When investors engage and act on human rights, it’s often with a focus on “upstream” human rights impacts, such as working conditions through companies’ supply chains. Among the “downstream” impacts that needs significantly more attention is the right to adequate housing. In all regions, the cost and quality of housing is at the forefront of people’s minds. As are the deep inequalities in who has access to adequate housing, and the housing implications of climate change.
Flows of public and private finance, and the interactions between them, have huge sway over the right to housing. In international human rights law, while the duty to take steps that progressively realize the right to adequate housing lies with governments, investors also have responsibilities to understand the ways they impact human rights – including the right to housing - and to take related action.
Investors’ interaction with the right to housing can be direct: for example real estate investment trusts (REITs), private equity firms, developers, asset owners (including sovereign wealth funds and pension funds) that buy, develop and own land and homes, and banks that provide financing in the form of mortgages and other loans.
It can also be indirect, for example when asset owners and managers invest into REITs as limited partners, invest in companies that develop, design and build housing, invest in infrastructure projects that may be involved in displacing people from their homes, or – even more broadly but just as significantly - invest in any company where the level of workers’ pay determines whether or not they can afford a decent place to live.
This piece doesn’t break down in detail the disparate roles and responsibilities for each type of investor. Instead it is a starting-point to spark greater awareness and action on the right to housing in the investment community.
The right to adequate housing is included in the Universal Declaration of Human Rights (article 25), and further elaborated in “General Comments” on the Convention on Economic, Social and Cultural Rights, particularly General Comment No. 4 on the right to adequate housing and No. 7 on forced evictions.
The right to adequate housing has seven core elements:
Security of tenure: Occupants of adequate housing have a degree of tenure security, which guarantees legal protection against forced evictions, harassment and other threats.
Availability of services, materials, facilities and infrastructure: Occupants of adequate housing have safe drinking water, adequate sanitation, energy for cooking, heating, lighting, food storage or refuse disposal.
Affordability: The cost of adequate housing does not threaten or compromise the occupants’ enjoyment of other human rights.
Habitability: Adequate housing guarantees physical safety and provides adequate space, as well as protection against the cold, damp, heat, rain, wind, other threats to health and structural hazards.
Accessibility: Adequate housing takes the specific needs of disadvantaged and marginalized groups into account.
Location: Housing is adequate if it is not cut off from employment opportunities, health-care services, schools, childcare centers and other social facilities, or located in polluted or dangerous areas.
Cultural adequacy: Adequate housing respects and takes into account the expression of cultural identity.
Housing and climate change
In a 2023 report, the UN Rapporteur on the Right to Housing recommended an additional core element, sustainability. The report elevates the implications of climate change for access to housing – from flooding, sea-level rise, extreme heat and weather events, with their disproportionate impacts on the poor – as well as housing and construction’s own major climate footprint in terms of materials and energy use.
Climate finance itself has significant implications for the right to housing – recognizing that this investment includes major infrastructure projects, shifts in energy use, and investment in building practices themselves. US$240 billion of climate finance went to buildings and infrastructure in 2021/22, according to the latest Global Landscape of Climate Finance.
For example, steps are needed to ensure that the benefits of green building and retrofits are spread widely, and do not push up costs for low-income residents - a risk acknowledged in a recent UBS bank briefing - Rethink, Rebuild, Reimagine. And without adequate planning, climate adaptation projects can protect certain areas of a neighborhood or city, while shifting increased flooding risk onto adjacent areas.
The Rapporteur recommends that investors shift investment away from a narrow focus on short-term profit-maximization that promotes over-building, to proactively support climate-resilient, carbon-neutral and affordable housing.
Steps to take
Shifting investment practices to fully align with the right to housing won’t happen overnight. But all investors can ensure that they have a greater understanding of those impacts, and take steps to ensure that they are contributing towards, rather than limiting, the realization of the right to adequate housing. The right to adequate housing is material to economic stability and to the systemic risk of inequality. And it has a material impact on people’s capacity to live lives with dignity.
Here are five steps to get started.
Internally
Assemble colleagues to map your firm / entity’s direct and indirect impacts on the right to housing. This can be an ongoing process, starting at the global / corporate level, and deepening to become more geographically and context-specific.
If your firm has separate departments for social responsibility / human rights and for climate mitigation, have them talk to each other! As climate finance flows into buildings and infrastructure it’s important to align this finance with existing human rights responsibilities and commitments - including on housing.
Externally
Engage with housing, tenant, and homelessness organizations to ensure that approaches are grounded in the lived reality and expertise of people who are inadequately housed.
Initiate and join discussions and action on the right to housing within the investor networks and professional bodies that you are a part of.
And partner strategically with local, regional or national governments to support bold and mission-oriented initiatives that aim to expand access to sustainable and affordable housing.
Finally, check out the additional resources below. And – investors and housing advocates who are reading this - what’s missing, what actions are you taking, what more is needed?
Materials to dig in to:
“The right to adequate housing”, a summary by UN Habitat
“State of the Sector”, a 2023 report by SHARE Canada.
The report proposes a set of recommended ESG disclosures for REITs. SHARE Canada says that if there disclosures are adopted, REITs could provide the data that would allow investors to identify, manage, prevent and/or mitigate adverse impacts related to the human right to adequate housing in their residential portfolios.” The disclosures are grouped into the areas of affordability, security of tenure, and habitability.
“The SHIFT Directives – From financialized to human rights-based housing”, and an accompanying article by Leilani Farha, “Governments and investors must work together to address the affordable housing crisis”.
In the article, Leilani, Global Director of The Shift and former UN Rapporteur on the Right to Housing, elaborates on the Directives’ approach:
“The Shift Directives are centered on the premise that by incorporating a human rights framework and standards into housing and finance policies and investment practices, governments and institutional investors will add value to the housing sector, not only extract it. A human rights approach is not based in charity or good-will, it is based in obligations and compels governments and businesses to act in a manner that ensures the long-term security of tenants through affordable housing, while providing adequate returns on investment.”
“ESG 2.0 Working Paper” from the Predistribution Initiative.
The Predistribution Initiative’s ESG 2.0 Working Paper is the starting point for its work on “systemic risks like inequality, biodiversity loss, and climate change, which manifest as systematic risks in markets and investors’ portfolios.”
Insights on urban land ownership mapping and implications for the right to housing in Cairo, Copenhagen, and Brussels
IHRB and partners’ Framework for Dignity in the Built Environment, a blueprint that guides investment and implementation of projects in line with human rights and the SDGs, putting the “S in ESG” into practice
On climate change, investment and the right to housing:
Recommendations for investors and business, from the UN Rapporteur on the Right to Housing’s 2023 report on climate change and the right to housing
IHRB’s Better Building(s) report, with recommendations for investors and policy makers on how to align climate mitigation in the built environment with human rights, including the right to housing and workers’ rights.