In July 2001, Emily and her two children moved into a terraced house in the London borough of Islington. She purchased the house for £290,000, but her interest-only mortgage brought her monthly costs to just £320.

The place was “a bit of a dive,” Emily says. The paint was peeling, there was no central heating, and the neighbourhood was rough around the edges.



But over the next decade-and-a-half the borough transformed – and with it the value of the house. “Islington is unrecognisable compared to when I first moved in ... New shops, new restaurants. It’s green, it’s nice, it’s easy.”



In January 2016, Emily thought it was “time to cash in”. She put the house on the market. It sold – with multiple bidders – within a day. The selling price was £1,310,000.

In the housing market, the interests of owners and renters are broadly opposed: owners’ wealth comes directly at the cost of the renter. Photograph: Bloomberg via Getty Images

George arrived to Islington in 2005, renting a bedroom in a shared house. He had a steady job in advertising and was excited about his new home in an up-and-coming neighbourhood. He signed a one-year contract for £500 each month.

Within two years though, George was priced out of the borough. “More than anything, the increases in rent were phenomenal ... I had to move to the south of London just to stay in London at all.”

But the relief did not last long. George’s new six-month contract meant that his landlord could raise the rent every six months. There was harassment from the landlord, harassment from the letting agent. There were threats of eviction, even as the house went unmaintained.

Finally, in December 2015, George decided to leave the city all together. He quit his job. He started looking for a new one. He now lives in Edinburgh.

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Portraits of urban inequality are often painted in extremes. On one side, slums suffer from slipshod construction and poor city services. On the other, skyscrapers offer penthouse views to wealthy executives.

But these inequalities do not just pertain to the margins. As housing markets tighten around the world, a gap is growing between those who own property in the city and those who rent it. Homeowners enjoy security – in their sense of place and, as house prices rise, in the value of their property. Renters face precarity – a struggle to earn enough to pay the rent while affording daily expenses.

I have never been homeless. But I feel like I am a hop, skip, and a jump away from that Tenant, Birmingham

“I think people can forget how much of an impact it can have on your life if you have to move around,” one tenant in Birmingham told me. “I have never been homeless. But I feel like I am a hop, skip, and a jump away from that.”

One of the most common defences of rising inequality is merit. CEOs deserve their multi-million-pound compensation packages, we are told, because they deliver that value to their shareholders. Construction workers deserve minimum wage because they contribute only £7.50 each hour to the projects they labour on.

The growing disparities between tenants and owners strike at the heart of this myth. In the housing market, the rich get richer, while the poor get poorer – all on the basis of luck, circumstance, and inheritance.

Without the bargaining power to force landlords to make repairs, many renters live in dark and damp properties. Photograph: Graeme Robertson/The Guardian

Many governments pay lip service to the “humanitarian crisis” of housing: homelessness, or rough sleeping, and the many disadvantages that flow from it.

But few address housing as a crisis of inequality. Around the world, homeowners are fighting hard to hold onto their housing privileges, campaigning to protect the countryside, slow the pace of property development, and keep their property taxes to a minimum. They remain one demographic that politicians refuse to cross.

As an MP in Islington, Jeremy Corbyn watched as Emily and George drifted apart. In his conference speech last week, he indicted “the yawning inequality in one of the wealthiest ... cities in the world.”

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Housing serves two distinct purposes – wealth and welfare. As real estate, housing is a core asset for home-owning families and a key component of national economies. As shelter, housing is a core component of an adequate standard of living. Over the last three decades, housing markets have seen growing inequalities in both.



In terms of wealth, homeowners have gained enormously from their position on the housing ladder, while renters have been kicked off it. Since 1971, the value of British real estate has risen from roughly $60bn to over $6tn – a 100-fold increase, adjusted for inflation. Today, in many parts of the country, owners earn more from their homes than they do from their jobs.

