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The Financialization of Housing Production in Brussels
Abstract
This article focuses on the financialization of housing production in the Brussels-Capital Region, examining the increased presence and use of financial capital in housing production. Information collected by local administrations when granting building permits is used to undertake a large-scale examination of companies involved in housing provision in Brussels in the 2000s in order to identify the origins of capital invested in housing development projects and to assess to what extent it can be considered as ‘financialized’. The use of this data set allows me to estimate the ‘market share’ of financial capital in housing production and to analyse the geography of these investments in the built environment. This spatial analysis also provides some insights for a discussion about the possible social consequences of this influx of financial capital into the urban space. The task of empirically ‘measuring’ financialization raises numerous methodological questions. A choice has to be made between a wide range of definitions, both for financial activities and the financialization process. Moreover, for the purpose of quantifying the phenomenon, these concepts are made operational and turned into indicators. In addition to providing information about the investment of financial capital in housing production and the concrete forms it may take in a city such as Brussels, I venture to suggest that this article also contributes to the methodological ‘toolbox’ available to researchers in the field of financialization.
... It is generally taken by the developers who will sell the dwellings to their homeowners. However, some aspects of housing production can be considered financialization (Romainville, 2017). ...
... Financialization is pervasive in other non-financial sectors of the economy, including the massive development of the housing sector. Some studies in North America and European countries (August, 2020;Fields and Uffer, 2014;Romainville, 2017;Wainwright and Manville, 2016;Wijburg and Aalbers, 2017) indicate that financialization also transforms the housing markets. The financialization of housing markets could result in increased mortgage debt, higher levels of mortgage debt securitization, higher house prices, and higher levels of personal debt . ...
... Investigation in housing financialization highlighted significantly impacted aspects of housing, including rental housing (Fields, 2017), homeownership (Kohl, 2018;Langley, 2007), housing providers , housing rights (Rolnik, 2013) with the least investigated aspect that is housing production (Romainville, 2017). Most studies of housing financialization focused on advanced-economy countries, particularly North America and European countries. ...
There has not been a lot of focus on housing financialization literature in Indonesia, except for Lee (1996). This article focuses on the financialization of housing in Indonesia in the past thirty years, including the actors and their roles in transforming housing production. The fall of the New Order regime in 1998 spurred the process of democratization and marked the transformation of Indonesia from an authoritarian rule into a more democratic government. We offer an analytical framework that centers on the transformation of housing production due to the government system changes. We interviewed public and private developers, financial actors, and government officials in Jakarta and Surabaya. The data sources for this article also include federal and local housing regulations, unpublished and published housing reports, and local and national newspapers in Indonesia. This article contributes to the discussion of how housing policy and practice changes result in the transformation of housing production. The Housing and Settlement Law 1/2011 provides new provisions that the government needs to assist low-income residents through tax incentives, insurance permits, the provision of land and public utilities, and land title registrations. We explain how these new provisions shape actors and their roles in housing production, arguing that homeownership is central to the financialization of housing in Indonesia.
... They subsequently moved into housing (apartments, serviced housing complexes), thus "re-developing" part of their asset portfolio (Aalbers, 2016) and in so doing, echoing a very old tradition of financial investors' involvement in large cities (Lescure, 1982). In addition, the presence of international shareholders resulting from the IPO of several real estate developers has increased the numbers of financialized organizations in the housing sector, both in Europe (for example, Belgium - Romainville, 2017) and in Latin American countries (such as Brazil -Pereira 2017). Housing has thus been seen as a prime example of the financialization of non-financial firms and industries dominated by financial narratives and practices (Aalbers, 2016). ...
... Several researches on financialization of cities have already focused on historical players. A pioneering study focused on how financial capital was injected into local authorities' debt instruments (Weber, 2010), while other researchers have looked at the shareholder structure of real estate developers and the influence of financial markets on the property development industry (Aalbers, 2016;Lorrain, 2011;Romainville, 2017;Sanfelici and Halbert, 2015). We focus on the way developers were colonized or not by financial calculations. ...
... In addition, the aim was to vary the type of business sampled. The French real estate industry has diversified organizations that can be classified into different typologies (Romainville 2017;Pollard, 2018). Some are publicly-traded companies, some are non-listed, others are subsidiaries of financial groups. ...
Financialization, even contested, is a major focus of contemporary urban studies. The growing interest of institutional investors in real estate investments has been the subject of in-depth analyses that have suggested the need to critically examine their weight in contemporary urban production. Have investors become the new masters of the urban fabric, to the detriment of historical players such as property developers or local authorities? This article informs the discussion by looking at developers at work and identifying how financial profitability calculations could have invaded their activities. Based on a qualitative survey conducted in France on practising or retired professionals, it shows that there has actually been a surprising degree of stability in professional practices over the past 50 years, even though the economic environment changed at the beginning of the 1990s. Since the origins of the property development sector in France, the real estate firms have had close ties with the financial industry and have been using financial instruments. This is why they were considered as ‘financial natives’, while employees at the operational level remain outside the scope of the colonization of organizations by financial quantifications. The specific nature of real estate work, particularly its political component, means that decisions lower down in these companies cannot be guided solely by financial ratios. The extent of the changes triggered by the massive arrival of financial investments has not been as great as it may seem, since developers appear to have maintained most of their ability to influence contemporary urban governance.
