11 / 2006
REITs lead to loss of tax receipts.
REITs in the real estate sectors encourage the irreversible replacement of long-term social investment at low rates of profit by short-term financial investment at very high rates of profit.
REITs stimulate public, municipal, industrial and other such owners to sell off and privatise their properties.
REITs because of their share holder value orientation on high returns lead to higher rents, disinvestment and demolition, the splitting of rented housing into individual leaseholds and freeholds, the replacement of social housing by expensive condominiums, which can be followed by forced evictions.
Loss of social accountability, participation.
Loss of local jobs.
Municipalities and other public institutions lose strategic instruments with which to promote affordable housing and socially inclusive cities.
REITs lead to a massive concentration of financial power and anti-democratic political influence.
REITs make housing markets dependent on international speculation bubbles.
REITs even increase the economical pressure on other public real estates.
Strategies of REITs in housing
Personnel reduction of employees
Buying out of social, public and low-cost housing
Violent rent increase and increase of heating costs, service charges etc.
Demolishing of affordable complexes and replacement by more profitable buildings
Disinvestments, neglect of/worse maintenance of the housing stock
Pressure to leave on financially disfavoured tenants, replacements by wealthy residents
Stop of social neighbourhoods programmes, participation process etc.
Construction on public spaces, privatisation of public spaces
Lobbying governments for weakening legal standards
Exit to private funds