Renters have been excluded from these gains. Instead, they face the “housing headwind” – their earnings may be growing, but their housing costs are growing faster. For households headed by someone aged 25-44, income grew by just 2% between 2002 and 2015, while housing costs grew by 25%. For these renters, living standards are not stagnating – they are declining.

Today, the average black household would need 228 years to accumulate the wealth of the average white family. Tracy Jeanne Rosenthal, LA Tenants Union

In the housing market, it’s expensive to be poor. In 2015, mortgagors in England paid just 20% of their average earnings on housing costs, while private renters paid 43%. In London, that number was 72%. The statistics are equally striking in the United States, where renters are more than twice as likely to be burdened by housing costs than their home-owning neighbours. 11 million American households spend over 50% of their income on rent.

“We’re seeing drastic rent increases in historically low-income neighbourhoods,” says Tracy Jeanne Rosenthal, member of the Los Angeles Tenants Union. “Since 1980, rents in LA have gone up 55%, while incomes have increased just 13%. Just last year, our homeless population grew 23% – up to 58,000 people.”

The result is a growing wealth gap within cities, across countries, and – especially in the case of America – between ethnicities.

“The divide between owners and renters in this country goes back to the history of redlining and planned disinvestment from low-income communities of colour,” says Rosenthal. “The federal government helped bar people of colour from securing home loans, while subsidising loans for white people. Today, the average black household would need 228 years to accumulate the wealth of the average white family. A Latino household would need 84.”

Renters protesting high living costs in Los Angeles. Photograph: Eugene Garcia/EPA

And so the inequality trickles down through the generations. One family remortgages their current home to finance their child’s next one. Another family keeps struggles to avoid eviction. As the rent burden grows, the cost of upward mobility – a college education, for example, or a car – grows, too.

Housing tenure also implies more basic inequalities of everyday life. Without the financial resources to repair their homes and without the bargaining power to force their landlords to make repairs on their behalf, many renters live in dark and damp properties. According to the 2015-16 English Housing Survey, more than one-third of private rental properties fall below the Decent Homes Standard. The standard was devised to regulate social housing, and isn’t legally enforceable in the private sector, but it is a reliable benchmark for assessing whether or not a home can be considered fit for habitation.

In many parts of the United States, too, rental properties are not fit for human habitation. “There is currently no standard practice for inspecting rental units,” says Tara Raghuveer, Community Policy Fellow at the Center for Neighborhoods, University of Missouri-Kansas City. “The only way that people have reached the attention of the Kansas City council is by calling the health department to report when there are leaks or when the landlord turns off the heat in winter.”

This August, the council finally considered an ordinance on interior inspection. They tabled it indefinitely. “Private landlords in Kansas have been unaccountable to anyone for so long that their business model relies on minimal investment in property upkeep.”

If tenants are at risk inside their homes, they are at even greater risk of being thrown out of them. In Britain, evictions in the private rental sector are reaching record highs. In the United States, an estimated 2.7 million renters were evicted in 2015 alone. Such figures underestimate the scale of the eviction epidemic, ignoring those informal cases in which tenants are forced out of their homes without legal process.

Kansas City alone sees 42 evictions each day. “It’s a bleak but not unique story about evictions in an American city,” says Raghuveer. “The data that we have show that these evictions have been steady for years.”

Another common defence of inequality is the trickle-down model. The rich may be getting richer, but their wealth — one way or another — will eventually reach the masses. It’s a rosy view of a rising tide lifting all boats, absolving the rich of responsibility for the plight of the poor.

There are too many people living in flats that are not suitable to live in. We haven’t got a voice at all John, Bristol tenant

Again, the housing case presents a challenge. In the housing market, the interests of owners and renters are broadly opposed: owners’ wealth comes directly at the cost of decreasing disposable income for the renter.

Consider gentrification. Homeowners gain in wealth as the value of their property rises, and they also gain in welfare: services improve and amenities diversify as luxuries like upscale supermarkets set up shop. Lacking security of tenure, however, gentrification displaces tenants through rising rental costs. Conversely, when house prices begin to fall, owners face fears of negative equity, while renters rejoice. Renters and owners are locked in a zero-sum conflict.