... In doing so, it not only shows that privatised Keynesianism can link different kinds of households to extensive housing debt, but also that the regressive turn to private landlordism in post-crisis housing systems is variegated across time and space (Fernandez & Aalbers, 2016;Schwartz & Seabrooke, 2009). Second, by highlighting how commercial banks and private property developers use the money from private landlords to construct new housing units, this paper also highlights an important supply-side characteristic of privatised Keynesianism that is often disregarded by the literature (but see Romainville, 2017;Sanfelici & Halbert, 2016). In other words, this paper presents a national case study where besides commercial banks also private property developers play a key role in sustaining privatised Keynesianism (see also Pollard, 2011;Van Loon, 2016). ...
... That is to say, state-authorised credit loans were mostly used to fund new housing production and to reduce the tight supply of housing in French metropolitan regions (Gobillon & le Blanc, 2008). This supply-side characteristic of privatised Keynesianism is an important and distinctive component of the French housing model and also indicates that privatised Keynesianism was never solely about stimulating aggregate demand (but see Romainville, 2017;Sanfelici & Halbert, 2016). ...
... Another important conclusion is that the literature should not only address how global finance pushes homeowners into more debt, but also explore how credit expansion affect the supply-side of housing production, private landlords and private property developers (cf. Romainville, 2017;Van Loon, 2016). Furthermore, the French case shows that as long as a credit supply is targeted at different sectors of the housing economy, credit expansion can unfold in a more balanced and controlled way without necessarily over-leveraging the credit system (Tutin & Vorms, 2014). ...
In 2008, it became clear that the pre-crisis growth model of privatised Keynesianism was at least temporarily undermined by the global financial crisis. Instead, housing scholars started pointing out that the combination of reduced home ownership and the resurgence of private landlordism indicated a shifting approach to housing wealth in capitalist societies. However, this research on the housing market of France demonstrates that the rise of private landlordism does not necessarily undermine home ownership. Unlike in many other European countries, pre-crisis credit expansion in France was not only targeted at homeowners, but also at private landlords and buy-to-let investors that used state-authorised credit loans to fund investments in the private rental sector. Because the rise of private landlordism in France has rather complemented than undermined home ownership, this paper shows that privatised Keynesianism in France has both linked homeowners and private landlords to extensive housing debt.
... Research has highlighted the way residential property, in a broad sense, is increasingly seen as an asset class (Ward & Swyngedouw, 2018), ranging from individual property owners seeing their homes in terms of future capital gains, to the huge growth in institutional investment as yields from residential property grow substantially relative to commercial property. This work reveals the new forms of finance that have emerged in order to fund both housing consumption (Gotham, 2009;Smith et al., 2017) and production (Bardet et al., 2020;Romainville, 2017), its associated actors and activities (Chiapello, 2015;Raco et al., 2019;Theurillat et al., 2010Theurillat et al., , 2015Weber, 2016), and their connection to wider financial markets, conceptualised under the umbrella of a financialised model of housing production and consumption (Aalbers, 2019). This is a broad literature, in which the idea of residential investment is well discussed; however there have been calls for greater clarity about different forms of residential investment, and a more thorough understanding of different actors and practices (Campbell et al., 2014;Özogul & Tasan-Kok, 2020;Raco et al., 2019). ...
... Categorisation also has a tendency to iron out historicity. For example, the relatively recent incursion of nonbank financial institutions into residential investment begs the question of when and why institutional investors began to enter this area (Romainville, 2017). The answer may be different in different geographical contexts, and may encompass different scales and different types of actor (Aalbers, 2017). ...
The growth in residential real estate investment internationally since 2008 has led to an explosion of research on residential investment, across economics, sociology, housing and urban studies, geography and planning. But there remains an underlying question of what exactly is meant when we talk about ‘residential investment’. This paper analyses the way that ‘residential investment’ is used as an analytical category within different theoretical approaches to mean slightly different things, with different implications for policymakers. Further to this, we show how these different conceptualisations of investment are related to one another, in the case of the UK. The paper uses empirical material drawn from archive research on the development of the UK housing system to reflect on the vast literature on financing, financialising and investing in residential real estate. This paper makes two key contributions. Theoretically, it clarifies and questions the conceptual divisions created between different forms of residential investment. Methodologically, we demonstrate the benefits of a historical approach, which we argue reveals the path dependent nature of residential investment processes and practices.
... In the perspective of the reviews already proposed (Aalbers, 2017;, it is important to bear in mind the massive investment made in recent years by the financial industry in the land and property sectors. Two major series of works have been carried out in these directions: on the extension of real estate mortgage mechanisms (Aalbers, 2012) and on the strategies of international financial investors to directly exploit land rent and industrial profits, either by entering into the capital of large construction companies (Romainville, 2017;Shimbo, 2019), or by creating real estate-financial funds that act as real operators in the world's major metropolises (David & Halbert, 2014;Guironnet et al., 2016;Sanfelici & Halbert, 2019). ...
