Uprooting Injustice: Exposing Georgia’s Housing Crisis and Predatory Lending

Interview with Vako Natsvlishvili from the political movement “Khma”.

In this insightful interview, Vako, a member of the “Khma” movement, sheds light on the housing crisis in Georgia and the challenges faced by anti-eviction activists in the country. The recent incident involving the eviction of a family has sparked public outrage, leading to the arrest of two Khma movement members who protested against the eviction alongside many other activists from different movements and groups. Vako discusses the broader context of indebtedness in Georgia, the intertwining of banking and private moneylenders, and the lack of a social safety net. The interview also delves into the media’s coverage of the issue, international support sought by activists, and the need for a comprehensive housing policy. Overall, the conversation provides valuable insights into the socio-political landscape and the ongoing struggle for housing rights in Georgia.

The interview was transcribed in Georgian by Giorgi Meskhi, and conducted and translated by Sopo Japaridze.

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Sopo: Can you tell us a little bit about yourself? Explain the current situation around housing and your two members being failed for our readers. 

Vako: In brief, we are the “Khma” movement, which formed three years ago to reintroduce class-related issues to the public agenda. Throughout this period, our primary focus has been on exposing the pharmaceutical mafia in Georgia, unveiling the mechanisms behind inflated drug prices, and shedding light on cartel dealings. For the past two years, we have been actively campaigning for universal free school meals in public schools across Georgia, addressing the critical issue of student nutrition.

Additionally, our efforts have extended to tackling pension loans, a significant concern for nearly half a million pensioners in Georgia. Many may be unaware of the pension loans, it involves high-interest rate loans being secured by the pension which takes years to pay back. Throughout this period, we actively supported empowering workers’, participating in events such as the Chiatura miners’ strike, and trying to equip workers with various tools to fight for their collective interests. 

Regarding recent events, on January 23 in Tbilisi, a family facing debts to a private moneylender was slated for eviction. This incident underscores the pervasive issue of indebtedness in Georgia, where loans are taken for various purposes, from education and medical procedures to basic sustenance. In contrast to the conventional portrayal of loans as an opportunity to enhance life, Georgia lacks essential life-risk protections. There is no unemployment insurance or assistance, no support for funeral expenses in case of a family member’s death, and with the privatization of up to 90% of the pharmaceutical and healthcare sectors, medical interventions and prices remain unregulated. In essence, the absence of a safety net exacerbates the impact of loans on individuals’ lives in Georgia.

In essence, our daily lives in Georgia are intricately entangled with debt, as approximately 550 out of every thousand people have bank debts alone. This statistic doesn’t even encompass the myriad forms of debt, including private money lending dealings and various fraudulent schemes that, although not called loans, are intricately linked to debt. On January 23, activists and supporters rallied on Kekelidze Street in central Tbilisi to oppose the eviction of a family with a small child. The police responded with shocking brutality during the protest, using a battering ram to break the building entrance door and forcefully entering the flat, where they violently expelled family supporters. In an attempt to divert police attention and halt the eviction, two members of the Khma movement, our organization, broke the windows of the enforcement police car. Consequently, these two individuals are currently incarcerated.

In Georgia, the practice of releasing individuals on bail, even for violent crimes, is not uncommon. However, the government’s plans for approximately 1,300 evictions suggest a potential shift towards a zero-tolerance policy, reminiscent of the approach adopted since 2007 during the previous government. This punitive stance, including keeping two individuals in prison, seems designed to send a stern message, discouraging resistance or collective action against the impending evictions. For us, this reflects the criminalization of social discontent and rightful anger present in Georgia. We are actively engaged in efforts to secure the release of these individuals and simultaneously working to politicize our society on broader issues like housing, eviction, and access to housing. By politicization, we mean framing these concerns not simply as technical matters but as political issues. Our society must broaden its perspective to recognize that the challenging conditions we face are not inevitable. Specific policy measures can ensure affordable housing and social security against inherent risks in our daily lives.

Sopo: Absolutely. In terms of navigating this process and achieving their release from prison with a fair trial, what steps do you envision? What, in your opinion, is necessary for the court to act justly in this situation?