Waitrose – that supermarket “where the godless middle-classes go to worship” – illustrates this conflict. When a new Waitrose opens up, homeowners profit. They gain access to Britain’s favourite supermarket, and, as a result of their proximity to Waitrose, their properties increase in value by an average of £40,000. This is known the “Waitrose effect,” and it is celebrated by homeowners and estate agents alike.

But the arrival of Waitrose has another, hidden, effect on renters. My recent research with Generation Rent demonstrates that the arrival of a Waitrose is associated with an increase in local eviction rates of between 25 and 50%.

Activists in London campaigning for social housing and against gentrification and social cleansing . Photograph: Alamy Stock Photo

The two Waitrose effects go hand in hand. The rise in property values associated with the original Waitrose effect encourages local landlords to evict their tenants in order to raise their rents or put their properties up for sale.

Far from a rising tide, housing markets drain from one side of the pool into the other. There are winners and losers. The role of the reformer is to pick them.

If the economics of the housing generate inequality, the politics of housing exacerbate it. Around the world, urban policy is oriented toward a defence of homeowners’ interests. In cultures that prize homeownership, in particular – the “property-owning democracy,” the American dream, the pay de proprietaries – renters rarely figure.

Property tax systems are most striking. Council taxes in the United Kingdom are based on property evaluations conducted in 1991, ignoring two decades of rapid house price inflation. Meanwhile, policies like the bedroom tax – which charges for any room left unoccupied in a council flat – penalise renters the government perceives to be using more than their fair share of square footage.

American property taxes are similarly skewed. Where owners receive massive subsidies, like the American mortgage interest tax deduction, tenants receive little support from the government. In March, the White House proposed budget cuts to the Department of Housing and Urban Development that would take 250,000 rent vouchers away from low-income tenants. In total, 70% of all current housing expenditure by the American government is directed to subsidise homeowners.

“We are a forgotten part of society,” John, a tenant in Bristol, told me. “The private rental sector is useful for the government, because it keeps the homelessness numbers down. But there are too many people living in flats that are not suitable to live in,” he said. “We haven’t got a voice at all.”

Politicians are afraid to change their housing policies ... they are scared about the reactions from voters Sven Bergenstråhle, International Union of Tenants

Homeowners – wealthier and older citizens – tend to be more politically active, organising “not in my backyard” coalitions and voting as a consolidated constituency. Renters – poorer and with more precarious living situations – are less organised and, commonly, more disillusioned. The political calculus favours the former.

“Politicians are afraid to change their housing policies,” says Sven Bergenstråhle, president of the International Union of Tenants, headquartered in Stockholm. “The OECD and the EU commission have warned Sweden about their growing property bubble, but the politicians do nothing, because they are scared about the reactions from voters.”

Tenants today are fighting for change. In Britain, the voice of the renter grows louder each year. The Labour Party’s “government in waiting” appears committed to change. “No social cleansing, no jacking up rents, no exorbitant ground rents,” Jeremy Corbyn promised in his conference speech last week. The Tories are not far behind. Where the Conservative manifesto in 2015 failed to mention the rental sector once, the Conservative manifesto this June promised “New Council Housing Deals” for social housing construction.

It’s a change that’s long overdue — and may, in fact, be too little, too late. For renters fighting against the housing headwind, the government’s promises to build new homes fail to account for the full impact of the housing market on their standard of living today and their financial security tomorrow.

Their problem is not a lack of policy options. Books, reports, and policy papers overflow with compelling recommendations for land value taxes, inheritance taxes, and rental sector regulations to narrow the gap between owner and renter. But election after election, housing has remained our third rail.

“The upshot is that I am a 57-year-old man living in rented accommodation,” John says. “I haven’t got a huge pension, I haven’t got a huge amount of money put away, and I’m worried. When I finally have to give up work, where am I going to live?”

Some names have been changed in this article