... In France, a standard profile of large developers was also consolidated in the 2000s, due to both mergers and acquisitions and the change in its shareholders (Pollard, 2018). In the case of Belgium, publicly-traded developers are considered to be "financialised" because they connect with investors from around the world, as national and regional exchanges are globally interconnected (Romainville, 2017). The companies listed on the stock exchanges can be considered as "financialised" by some authors because the expected gains are not only related to the profits generated by the productive activities (but also includes financial gains), and a large part of the assets traded in the capital market is in the hands of institutional investors (Aalbers, 2016). ...
This article examines the emergence of large-scale real estate developers in the Minha Casa, Minha Vida [My House, My Life] housing programme launched in 2009 by the Lula government and their repositioning caused by the economic crisis that hit the country five years later. Their development, based on a systematic use of financial valuations in their governance, strongly connected with international investor requirements, enables us to defend an extended notion of financialisation of housing policies, characterised by the colonisation of managers’ activities by financial metrics. The question of trust in financial numbers is essential when splitting the sector into two groups that occurred with the crisis: some developers worked even closer to investors, while others substantiated public economic power, balancing investors’ demands. The argument is that the entanglements between the circulation of financialised valuations in professional activities of private agents gradually transformed the structure of housing provision itself.
... Also, the regional development company, responsible for economic expansion and urban revitalisation, started developing subsidised homeownership in mixed-use projects for middle classes in deprived neighbourhoods. Nowadays, homeownership and the PRS are the two principal tenure forms in the context of fast-increasing housing prices, which can be related to incentives to homeownership (e.g., low mortgage rates), the growth of a foreign class with a higher ability to pay and rising financialisation (Romainville, 2017). ...
... In Brussels, the regional development company has had an entrepreneurial role in live-work development, which illustrates the public sector's growing capacity to intervene actively in planning. Nevertheless, this actor systematically works with private developers and investors in public-private partnerships (PPP), consistently with private companies' dominant role in new housing production (Romainville, 2017). ...
This paper examines the impact of institutional frameworks on ontologies of ‘live-work mix’, i.e., the renewed intertwining of residential and economic uses in urban developments. We aim to understand how local housing and planning regimes influence the nature of live-work mix by comparing three contrasting institutional frameworks (Amsterdam, Brussels, Stockholm), using an institutionalist approach to governance drawing on the concept of path dependency. We address two research questions: how have each city’s housing and planning regimes influenced current urban development strategies, and what ontologies of live-work mix do these regimes and strategies underlie. Based on a literature review, document analysis and exploratory interviews, we show that live-work goals are defined in instruments underpinned by different discourses and early planning directions, but in which housing supply is instrumental to economic growth. Market parties play an essential role in implementing these goals as a result of critical junctures and dependencies affecting the actors involved and their governance capacity. Overall, the local ontologies of live-work mix reflect broader city understandings and are either consistently oriented towards attractiveness or, on the contrary, overlapping between, sometimes, antagonistic agendas. Used sensitively, our analytical framework appears to be relevant to understanding the local mitigation of global developments.
... In a special report, even the UN (2017) warned about the entry of real-estate investment trusts or asset managers like Blackstone into urban markets and the broader negative consequences of (2017) describes; it does not only refer simply to rising mortgage volumes and house prices per se but to the growing predominance of financial considerations in the provision of housing by non-financial firms in the housing market (financialization of and within non-financial firms), by the state (financialization of the state) and by private households (financialization of households). A growing literature has shown, for instance, how financial firms can become the most important players in construction markets (Romainville, 2017), how private developers have taken over the provision process from public institutions (Topalov, 1974;Pollard, 2009;Aalbers, 2016), albeit not everywhere (van Loon, 2016), and how private households and their homes were increasingly governed by exchange-value rather than by use-value considerations (Alexandri and Janoschka, 2018). Overall, there have been few works in this housing financialization literature that deal explicitly with the supply side and housing construction, though there are notable exceptions (Sanfelici and Halbert, 2016;Romainville, 2017). ...
... A growing literature has shown, for instance, how financial firms can become the most important players in construction markets (Romainville, 2017), how private developers have taken over the provision process from public institutions (Topalov, 1974;Pollard, 2009;Aalbers, 2016), albeit not everywhere (van Loon, 2016), and how private households and their homes were increasingly governed by exchange-value rather than by use-value considerations (Alexandri and Janoschka, 2018). Overall, there have been few works in this housing financialization literature that deal explicitly with the supply side and housing construction, though there are notable exceptions (Sanfelici and Halbert, 2016;Romainville, 2017). This paper is intended to fill the gap left by the two strands of literature. ...