Vako: Both of them, as founders of our movement Khma, also have connections with the academic space. One is a lecturer and doctor at Tbilisi State University (TSU), while the other is a doctoral candidate in anthropology at Ilia State University. Their arrest strongly reverberated in the public sphere, prompting the university community to demand their release. Students took over the chancellery of TSU, causing disruptions to the university’s usual activities, and have started a university strike until the release of these individuals. Concurrently, our movement is intensifying public pressure by organizing a march against the eviction and advocating for the release of the detainees. This has led to a growing public mobilization on the issue, and it appears that the government cannot entirely disregard this mounting pressure, which, to some extent, is yielding results. While the situation remains unclear, we persist in our efforts, recognizing that a return to normalcy is untenable. We are diversifying our tactics beyond street actions, acknowledging the weariness of Georgian society, and planning undisclosed forms of public intervention should timely releases not materialize. We recently entered the enforcement police station, articulating our demands, and briefly occupied it until being forcibly removed by the police.

Sopo: How do you view this topic of eviction? You said 1,300 planned evictions earlier, is that for this year?? 

Vako: This information doesn’t come from the enforcement police; rather, it originates from individuals consistently monitoring the situation. According to them, there are indications of plans for around 1,300 evictions.

There are plans for 1,300 evictions this year. Currently, three evictions have occurred consecutively, including the one I just mentioned. The following two evictions were temporarily delayed due to pockets of public resistance at the respective sites. Following the initial forceful eviction, the police, under public pressure, decided to postpone the next two. While the recent violent eviction has garnered significant public attention, it’s crucial to note that these delays don’t equate to a real postponement of the evictions. Therefore, our goal is to encourage as many people as possible to report impending evictions, fostering civil disobedience or on-site resistance. 

Additionally, there’s a societal stigma in Georgia around the non-payment of debts, leading many families to vacate their homes quietly to avoid drawing attention. We tell people that it is not their fault, that the addressee of the accusation should be changed. The fact that we are poor is not an individual responsibility; it is due to our structural circumstances, the privatized health care, privatized pharmaceutical sector, privatized housing policy. Having a roof over our heads in Georgia is an individual responsibility. Because of the Soviet Union’s favorable housing policy, there was a substantial stock of homes owned by people after the collapse of the Soviet Union. Since there was nothing else to safeguard people from the vicissitudes of life and life cycle, the home became their sole form of insurance.

As mentioned earlier, in Georgia, people resort to taking out loans for nearly everything, such as for fines by the individuals affected by the zero-tolerance policy or to secure release from prison and pay bail. Some even mortgage their houses to make these payments. The reality of the post-Soviet system further exacerbated the situation, as these apartments, once a means of insurance against risk, had to be commoditized.

These loans, however, serve a different purpose, as the lender, often a moneylender, is not actually concerned with loan repayment but really wants to acquire the property. A legal mechanism, akin to a purchase with the right of redemption, facilitates this process. While legally distinct from a loan, it functions similarly, and failure to meet monthly installments or adhere to formal terms results in automatic loss of the property. In 2013, evictions by police were prohibited in Georgia under the new government, involving the court in the process. However, this only provides temporary relief, as state welfare institutions are conspicuously absent, leaving threatened families with eviction as they navigate a system devoid of housing or employment support.

Sopo: You know, it’s interesting to see the media diving into this topic. Normally, they avoid it like the plague because both the opposition and the government are gung ho about the free-market narrative. But with people struggling under the weight of debt, it’s making its way into the spotlight. It’s a shift, finally bringing some attention to issues that usually get swept under the rug.

What caught your attention in the media coverage, and what did you find interesting or maybe not so appealing?

Vako: Yes, the media was compelled to pay more attention, mainly due to the repercussions of police violence during the eviction. However, the fundamental issue of forcibly displacing a family without providing alternative housing received less coverage. What’s intriguing is the Georgian media’s attempt to frame this as a problem solely related to private moneylenders. The narrative suggests a solution wherein individuals dealing with private moneylenders should turn to banks. This portrayal aims to isolate societal dissatisfaction, urging people not to target banks but to focus on the “bad” private moneylenders. Yet, the case of the family on Kekelidze Street clearly exposes the unity and interconnectedness of the banking and private moneylender system. This family, grappling with a bank debt, was directed by a bank employee to seek assistance from a private money lender after missing a payment for only 1.5 months.

