Changes in Housing and Property under the Austerity Regime in Greece

Challenges for Movements and the Left

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2. Neoliberal austerity in Greece

In the case of Greece, housing – both in terms of production (i.e. real-estate and construction bubble) and consumption (i.e. private debt) – was not closely related to the causes of the financial breakdown, as was the case in other countries, such as the United States (Gotham, 2009; Immergluck, 2011) or Spain (Lopez & Rodriguez, 2011). Rather, housing problems have emerged as a consequence of the severe austerity measures implemented and the spiral of recession and economic collapse provoked by these measures.

The beginning of the crisis, in Greece, was marked by the introduction of the European Mechanism of Support (ESM), in 2010, and the implementation of structural economic adjustment programs and measures as part of consecutive agreement memorandums monitored by the troika (i.e. European Commission, European Central Bank, International Monetary Fund). As in most places, the promoted measures and reforms primarily aim to protect the financial sector and global investors, while consolidating new labor-capital relations (Hadjimichalis, 2011). Adjustments include massive state-financed rescue and recapitalization programs of the financial sector, paralleled by “inevitable” public expenditure cuts, the curtailment of the welfare state, the dismantlement of labor and social rights, as well as the extensive privatization of public assets. This has resulted in a vast social and economic catastrophe. What started as a public debt crisis has, since 2010, evolved into a wider social, political, and humanitarian crisis: unprecedented unemployment levels, precarious employment and poverty, massive income losses, and the depletion of the social structures and provisions left in an already residual welfare state. In economic terms, austerity measures have led Greece to economic collapse and a vicious circle of recession and escalating indebtedness, rendering the public debt socially and economically unsustainable. At the same time, the last five years of crisis management have provoked radical changes to the political scene: a deep depreciation of the old political system, intense social mobilizations, and politicization of the public debate, but also the rise of far-right fascist and racist perceptions and attitudes. A major milestone in this process has been the rise of a left-wing party (in power) in 2015.

Within this context, Greece, today, is facing a severe and escalating housing crisis, which affects broad sections of the population, thereby multiplying housing precariousness, inadequacy, and exclusion, as households are increasingly overburdened by housing costs and face bad housing conditions, energy poverty, overcrowding, seizures, evictions, and homelessness. Today’s housing problem must be acknowledged primarily as an income and labor problem, rather than a result of the housing market. In 2014, the unemployment rate reached 25.6 percent (more than 50 percent youth unemployment rate), while incomes dropped by 30 to 50 percent in both the private and public sectors opposite 2010. Thus, increased housing deprivation relates to individuals’ inability to cover monthly housing expenses. This is also depicted by Eurostat data, which shows that Greece records the highest rates of housing cost overburden in the European Union.1 This is also due to the increasing costs of basic utilities, such as electricity, and the excessive taxation of income and property – a pillar of the structural adjustment programs that disproportionally burden low and middle incomes (Giannitsis & Zografakis, 2015). As a consequence, households’ private debt to banks, the state, and social security funds has been culminating.2

The housing crisis landscape is also characterized by increasing housing deprivation and homelessness,3 the increasing need for emergency shelter for thousands of refugees and migrants arriving from the Middle East and Africa (according to international organisations, 310,000 people crossed Greek borders by September 2015) and the further marginalization of vulnerable groups. This is coupled by a steep recession in the housing market and construction sector,4 the destabilization of previous economic and social housing arrangements, and the complete lack of tools and means to implement housing policy.

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