This article argues that the explosion of mortgage finance has not led to a proportional expansion of housing supply across 17 countries in a historical perspective (1913-2016). Based on a collection of housing construction data, it shows that the co-cyclical behavior of construction, prices and mortgage credit has been followed by a decoupling of house-price mortgage spirals from the underlying stagnating or declining construction activity since the 1980s. Mortgage debt is nonlinearly associated with new construction: positive up to a threshold, negative thereafter. The article argues that the increasing use of housing as an asset, or housing financialization, can explain why mortgages grow without construction, i.e. through privatization of state housing and supply restrictions as a result of rentier strategies of housing-market insiders and private developers. Private mortgage markets have thus been a less reliable policy alternative to traditional state-led housing construction policies. The article confirms for housing what has previously been found for growth or capital formation: beyond a certain threshold, there is a curse of too much finance.
... Já a segunda vertente se concentrou especialmente na difusão geográfica da securitização hipotecária, e o papel do Estado em seu impulsionamento (Gotham, 2006(Gotham, , 2012Soederberg, 2015). O terceiro conjunto de trabalhos vem discutindo a financeirização no mercado de aluguel de moradias (Fields, 2015(Fields, , 2018Aalbers, 2016), e um quarto grupo tem olhado justamente para a financeirização das empresas que produzem habitações Romainville, 2017). ...
As transformações gerais do capitalismo nos últimos cinquenta anos e as implicações do domínio das finanças nos processos produtivos têm sido objeto de importantes reflexões no debate acadêmico. No âmbito da produção do espaço,
diversos estudos têm apontado que essas mudanças na produção imobiliária e de infraestruturas articularam profunda reorganização dos setores empresariais atuantes nessas atividades. Embora seja cada vez mais visível e relevante a ação de
Grandes Grupos Econômicos “nacionais” na produção do espaço, os estudos urbanos têm dado pouca relevância a essa problemática e suas implicações no desenvolvimento de nossas cidades. O conjunto de trabalhos aqui reunidos busca
preencher essa lacuna, procurando contribuir para a discussão da financeirização e metropolização do espaço, evidenciando aspectos particulares do avanço desses processos no contexto brasileiro.
... Our data indicates that BTR supports a greater variety of return strategies and risk appetites as investors can select their investment point within the development Table 2. Professionally managed funds engaged in real estate finance or development, GM city-regional centre (2012)(2013)(2014)(2015)(2016)(2017)(2018)(2019)(2020) cycle (Table 3). BTS investment is heavily concentrated in the development stage, as other studies of BTS have shown (Romainville, 2017). 6 Investment in BTR, in contrast, is more varied, and goes beyond the simple supply of loans or the development of a scheme by a listed real estate fund. ...
Over the last decade, Greater Manchester's city-regional centre has become an important site for build to rent (BTR) housing development in the UK. The growth of this new tenure raises important empirical and conceptual questions about how far and through what means BTR has extended in post-industrial cities like Manchester, as well as how to theorise the global–local relations involved in BTR development. Drawing on a self-built database of 155 development projects incorporating 45,069 new housing units, we show that new-build BTR units have outpaced ‘build to sell’ (BTS) units almost two to one in Manchester's city-regional centre since 2012. We also found stronger international investment in BTR relative to BTS, illustrating BTR's more globalised and financialised form. Our paper understands BTR growth in Manchester as the outcome of a transcalar territorial network – an assemblage of national policy objectives, local state actors’ urban regeneration activity and heterogenous global investor groups with different priorities all seeking a return. We highlight the important role of national and local state subsidies and local authority joint ventures in constructing a territory conducive for BTR investment in Manchester. We also show how the fungibility of BTR assets as a ‘networked product’ widens the investment appeal of the tenure type, broadening and deepening housing financialization.
... 55 Such policies, especially the cuts of municipal services, may pose a threat of urban decay 56 and be visualised as a gun pointed at tenants, who often face harassment during urban renewal projects. 57 As to the legal framework at the local level, regional governments and municipalities are reported to introduce administrative decisions to relax building regulations within urban renewal projects. 58 One of the most essential instruments that local governments possess is the authority to increase the floor-to-area and building-coverage ratios in the zoning lots, which can be used to attract investment by promising an opportunity to close the rent-gap and thus gain profit. ...
The human rights obligations of states stemming from the right to housing may include dealing with urban problems and improving the infrastructures of slum neighbourhoods. Where such difficulties cannot be easily resolved by a building-by-building approach, urban renewal may be seen almost as a panacea. However, reminiscent of Swiss knives, urban renewal policies may be implemented to achieve many different socio-economic purposes unrelated to urban challenges which may violate the right to housing in the era of financialisation. Based on this dilemma, this article illuminates the challenges that may be posed by urban renewal policies to the right to housing considering the standards set by human rights monitoring bodies through a comparative interpretative method and proposes four urban renewal principles within the scope of human rights law. The article ends with recommendations on the ways to activate human rights protection in the context of financialised urban renewal policies.
