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Speculation and slum must be on the agenda

The slum of the world is growing. There are people who make good money from it.


Few things can give a higher return on property than high-rise buildings on central and attractive plots, often with sea views. This is a development all over the world, from Punta del Este to Maputo, Vancouver, Hong Kong, Reykjavik, Tromsø and Oslo.

A consequence of this type of urban development is that those who live behind lose the sea contact – but often people who already live there lose their homes.

Now it's the Rio Olympics. What used to be the village of Vila Autódromes, populated by fishermen and construction workers, will then be history. The residents are displaced.

Such removal of original residents is a common feature of metropolitan development around the world, especially when building "World Class Cities" or hosting Olympiads and highways. From 1998 to 2008, more than 18 millions of people were forced to relocate for such reasons. In several cases, residents have been killed in clashes with police when they have objected to being displaced from homes and homes. Rarely or never do they receive compensation.

Screen Shot at 2016 08-17-14.43.16Millions of empty new homes. What determines whether people can afford a home is their income, not the availability of housing. Paradoxically, the proportion of empty (and often new) homes that people cannot afford to live in is increasing everywhere. Take China, for example. There are now seven million empty new homes in the country, in parallel with a huge housing shortage among the poorer sections of the population.

In total, it is estimated that two million people have to leave their homes each year due to forced evictions because they cannot afford to pay rent, interest and similar expenses. 14 million people lost their homes in the United States in 2008 as a result of the financial crisis and housing speculation. In 2015, Spain had at most 3,6 million empty homes. In Barcelona, ​​there were 130 homeless people.

In parallel with this, more and more people – private individuals and companies – are systematically investing large sums of money nationally and internationally in real estate. One of them is the Russian-born multimillionaire Roman Abramovich, also known as the owner of the Chelsea football club. Now he wants a home in New York, too, and has his eyes on the three conservation-worthy properties 11, 13 and 15 East 75th St. He is trying to get permission to merge them into an approximately 3000 square foot five-storey detached house. The costs are estimated at almost NOK 700 million.

The forecasts now indicate that up to 1,6 billion will live in slums by 2020. That will equal one third of the world's urban population!

Norway is actively participating. We do not know much about the number of Abramovichs, and how much of the living space they own. But it seems quite clear that they are increasing, and that they are occupying ever larger parts of the city's most attractive areas. One indication of this is the sale of luxury properties in London, with prices ranging from NOK 20 to 40 million. In 2009, there were 2147 such sales, while in 2014 it had increased to 6250, which is almost a tripling of five years.

It is neoliberalism that controls the urban development of the world, and the trend of huge price increases on plots and properties is global. Karachi is Pakistan's largest city with almost 23 million inhabitants. While one square meter of land in 1991 cost an average of 1,7 times the hourly wage for a day laborer, the price for a corresponding square meter was increased to 10 times the hourly wage in 2007.

The Norwegian state of Norway, through the Norwegian Oil Fund, also actively and increasingly participates in the real estate gallery. Earlier this year, the fund decided to increase investment in real estate from five to seven per cent, which could amount to about NOK 150 billion. On average, the Oil Fund now buys properties for just over NOK XNUMX billion a week! In the long run, we can triple the value of state-owned, Norwegian-owned luxury properties – especially in Paris, London and New York.

Lucrative slum. People with small financial resources can not choose where they want to live. They are forced into areas where the environmental situation is worst, and often have to live extremely cramped. But for some, slums are very lucrative. Kiberia is the famous 2,5 square kilometer slum area in the middle of Nairobi. It is one of the most densely populated areas in the world. Between 600 and 000 million people live here, depending on jobs, season and similar factors. A typical building is an approximately 1,2 square meter shed of corrugated iron. They are close together, and there are almost no open spaces.

Almost all the sheds are rental housing, and the rent is so high that it only takes 18-20 months for the shed to be paid off. Then they are almost considered money machines for the owners, many of whom are politicians. Not surprisingly, it is the owners who have protested most when proposals for redevelopment in Kiberia have been made.

All cities have or have had slums. Type and scope are mostly regulated through public policy – at the local, national and international levels. There are somewhat different definitions of what is called slum. One can also observe that the UN forums are now talking about informal settlements rather than slums.

In any case, there seems to be no doubt that the world's slum is growing, both relatively and totally. In 1990, UN Habitat reported that 650 million people lived in slums, while forecasts now indicate that up to 1,6 billion will live in slums by 2020 – in four years. That would amount to a third of the world's urban population! Unfortunately, neither this theme nor the sweeping speculation does not seem to get the attention when international politicians in October discuss the urban challenges facing the world up to 2036.

Odd Iglebæk is a journalist and architect. He is also deputy head of Habitat Norway. The views in this article are at his expense.

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