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A Call to End the Rentist Economy (to Avoid War with China…)

mardi 16 juillet 2024, par Juan Alberto Ruiz Casado

Málaga, renowned for its stunning beaches and rich cultural heritage, is facing a severe housing crisis fuelled by the surge in tourist rentals. Recently, residents took to the streets in protest, holding signs such as “Málaga to live, not to survive”, “I don’t want to be an extra in my city”, “Ban tourist housing”, “There’s no water for so many tourists”, “Housing is a right, not a business”, and “Our rent = your payout”. These messages underscore the struggle for affordable housing as rental prices soar.

The root of the problem is the rentist economy, which prioritizes short-term rental profits over long-term housing needs. Málaga has the third highest number of tourist rental properties in Spain, despite its smaller population compared to Madrid and Barcelona. Reliance on property rentals creates precarious labour conditions, where wages fail to keep up with housing costs. This situation traps workers in a cycle of working merely to pay the bills (i.e., modern slavery), with little hope of improving their living conditions. Young people are particularly affected, with the probability of buying a home virtually nonexistent without family support. This exacerbates social inequalities, creating a divide between families of “wealthy homeowners” and “working-class renters”.

The problem of the rentist economy brings with it broader issues. For example, the influx of tourists strains local resources, as highlighted by the protest slogan “There’s no water for so many tourists”, emphasizing water scarcity exacerbated by high tourist demand in an area already suffering from serious water deficits and increasing droughts due to climate change. Moreover, heavy investment by financial funds in the rental economy artificially inflates prices, making it more difficult for individual workers to compete in the market against these economic giants. And a lot of the income generated by tourist rentals (and even normal rentals) goes abroad to international investors, leaving nothing in the country. The high profit of this rentist economy also deprives other crucial sectors of the economy of investment, making Spain (and other Western economies that face similar problems) more dependent on tourism and less competitive against economies prioritizing industry or technology, such as China.

As a result of unproductive over-investment in the new real estate bubble, Western economies struggle, and the cost of living becomes increasingly burdensome for workers. Our governments and capital have not only failed to learn from the 2008 crisis but are exacerbating the problem by adding tourist rentals into the mix. No wonder large segments of society are highly discontented. This growing disparity between the rentist economies of the West and the more productive economies of countries like China drives people to support politicians who promise to contain immigration or China, rather than addressing the real underlying issue : the need to shift our economic priorities. By reducing the cost of living and economic inequality, and ensuring that residents can thrive rather than merely survive, we could build a more equitable and sustainable future for all, and lessen international resentment against external “others”.

Unfortunately, the measures chosen so far are purely reactionary : militarism and protectionism aimed at containing perceived “enemies” like China, which besides being ineffective, only increases inflation, once again raising the cost of living and harming those with lower incomes. Not to mention the unbearable costs of increasing militarism and a future “hot” war… Hopefully, platforms like Airbnb will be forbidden in the short term, following initiatives like those planned in the cities of New York and Barcelona and the ones recently demanded in Málaga.

Juan Alberto Ruiz Casado

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