... Consumer harms for owner-occupiers through the supply-side of housing have attracted less attention (Johnston and Reid 2019), reflecting the difficulty of tracing the nature and extent of financialisation in build-to-sell housing markets. Wading through building permit and company data in Brussels, Romainville (2017) showed that even in a housing market dominated by build-to-sell properties, a significant proportion of housing was produced by real estate subsidiaries created by financial companies, and vice versa. However, while supply-side analysis reveals the influence of the finance sector in centralizing risk and calculable probabilities in housing production (Sanfelici and Halbert 2016), literature on the financialisation of owner-occupied housing rarely considers high-rise residential development independently of detached dwellings. ...
This article focuses on the predicament of owner-occupiers and small investors presently liable for the removal of combustible cladding on build-to-sell residential high-rise. We argue that while the proliferation of combustible materials has been shaped by cost- cutting and risk-shifting by construction firms, these practices did not on their own transfer the responsibility of remediation to consumers. Examining the attempts of one densifying nation, Australia, to locate responsibility for combustible cladding through two parliamentary inquiries, we analyse witness testimonies to show how public policies encouraged materials substitution, removed on-site inspection and protected corporations from litigation. Moving beyond neoliberalism, these policy reforms leveraged information asymmetries and the material complexity of residential high-rise to create a climate of “imperceptibility” towards unsafe materials. Together, material, financial and policy dimensions intersected to enable capital accumulation through the expansion of consumer harm in high-rise housing markets. We conclude that construction materials and processes are an overlooked, yet critical domain of governance in financialised housing regimes.
... Neste sentido, no caso da incorporação, as empresas cotadas na Bolsa de Valores podem ser consideradas "financeirizadas" tendo em vista que os ganhos esperados não são apenas relacionados aos lucros gerados pelas atividades produtivas e que uma grande parte dos ativos comercializados no mercado de capitais está nas mãos de investidores institucionais. No caso da Bélgica, os incorporadores de capital aberto são considerados atores intermediários na produção de habitação em Bruxelas e estabelecem a ligação com investidores do mundo inteiro na medida em que as bolsas nacionais e regionais são interconectadas (ROMAINVILLE, 2017). ...
... All other types of data sources are used by fewer than 10 papers. Corporate datasets are rarely found, with exceptions including the use of Amadeus (Romainville, 2017), Bloomberg (Bassens et al., 2013), Bankscope (Karreman, 2009), Dealogic (Wójcik et al., 2018), Thomson (Dupuy et al., 2010), Orbis (Galaz et al., 2018) and Preqin (Knight and Sharma, 2016;O'Neill, 2019). Access, while expensive, cannot be a sufficient excuse, given that dozens, if not hundreds of universities globally subscribe to such sources. ...
I review research strategies, designs, methods and data in financial geography, by focussing on 449 articles published in 2001–2020. The analysis shows considerable methodological diversity and originality, contributing to geography and studies of finance. Over time, qualitative strategies, case study design and interviews as a method and data source are growing, while quantitative strategy, longitudinal design, regression methods and the use of government data are declining. The analysis helps identify gaps, opportunities and challenges, including the need for more methodological transparency, more in-depth qualitative and quantitative approaches supporting causal analysis, and a more ambitious historical and geographical scope.
... Most existing REITs do not own homes at all, instead holding office and retail space, industrial infrastructure, healthcare facilities, mobile phone towers, and even data centers and timberlands. Belgium, for example, has the second-oldest REIT structure in Europe, and non-residential REITs own about half of all office space in Brussels -but less than 1% of housing (Romainville 2017;Marzuki and Newell 2019). ...
This paper has two purposes: the first is to offer an empirical account of how rented homes have become more entangled in financial markets over the past two decades, particularly through the advent of real estate investment trusts (REITs) and listed real estate operating companies (REOCs). The second is to assess whether conceptualizing this as a process of “rental housing financialization” — distinct from but connected to the broader concepts of “housing financialization” and “financialization” — offers value to the scholarly community.
... Despite demographic growth, outmigration-related to the shortage of affordable, good-quality housing for low-and middle-income groups-remains an issue (Casier, 2019;De Laet, 2018). Homeownership (45% of the housing stock) and the private-rented sector are substantial, but public and regulated housing is scarce, representing less than 10% of the housing stock (De Decker, 2008;Dessouroux et al., 2016;Romainville, 2017). To tackle this problem, the regional development company (Citydev) offers subsidised homeownership for middle-income households, implemented through publicprivate partnerships. ...
This paper addresses the governance of the ‘live-work mix’. This concept refers to the renewed intertwining of living and working activities in new housing and urban development in the context of welfare state restructuring, development of the knowledge economy and globalisation. Implementing live-work goals can be difficult because a consensus between public and private actors is usually needed to develop such projects. In this paper, we examine the actors and instruments that assist in the implementation of live-work goals in targeted areas. We survey live-work development by analysing three illustrative projects in Brussels and Amsterdam, cities with comparable strategies but distinct planning systems. Our results indicate that state support is essential to enhance live-work mix, especially because the market remains reluctant to mix functions and focuses primarily on housing development. Flexible and tailor-made instruments are used, sometimes co-authored by public and private actors, to reach consensus. These instruments illustrate variants of strategic planning. Despite a shared interest in attracting target groups to redevelopment areas, the consensus-building process is affected by dis- crepancies in the nature of live-work mix.
