific people, places, and things in order to see more generalized fruit eventually.
"If everyone owned diverse real estate portfolios, they would probably be pro-development and want to capture that upside," says Matt. Yes, of course. But that would be awful. Because then we'd have nothing but profit-driven investments in generic real estate "products" across the country with little to no personal responsibility for what becomes of those "communities," rather than neighborhoods with real human investment and responsibility where you live.
What I’m saying is that love is generally the opposite of diversifying your portfolio. Of course, the fruit of such love is quite often a more diversified portfolio, just as faithful marriage to one person can lead to multiple children and grandchildren. But to get there, we must not confuse fruit with roots.
I think it important to distinguish the improvement from the land. Since the founding of the New World, the land has been robbed of its spirit and turned into the commodity. In response to several hundred years of feudal control of land with serfs permitted to live their lives on said land, it was a bold idea that if you could just get to the New World, you too could become a land-holder.
The Land Act of 1785 in the United States created the standardization of division, turning raw land into commodity. The rise of improvement value is a more recent twist on this much older deal. And that is the New World in a nutshell: a real estate deal. The original abundance of North America was the vast stretches of unclaimed land (First Nation people's not being seen as "people" in that paradigm).
In the US the tax law favors up-scaling one's home, providing significant reduction in taxes especially if you re-invest real estate sales profits into another home. The cradle-to-grave perspective is rather grim, as it assumes you'll sell your home to afford end of life care, or if you have those funds you will eventually die anyway and presumably leave the property to your heirs (who'll be heavily taxed on that inheritance).
What is missed in all this analysis is that we have overtly divorced ourselves from the spirit of place, and a great majority of people are not tied down to their location, and have expressed a willingness to move if opportunities arose (documented in my forthcoming chapter in the Silk Cities publication on intangible heritage, Springer).
This is sad on a personal level, but on a community level it is alienating. Communities, by and large, lack commitment to the location that would drive other civic-minded actions such as compassion for the needy neighbors, environmental degradation, and the general gambit of local politics.
Failing to get involved in local politics is the malaise of our time, as the majority of direct impacts on an individual arise from local policy, not state, provincial, or nation-state policy.