Doing Squat About a Market Failure

Posted by Andrew Macurak on May 19, 2008

Not all squatters dwell in densely packed slums on the outskirts of developing world megacities, or use vacant properties in the blighted urban core as a staging area for criminal activity. Many, in fact, squat by choice in the gentrifying cities of industrial nations.

Issues of sanitation and safety remain key public concerns with squatting, but a distinct advantage of tolerating the practice is its potential to establish, de facto, a “use it or lose it” real-estate policy: the risk of having to enter the drawn-out, public process of evicting low-income squatters gives landowners incentive to keep properties occupied.

In Amsterdam, where it is perhaps most prevalent, tolerance of squatting has restored vitality to urban cores—and if adapted for the United States, it perhaps could mitigate the growing problem of vacant properties.

Travel blogger Philippa Burne describes squatters in Amsterdam who maintain their tenancy for years, registering with authorities and even paying taxes. Burne writes that any building left unoccupied for a year is fair game for squatting, and once the new occupants register with police and demonstrate residence (with a bed, a table, and a chair—known as a squat set), the burden is on the land-owner to remove them. As many of these properties are owned by the government (as are many vacant properties in American cities), for some squatters the removal never comes. Burne describes one squat that had been continuously inhabited for 25 years as a “real home,” with access to gas, water, and electricity.

In The Stimulus of a Little Confusion: On Spuistraat, Amsterdam, Soja describes his time in 1990 spent living in what was then the epicenter of the Amsterdam squatting movement. Soja wrote of an environment where students and newly minted young professionals could land as they transitioned into their new roles and into adult society. The eclectic shops and services that came with them created an active commercial core—and just as residents had room to transition, so did the neighborhood, as its new vitality gradually accommodated outside investment.

Sojas left leanings are not shared by all, and many assert that squatting is on the decline in Amsterdam. Meanwhile, government reactions to squatting have provided other solutions—with caveats. Burne writes of groups that operate under Dutch anti-squat or “anti-kraak” law help to locate tenants (frequently students) in vacant properties at low rents. While anti-squat tenants can be evicted for redevelopment with only two weeks notice, this casual tenancy can be ideal for graduate students like Flora, a 23-year-old anti-squatter in a converted warehouse in the center of the city.

But not all squats are as amenable as where Burne stayed—as Canadian Broadcast Corporation journalist Nancy Durham reports, living conditions in squats can often be very poor. And anti-squats are not sustainable long-term solutions for affordable housing. Not that many people squat in Amsterdam, anyway—Durham reports an estimate of anywhere from a few hundred to 1,500 squatters, down from a high of 10,000 in the early 1980s.

The value of the squat is not the squat itself, or the anti-squat, but squattings psychological impact on the real-estate market. Joost Koenders, an entrepreneur with an anti-squat agency, perhaps puts it most simply:

I think it’s good that the system is there, the squat system, because it keeps the real estate market precise. If squatters are not there, many owners of real estate can leave buildings empty for as long as they like …

Meanwhile, back in the United States, our real-estate market has become highly imprecise. Sprawl and an epic foreclosure crisis have left our cities with an abundance of vacant properties, and the crime and deterrence to investment associated with vacant properties are nothing new. In the absence of actual residents, looters and defrauders are using these properties as their own personal bank accounts, robbing them of their valuable infrastructure and demanding large sums of money to vacate premises they dont even occupy.

These homes should be used a resource to provide access to high-quality, affordable housing—but without a mechanism to make this happen, they’re being vandalized and entangled in legal messes that make future occupancy even more difficult.

We have the supply and we have the demand—let’s come up with a way to provide the market with some incentive to acquaint the two.

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