... The fact that few studies have been undertaken of processes for raising and distributing capital in housing production has been pointed out by Alice Romainville (2017). In her research, Romainville studied the granting of building permits in Brussels during the 2000s to show, inter alia, how the share of financial capital in housing production has increased, so that two-thirds of active developers had a connection to an economic sector other than real estate. ...
This paper examines trends in the operation and financial performance of major UK housebuilders shortly before, during and after the global financial crisis (GFC) in 2008. It outlines two contrasting explanations of what has happened in the sector over this period. The first is described as an ‘institutional recovery’ perspective, in which a period of initial retrenchment after the crash was followed by steady reinvestment, and then a cautious move back to growth by the major housebuilding companies. This is set against what we describe as a ‘financialised recovery’ perspective. This explanation stems from our own analysis of the annual accounts of major UK housebuilders since 2005. It reveals the impact of the intensive financialisation of a sector initially weakened by the GFC, but where the strategic primacy of maximising shareholder value has been asserted more strongly than before. Our analysis of dividend payments post-GFC reveals this in the starkest of terms. We suggest that the sector has been in more robust financial health than implied by the ‘institutional recovery’ narrative, but that significant value is being extracted out of these companies, and indeed the sector overall, by institutional investors. The analysis provides unique insights into the financialisation of housing production, an issue which to date has received only limited attention. We reflect on the implications of identified trends for housing supply in the UK. We also sketch future research possibilities to examine the ongoing impact of intensive financialisation and the capital flows into, and out of, major housebuilders.
... Considerando o produto imobiliário (em seus diferentes usos: comercial, residencial, escritório, industrial, logística) como um divisor de águas, poderíamos dizer que o processo de financeirização 'à montante' estaria relacionado à dimensão da produção, ou seja, da oferta, desses produtos e que 'à jusante' residiria a dimensão do consumo, ou da demanda, desses mesmos produtos. Em relação ao primeiro, a entrada de investidores institucionais no setor imobiliário comercial e de escritórios alterou as relações e as práticas entre os atores históricos da produção urbana Weber, 2015), bem como a presença de acionistas internacionais decorrente da abertura de capital de diversos incorporadores imobiliários resultou em estruturas mais financeirizadas de produção da habitação (Aalbers, 2016;Romainville, 2017). Em relação ao segundo, a expansão das hipotecas após a crise de 2008 (Aalbers, 2012) e a aquisição de grandes imóveis corporativos por investidores institucionais (David & Halbert, 2013;Sanfelici & Halbert, 2019;Theurillat, Corpataux & Crevoisier, 2010; Van Loon & Aalbers, 2017;) alteraram os circuitos de financiamento, de valorização e de uso desses produtos, impondo, por um lado, um endividamento crescente no cotidiano das famílias e, de outro, novas lógicas de rendimento financeiro sobre o patrimônio imobiliário. ...
Las consultorías inmobiliarias internacionales actúan en la interfaz entre actores inmobiliarios y financieros y contribuyen significativamente a la expansión de la financiarización de la producción urbana en mercados considerados poco transparentes, pero prometedores para inversores institucionales. Se constituyen como fuentes de diseminación de nuevas prácticas de negocios en el sector inmobiliario, construyendo una regulación privada que permite la transparencia de los mercados en desarrollo y que hace el producto inmobiliario más legible para los inversores internacionales. A partir de una investigación cualitativa multimétodos con las principales consultorías inmobiliarias que actúan en São Paulo, identificamos que esa regulación utilizó tres instrumentos principales: métodos de evaluación financiera de inmuebles, estándares internacionales de contabilidad y estudios de mercado. Como consecuencia, las consultorías influenciaron las inversiones inmobiliarias de sus clientes (agentes inmobiliarios, pero también financieros e industriales), difundiendo una visión más estratégica y financiera sobre el valor del espacio urbano.
... Considerando o produto imobiliário (em seus diferentes usos: comercial, residencial, escritório, industrial, logística) como um divisor de águas, poderíamos dizer que o processo de financeirização 'à montante' estaria relacionado à dimensão da produção, ou seja, da oferta, desses produtos e que 'à jusante' residiria a dimensão do consumo, ou da demanda, desses mesmos produtos. Em relação ao primeiro, a entrada de investidores institucionais no setor imobiliário comercial e de escritórios alterou as relações e as práticas entre os atores históricos da produção urbana Weber, 2015), bem como a presença de acionistas internacionais decorrente da abertura de capital de diversos incorporadores imobiliários resultou em estruturas mais financeirizadas de produção da habitação (Aalbers, 2016;Romainville, 2017). Em relação ao segundo, a expansão das hipotecas após a crise de 2008 (Aalbers, 2012) e a aquisição de grandes imóveis corporativos por investidores institucionais (David & Halbert, 2013;Sanfelici & Halbert, 2019;Theurillat, Corpataux & Crevoisier, 2010; Van Loon & Aalbers, 2017;) alteraram os circuitos de financiamento, de valorização e de uso desses produtos, impondo, por um lado, um endividamento crescente no cotidiano das famílias e, de outro, novas lógicas de rendimento financeiro sobre o patrimônio imobiliário. ...
