Flood-profiteering landlords

In the weeks at the end of 2010 and the beginning of 2011, tens of thousands of homes were flooded across Queensland’s metropolitan and regional centres. In the days following the flood, the corporate media and ABC local radio provided lots of information, coverage and sympathy for home owners, but little was said about those who have to rent the place they live in. According to the Tenants’ Union of Queensland, around 30% of all people in the state rent their home. In some parts of the state, up to half of all households rent privately.

As home ownership becomes harder for many to afford, more and more people now live permanently in rental housing. Tens of thousands of people have been displaced, and while sobbing politicians promise to “do all we can”, renters in Queensland’s flood-affected regions are being thrown to the wolves of “market forces”.

Rent hike

On January 18, The Age reported that Brisbane rental prices are set to surge at least 10% as demand for rental properties close to flood-affected suburbs could soar in coming months and push prices up. The median weekly rent in greater Brisbane in the three months to December was $365 for houses and $350 for units. Reports have already emerged of landlords in suburbs closest to the flood zone now asking more than $400 per week. The situation is further compounded as flood victims compete with university students looking for accommodation before the resumption of university as well as an influx of tradespeople from other areas employed in rebuilding. Vacant rental properties in Brisbane will drop from 5% to just 1%. These percentages do not include the many vacant properties in Brisbane that corporate owners deem unprofitable to let.

Cameron Kusher of RP Data told The Age, “Unfortunately there is not a lot of scope for tenants to negotiate”. He added, “I suspect the rental squeeze will be more prominent in Ipswich because of the number of homes that were inundated”. Kusher sums up the increased burden of higher rents on people who can least afford it: “It’s a simple matter of supply and demand”.

While Kusher and most other analysts probably don’t revel in this suffering, they are trapped in the notion that somehow “market forces” are as natural and unalterable as the changing of the seasons. But the necessity of paying rent for a place to live is created by people and enforced by the state. The prices could potentially be fixed, reduced or even abolished.

$10 bread

Throughout the period of the Brisbane flood and in its immediate aftermath, ABC local radio made much of unverified reports of some shops in Ipswich charging $10 for a loaf of bread immediately after that town had been ravaged by floods. Outraged radio presenters decried this despicable act of “flood profiteering”, but the owners of these small businesses, under the dubious logic of capitalism, could surely reply, “It’s a simple matter of supply and demand”. However, the Office of Fair Trading has vowed to prosecute any such instances of profiteering.

So if a small business heartlessly and opportunistically rips people off $7 over two days, it’s taking advantage of a disaster and committing a crime. If large real estate corporations sting hundreds of thousands of renters an extra $2000 a year because of a housing shortage brought about by the same disaster, it is somehow not the same crime, not flood profiteering but merely a tightening market, putting upward pressure on prices. This is what capitalist governments are all about - ensuring the continued growth of profits for a small class of the super-rich at the expense of the majority of workers. Capitalist governments try not to be too obvious about this, so in this case the profiteering of small businesses is demonised and punished to create the illusion that the government looks after workers or at least balances the interests of workers and capitalists. The reality is that in this case the government is willing to sacrifice small-time capitalists to protect the main racket.

A socialist solution

How the socialist government of Venezuela deals with flood disaster is worth examining. In late November, Venezuela and its capital Caracas were hit by severe flooding that left roughly 130,000 people homeless. The Venezuelan president, Hugo Chavez, immediately passed “enabling laws” which gave him special powers to provide emergency aid and housing to flood victims. Chavez then cleared out the presidential palace and turned it into living quarters for 60 people. Military barracks were opened up to flood victims, and empty tourist hotels were forced to take in people. Two months later, the disaster victims are still being fed and taken care of by the state until they can get back on their feet and return to work.

To overcome the housing crisis, the Venezuelan government is building housing on land that was previously going to be used for a new runway at the international airport. The site will now be used to build 1900 apartments with a public investment of US$116.3 million. The homes are expected to be ready in 18 months, and the complex will house more than half of the 10,000 people displaced by the flooding in the area. The government also plans to build a total of 800 apartments in Vargas state. In Petare, one of Caracas’ largest low-income communities, Chavez announced the nationalisation of a 2.1 hectare plot of privately owned urban land that will be used to build 400 apartments. The largest public housing project spurred by the floods is a plan to build 10,000 houses on a 40.8 hectare section of a large military fort in Caracas called Fuerte Tiuna.

In December Chavez announced the forced acquisition of Sanitarios Maracay, a toilet manufacturer, and Venezuelan Aluminum. Both companies produce supplies for home construction and are deemed too important for the recovery effort to be left in private hands. The government has threatened to expropriate large banks if they do not provide cheap loans to working people so they can build new homes. The government has also given the go-ahead for people to claim small parcels of unused land belonging to large landowners or to the government to build their houses.

But even though Australia is a much wealthier country than Venezuela, here working people always have to bear the brunt of any disaster in order to protect the profits of the tiny super-rich minority. That’s a difference between socialism and capitalism.