Occupy Wall Street & Housing

By Jesse M. Keenan, Managing Editor, Housing.com

The legal status of the property underlying the home of the Occupy Wall Street protest in lower Manhattan is such that of all of the housing structures in the U.S.— these residents can’t be evicted. The property known as Zuccotti Park is owned not by the City of New York but by Brookfield Office Properties Inc.. The privately owned park is subject to 1968 land use restrictions which guarantee public access to the park twenty-four (24) hours a day. As such, neither the City nor Brookfield can evict the temporary residents simply by virtue of their construction and occupation of temporary shelters.

 

John E. Zuccotti, the park’s namesake, provides a personal narrative for how leadership can transcend public and private capacities. Mr. Zuccotti went from membership in the Great Society as an advisor to LBJ to cross back and forth between Democratic and Republican causes in an evolution from urban planning civil servant to private developer. In many ways, Mr. Zuccotti as an Italian-American represents the best of the American rationalist tradition whose political center is defined by underlying notions of pragmatic populism. Yet, the irony is that Mr. Zuccotti also made his personal fortune, as the U.S. President of Brookfield, in the very corporate world which much of the populace occupying the park are now openly questioning.

 So how does the Occupy Wall Street rhetorically find satisfaction in its emancipatory ontologies and that of a great uniquely American capitalist narrative? After all, it is at the scale of the individual liberalism that “People Not Profits” resonates. Some protestors might disregard Zuccotti’s narrative as being ad hominem to the “1%.” However, this discourse is as fallacious as any other rhetoric of class warfare. It is the manipulation of this doxa which have becomes instruments of those that the protestors themselves decry. By and large, however, the story of Mr. Zuccotti would resonate with many protestors who have dedicated themselves to public service. So, if there is a way to serve both a societal and a corporate interest as told through Mr. Zuccotti’s personal narrative, then there has to be room for the notions of the corporate form.

This begs the question as to what is the difference between a housing cooperative and a shareholder of a publically traded housing corporation? Would the protestors necessarily choose the cooperative over the corporate shares? The issue is not just one of internalized ethical obligations, as one would think. After all, corporate CEO’s have the same fiduciary duties, as does the management board of a co-op. Perhaps, the lesson is about the limitations of how far you can “scale-up” community and capital. At some breaking point, society stops working together even though it is in their common interest to do so.

In the case at hand, markets scaled-up mortgage capital to a point where de-territorialization of equity in favor of debt disincentivized homeowners to keep paying their upside down mortgages created by the speculation created by this very process. The shareholders of the owners of the securitized mortgage pieces used their exclusion rights to foreclose households even though it is in their net joint interest not to destabilize society and markets. Michael Heller famously described this tendency as the Tragedy of the Anticommons; wherein, in this case, the home as an asset class defined by its property rights is ultimately devalued by virtue of its underutilization (i.e., exclusion by virtue of foreclosure). However, the flipside of this problem is that entirely localized sources of capital may not be adequate to support local demand, as was the case prior to Fannie Mae. Like many problems facing the American housing market, there are no easy answers.

Any of the answers one may indulge in are largely within the realm of systematic reform given the constitutional bundle of rights afforded to real property. However, the protestors are not content with systematic reform—many want a whole new system. This rhetoric is clouded by the predominating patriotic narrative which implies systematic reform within the existing rule of law. Perhaps the ultimate lesson to be taken from Occupy Wall Street is not one of radical intervention, but the idea that laws (e.g., mortgage and/or securities fraud laws) should be applied fairly and consistently. In this sense, Occupy Wall Street becomes a matter of an advocacy for justice and accountability from within the system. Justice is one activity that has historically been retained at the scale of the community. So, it is no wonder that the allegorical vigilante mob has its place in popular culture. This protest is an opportunity for people to leave the isolation of their houses to participate in a recital with a choreography which means something to the world beyond the content of the chants, signs and digital propaganda.


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