As consultorias imobiliárias internacionais atuam na interface entre atores imobiliários e financeiros e contribuem de modo significativo para a expansão da financeirização da produção urbana em mercados considerados pouco transparentes, mas promissores para investidores institucionais. Elas se constituem como fontes de disseminação de novas práticas de negócios no setor imobiliário, construindo uma regulação privada que permite a transparência de mercados em desenvolvimento e que torna o produto imobiliário mais legível para investidores internacionais. A par-tir de pesquisa qualitativa multi-métodos com as principais consultorias imobiliárias que atuam em São Paulo, identificamos que essa regulação utilizou três instrumentos principais: métodos financeiros de avaliação de imóveis, padrões internacionais de contabilidade e estudos de mercado. Como consequência, as consultorias influenciaram os investimentos imobiliários de seus clientes (atores imobiliários, mas também financeiros e industriais), difundindo uma visão mais estratégica e financeira sobre o valor do espaço urbano. palavras-chave | desenvolvimento urbano, mercado imobiliário, serviços financeiros.
... Gotham, 2009;Wainwright, 2009;Walks and Clifford, 2015). Later studies diverge from the onefold mortgage extensions to variegated forms, such as financial investors' upgrading of rental housing for profit extraction (Fields and Uffer, 2016), the utilisation of social housing as a collateral to raise credit for speculation (Aalbers et al., 2017) and the use of capital collected from financial activities for housing production (Romainville, 2017). In general, existing uses of financialisation in understanding the contemporary housing phenomenon mainly focus on concrete financialised behaviours. ...
While housing has been a central object of financialisation, questions regarding how multi-scalar states shape the financialisation of housing remain under-researched. I address this knowledge gap through a case study of the financialisation of affordable housing in Toronto. By analysing pertinent policy documents, I examine the roles and relationship of the federal, provincial and local states in the financialisation of affordable housing. Two findings are highlighted. (1) Although policies from all levels of government show traits of financialisation – in terms of both the connection between social policy and financial markets, and financialised ideologies prevailing in policy discourses, the extent and pattern of the manifestation of financialisation are distinct. This research thus calls for a nuanced understanding of the state’s role in the financialisation of housing from a multi-scalar perspective. (2) Affordable housing policies usually do not give an explicit definition of ‘affordable’. By scrutinising the policy specifications, I found that the target group is mainly moderate-income, rather than low-income, households. It will be increasingly difficult for low-income households to meet their housing needs.
... As concerns the production of the residential environment, there seem to be two main lines of engagement: the financialisation of property development and the actions of public landowners. Examples of work on property developers include Pollard (2009) that compares the development of housing production systems in France and Spain, van Loon (2016) that contrasts the financialisation of real estate development in the Netherlands to the 'patient capital' approach of Belgian developers and Romainville (2017), who provides a detailed study of the ways in which capital from other economic spheres enters the housing market through property development in Brussels. Other studies focus on the ways in which financialisation shapes the production of the built environment: Guironnet, Attuyer, and Halbert (2016) show how the expectations of investors for a large-scale redevelopment scheme constrained the local authority in its strategic plans for the area; Sanfelici and Halbert (2016) provide an account of the way in which the relation between investors and property developers in Brazil shapes the production of housing. ...
This article investigates the ways in which the structure of the private ownership of property affects the operation of land and housing markets. It draws on detailed Land Registry data to identify the types of actors found at the top of the property wealth distribution in Dudelange, Luxembourg, and to gauge their respective influence on the production of the residential environment. While the top tail is made up of property developers, landowners and super-landlords, an analysis of the planning and land assembly processes for six large scale residential developments in the city since the 1970s shows that the production of housing is driven by a small group of tightly interconnected private landowners and property developers. The level of property wealth concentration in a given territory is thus not innocuous – it affects the production of the residential environment, especially when multiple property ownership is interlinked with the concentrated control over residential land. The study complements discussions on the relation between property, wealth and the production of housing that focus on homeowners, small-scale private landlords and the super-rich (on the consumption side) and, on the production side, on selected actors such as financialised property developers and public landowners.
... § HOUSING COMMODIFICATION AMID STRUCTURAL CHANGES § 'Commodification' (Marcuse & Madden, 2016), 'Financialization' (Aalbers, 2008) § Real estate globalization > opportunistic funds, institutional investors (Nappi-Choulet, 2012;Theurillet et al., 2015) § Entrepreneurial state > support to speculative property investment and development (Landriscina, 2018) BRUSSELS Ref.: AFWC, 2016;Huisman, 2016;Nieboer & Gruis, 2016;OIS, 2017 Ref.: Observatoire des permis logement, 2011;2019;Dessouroux et al., 2016;PWC, 2019;Romainville, 2017 TENURE REGULATION They had a presentation about it, and, yeah, in the municipality, it was like: 'Well, this is actually what we need, the programme at least with the big amount of people, who are also going to move there with the station area, to hopefully make the station, make it feel more safety ...
