The Housing Question in Romania Pt. 2

The Romanian Bourgeoisie’s “Solution”

The housing question has caught the eye of some Romanian politicians, who are poised to transform it into a new tool of exploitation—lulling both the proletariat and middle classes into futile illusions.

The most well-known proposal from the Romanian capitalist class is the so-called “Simion Plan,” whose namesake is George Simion, the far-right presidential candidate.

He asserts that “Romanians must have their own home” and proposes constructing up to one million (sic) dwellings. Prices would start at 35,000 euros for a two-room, 50-square-meter apartment.

These homes would be built outside major cities, accompanied by the accompanying necessary infrastructure: kindergartens, schools, shopping centers, pharmacies, and sports centers.

The plan also includes constructing roads with at least four lanes in these areas.

To finance these homes, the plan lays out that:

“In addition to the option of paying with personal funds, financing will be provided through a special program exclusively for these apartments, offered directly with zero interest for buyers, for a period of 10 to 25 years, depending on demand.”

Under the plan, a 50–55 square meter apartment would require a down payment of 1,000 euros and a fixed monthly installment of 120 euros for 25 years. This means that the final price remains the same as the initial one, regardless of inflation.

In contrast, a similar two-bedroom apartment in Bucharest currently costs between 75,000 and 120,000 euros, averaging about 1,770 euros per square meter.

In Cluj-Napoca, the price of a two-bedroom apartment would increase to 280,000 euros—roughly 3,000 euros per square meter.

Naturally, the finite number of homes will require specific conditions for their sale:

“Eligibility will be based on factors such as age, number of children, number of properties owned (none, one, or two or more), marital status, etc.”

Even those who own multiple properties might be eligible for such a “generous” offer!

As for who will build these homes, Simion and his party (AUR) seem to have all the details figured out.

He contends that the state will try to attract investors by providing the land and permits, whilst offering a “modest profit” to the capitalists who construct these apartments.

Simion adds, of course, that we live in a “free market,” so no capitalist will be forced to participate—only those willing to accept a below-average profit margin will take part.

“In this program the land is paid for by the state. We don’t give free money, we don’t give free houses, but we are offering them at the production cost plus a lower profit rate for those who will build them.”

Naturally, if capitalists are not compensated in one way or another by the state for selling these homes at a lower-than-average profit margin, they will simply invest their capital elsewhere.

We know from Engels that “in the case of commodities with a long period of wear, the possibility arises of selling their use value piecemeal and each time for a definite period, that is to say, to let it out.

The piecemeal sale therefore realizes the exchange value only gradually. As a compensation for his renouncing the immediate repayment of the capital advanced and the profit earned on it, the seller receives an increased price, interest, whose rate is determined by the laws of political economy and not by any means in an arbitrary fashion.” _{(Engels, The Housing Question)}

Thus, even for the capital invested in constructing these apartments—which will only gradually appreciate as the exchange value of the homes is realized—the capitalist should be compensated through interest.

“But no,” Simion asserts, this will not happen, because a “zero-interest loan has been established.”

Let’s listen to Engels once more:

“Nothing is therefore easier for Proudhon than to issue a decree—as soon as he has the power to do so—reducing the rate of interest to one per cent.

And if all the other social conditions remained as they were, then indeed this Proudhonist decree would exist on paper only.

The rate of interest will continue to be governed by the economic laws to which it is subject today, despite all decrees. Persons possessing credit will continue to borrow money at two, three, four and more per cent, according to circumstances, just as much as before, and the only difference will be that the financiers will be very careful to advance money only to persons from whom no subsequent court proceedings might be expected.

Moreover this great plan to deprive capital of its “productivity” is as old as the hills; it is as old as-the usury laws which aimed at nothing else but limiting the rate of interest, and which have since been abolished everywhere because in practice they were continually broken or circumvented, and the state was compelled to admit its impotence against the laws of social production.” _{(Engels, The Housing Question)}

To this we must add that since the buyers would pay for these houses over a period of 25 years, they would be sold with a loan.

Hence, the state would have to compensate the banks which provide these zero percent interest loans.

As far as the future owners of these houses are concerned, as the infrastructure near the flats is developed, the land rent (which constitutes a large part of the rent paid for a house or flat) will increase accordingly. As a result, these new homeowners could profit immensely by renting them out or reselling them.

Naturally, the capitalist class (and we know that the bourgeois state is nothing more than a committee managing the common affairs of the entire bourgeoisie) will only choose to invest in low-profit sectors if they foresee a long-term benefit as a class.

However, since this is only the outline of a plan—lacking crucial details and likely never to be implemented—a complete analysis of the program is not currently possible.