Such instances indeed exist, leading to public suspicions that private moneylenders maintain connections with banks. Additionally, in Georgia, it’s noteworthy that banks often boast about their involvement in financing artistic projects, from literary prizes to various artistic residencies and programs. This strategy is employed to portray a positive image in society and claim credit for the success of Georgian sports and art. However, this dual approach, financing artistic projects with one hand while participating in evictions with the other, has had repercussions on their reputation. In response, over the last decade, banks have attempted to distance themselves by selling so-called “problem loans” to no-name business entities. These entities then engage in debt collection and foreclosures, effectively removing these detrimental actions from the public perception of the banks’ image. It’s crucial to remember, and we strive to highlight, that bank interest rates often leave individuals insolvent, placing them in precarious financial situations.

Each year, the profits of banks in Georgia reach new heights, with records consistently broken. For instance, in the first six months of 2023 alone, Georgian banks amassed a staggering profit of 1.125 billion GEL. The media had to get involved in the situation partly spurred by the fact that those detained under criminal law had connections to academia and it sparked protests from the university community. It’s crucial to note that alongside the two individuals detained, 18 others faced hefty administrative fines designed to deter them from participating in pre-eviction processes multiple times. Ironically, these substantial fines paid by those who are against evictions end up indirectly financing the activities of the enforcement police. They have to pay. Failing to pay the fines leads to liens on their houses or if they don’t have a house on their bank accounts,  effectively removing individuals from economic life.

Sopo: To wrap up, let’s discuss the type of international support you are seeking. We will include this information in our article and will enable people to engage and provide assistance.

Vako: The dissemination of information is crucial for us. We are aware that various countries, whether in Eastern Europe, Central-Western Europe, or Asia, are engaged in similar campaigns against evictions and similar struggles. Drawing international attention to the predatory money-credit system in Georgia is significant. Solidarity to Georgian left-wing groups from around the world is essential, and the exchange of  tactics of resistance is crucial. Learning how others respond to similar evictions or larger issues with banks elsewhere can provide valuable insights.

Sopo: And one final question. I recall a narrative suggesting that such issues don’t happen in the European Union, insinuating that the Georgian government isn’t adhering to European standards. Additionally, there’s a belief  that evictions shouldn’t happen in winter but are permissible in summer. What are your thoughts about that?

Vako: Absolutely, since our political class, even those in the opposition, seems to have no qualms with the prevailing banking and money-credit system. Their solution is to suggest that evictions are only objectionable in winter, as if displacing families under the summer sun is somehow acceptable! We’ve witnessed similar instances of people fighting back against evictions and the housing crisis on a national scale in Spain. Establishing an international standard to safeguard these rights is crucial, but we must recognize that this is not just a fight for rights; it’s a battle for a comprehensive housing policy. Simply prohibiting winter evictions won’t address the larger housing problem. Many Georgians migrate abroad primarily for housing, leaving their families for years. The issues are deeper than the immediate problem of evictions. There are many broader challenges to housing accessibility.

Sopo: That’s my experience too, and it’s fascinating to note that many individuals cite housing concerns as a primary reason for emigration. What adds an interesting twist to the situation is that due to the lack of regulation in Georgia, immigrants themselves inadvertently contribute to the housing crisis. They often purchase multiple apartments with the intention of returning to Georgia and renting out these additional properties for future income, either for themselves or their families which drives up housing prices. It’s a cycle.

Vako: That’s precisely how I see it. The migration is significant, driven by three main reasons: either to free the apartment from the bank and the moneylender, or to purchase an apartment, or to enhance living conditions. The primary motivation is consistently centered around housing. Purchasing an apartment with earnings in Georgia, even for those with average salaries, is an impractical feat. Thus, individuals go abroad, but this doesn’t alleviate the demand for apartments in Georgia. Those who manage to buy an apartment often seek to acquire additional ones, intending to generate income through renting when they return. This dynamic contributes to the continuous housing challenges we face.

Sopo: There cannot be a solution at the individual level. That’s why housing policy is necessary…

Vako: Absolutely. The need for public housing is undeniable. State-driven housing construction should cater to relatively low-income families who, while not economically destitute, still face challenges. The state must provide a structured solution for these individuals, offering them a means to secure housing. Although there are some small and feeble municipal programs, like rent subsidies, they fall significantly short of meeting the overwhelming demand. A comprehensive state program designed to assist individuals with average or slightly lower incomes in acquiring housing is notably absent. 

Thank you!