Having examined these absurdities, we must nevertheless prove that this very limited “solution” would in no way resolve the housing issue.

This project wouldn’t even come close to meeting the current demand for housing.

The very limitation on the number of apartments to be built (capped at one million) clearly demonstrates how inadequate this project is.

Moreover, Simion fails to mention any plans to improve the infrastructure of slums and degraded urban areas. Building homes outside of urban centers will not prevent the housing shortage from reemerging in these new communities, once people move there to find work in services such as shopping centers, sports centers, hospitals, and newly constructed schools.

As for Simion’s slogan:

“every Romanian should have his own home”—should the proletariat embrace it as a means of improving workers’ conditions?

In reality, this slogan isn’t an original stroke of genius by Simion; rather, it reflects the class interests of the petty bourgeoisie, as exemplified long ago by Proudhon.

Our utopian, together with his disciples, decried the plight of workers and the petty bourgeoisie who did not own their own home.

This is a condition we see as a regression to pre-capitalist production methods, in which the producer owned his home and even some tools or a small plot of land.

The worsening situation for small producers—after being expropriated and subsequently crowded into factories and working-class neighborhoods with deplorable living and working conditions—was viewed as a detrimental outcome of the Industrial Revolution and the rise of capitalism.

Thus, a plan aimed at restoring pre-capitalist conditions would be nothing short of a reactionary attempt.

The Proletarian Solution to the Housing Question

Capitalism did not develop by turning every worker into a homeowner. Instead, it disowned petty-producers of their property, converting them into proletarians.

Proletarians, in turn, are condemned to live precisely where capital dictates.

If all workers were to own their homes, their redeployment would be severely checked.

Capital induces the movement of workers to move from one location to another in search of employment where demand is highest. It encourages highly-educated young people to relocate to cities where their skills are more in demand.

Wherever capital goes in its accumulation process, workers are driven to follow it.

Yet it is precisely this dynamic that liberated the pre-capitalist small producer from the stagnation and misery of village life. Free from personal servitude to a lord, he was compelled to join the ranks of the proletarian masses.

Unlike the scattered serfs, today’s urban proletariat is far better positioned with modern communication and organization to confront the forces that terrorise them.  As such, the seeds of a new mode of production are laid—one destined to conclude class antagonisms and, with them, exploitation.

Engels confirms this.

Small producers’ conditions will inevitably continue to worsen as a result of their expropriation. However, calling for an end to this process completely repudiates the social progress it represents—the only means of developing capitalism and laying the groundwork for communism.

The communist revolution will never be led by the petty-proprietors. Their greatest desire is to preserve however little property they have to the bitter end:

“The hand weaver who had his little house, garden and field along with his loom, was a quiet, contented man ‘in all godliness and respectability’ despite all misery and despite all political pressure; he doffed his cap to the rich, to the priests and to the officials of the state; and inwardly was altogether a slave.

It is precisely modern large-scale industry, which has turned the worker, formerly chained to the land, into a completely propertyless proletarian, liberated from all traditional fetters and free as a [jail-]bird; it is precisely this economic revolution which has created the sole conditions under which the exploitation of the working class in its final form, in the capitalist mode of production, can be overthrown.

And now comes this tearful Proudhonist and bewails the driving of the workers from hearth and home as though it were a great retrogression instead of being the very first condition for their intellectual emancipation… The English proletarian of 1872 is on an infinitely higher level than the rural weaver of 1772 with his ‘hearth and home.’

Will the troglodyte with his cave, the Australian aborigine with his clay hut, and the Indian with his hearth ever accomplish a June insurrection and a Paris Commune?” _{(Engels, The Housing Question)}

The inherent contradiction of the Proudhonian and petty-bourgeois dream—to grant everyone home ownership within a bourgeois system—proves even more futile precisely when it appears closest to realizing this regressive utopia.

Romania’s extremely high rate of homeownership is clear evidence of this contradiction, as its housing conditions are far worse than those in Switzerland, where the rate is less than half that of Romania.

This occurs because there isn’t, and never will be, a solution to the housing problem within capitalism.

The only solution will emerge from the proletarian revolution!

From the outset, merely stripping the bourgeoisie of political power will not immediately solve the housing issue.

However, a process will begin with the expropriation of the comfortable homes of capitalists and the occupation of the hundreds of thousands of vacant houses—in Romania and everywhere else—by the proletariat.

Only the revolutionary dictatorship of the working class, within the framework of an international revolution, will abolish capitalist relations of production and pave the way for a society without classes or private property.

In this process, major cities—and the very divide between urban and rural—will slowly but surely vanish, consigned to nothing more than the refuse of history.