Our working life has become increasingly flexible, so have our housing needs. The housing market has very well understood this paradigm shift and the private sector has started developing innovative housing concepts emphasizing new urban “live-work” lifestyles. In particular, housing developments delivering small dwellings with shared spaces and services for the residents have been supported by local governments. Such projects often target students and so-called “young professionals”, possibly with an intergenerational mix. Originally a niche market, the development of shared spaces and services as a compensation for small housing dwellings has become significant in global cities with a high market pressure. The latter is not only related to the concentration of small households and young, highly-skilled people in cities, but also to housing deregulation, increased labour flexibility, and land use policies oriented to urban densification and mixed-use development. Our purpose is to explore the processes behind this growing phenomenon in Amsterdam and Brussels, two cities creating a favorable context for live-work mix developments. Our objective is to understand the influence of each local context on the governance and further outcomes of these developments. Consequently, the research questions addressed in both cities are: which coalitions of actors develop housing with shared spaces and services, what are the mechanisms influencing affordability and quality outcomes, and is there a need for further regulation of this housing segment? Through the discussion of exemplary developments completed in both cities, we discuss the difficult balance between affordability and quality as opposed to profitability and quantity. We finally stress our concern regarding the risk of self-segregation (irrespective of a defined target public) and ever smaller housing units.
... Zum anderen ist aber auch ein darauf differenziertes Angebot sowie eine andere Akteursstruktur bei Projektentwicklung, Bau und Vertrieb offenkundig (vgl. Romainville, 2017). ...
The housing question is a topic of increasing concern in a
number of European cities. Rising housing costs burden many households.
Since the outbreak of the global economic crisis in 2008, housing has
increasingly come under spotlight of investors. Institutional and private
actors invest in real estate not only in metropolitan areas but also in
middle and small-sized towns. Tourism-induced demand increases the pressure
on housing markets particularly in tourist-dominated cities. The
manifestation of these processes varies on a small scale and is influenced
by regional-local planning and politics. Based on the example of the city of Salzburg, the article shows that the housing question manifests itself
strongly aside metropolises as well. Financial investments by private and
institutional actors in real estate and different forms of tourism demand
exacerbate the housing shortage. By linking the discussions about the
effects of (mass-)tourism and financial investments on regional housing
markets, this paper provides additional insights. The additional demand for
(residential) space by tourism is used to increase or secure the return on
investments in real estate. Financial investments in housing offer
additional (problematic) potential for tourist use, such as short-term
rentals. Owners benefit from both processes. Due to the prevalent power
relations, planning and politics have little to counter the current
challenges.
... Much of the commentary on financialisation has been focused on the role of the US economy (e.g., Gotham, 2009;Krippner, 2004) whilst other studies have analysed the impact of financialisation in Italy (Di Feliciantonio, 2017), Spain (Palomera, 2014), Eastern Europe (Posfai, Gal, & Nagy, 2018), Canada (Walks & Clifford, 2015), Brazil (Klink & Denaldi, 2014;Pereira, 2017), Hong Kong (Smart & Lee, 2009) or Colombia (Zapata, 2018). Wainwright (2015) has analysed securitisation practices in France, Italy and Spain, whilst Romainville's (2017) study of Belgium considered the extent to which investment in housing projects have been capitalised and how political institutions can soften some of the more problematic effects of financialisation. There have been a number of articles on the German example (Bernt, Colini, & F€ orste, 2017;Wijburg & Aalbers, 2017) including Wijburg et al.'s (2018) reflection on the effects of stagnation in the early mid 2000s and the legacy of unification and privatisation policies. ...
This paper interrogates the concept of financialisation and assesses its utility for housing scholarship. It begins by noting the elasticity of the concept and considers some of the criticisms made against its deployment. The main body of the paper, using the UK as an example, puts forward suggestions to operationalise the concept across three scales: structural (to analyse the governance of housing); institutional (to explain formal and informal processes, including the behaviour of housing organisations) and individual (to understand the ways that financialisation is imposed but also resisted within social settings). Amongst the arguments presented is that the concept has most utility for researchers when applied historically, to make explicit how the variegated, situational and adaptive practices that are now in place have their origins in earlier stages of capitalist development. The paper concludes by suggesting that financialisation is most productive when applied alongside, rather than in place of concepts such as neoliberalism and commodification.
... As recent research highlights, the capital used in major urban development projects may increasingly be classified as 'financial capital', reflecting the degree to which housing production itself has become financialised. Examining housing production in Brussels, Romainville (2017) for instance highlights how 'financialized developers' invest capital accumulated through financial activity in ways that evidence a growing 'blurring between financial and non financial sectors' (also Paris: Guironnet, Attuyer, and Halbert 2016). ...
Taller, denser and more diverse city skylines are a hallmark of 21st century urban change. Although vertical urbanisation is increasingly ubiquitous, this development has not followed a single universal pattern. It is not uniform in its scale, its target neighourhood types, nor in its design, which spans ‘starchitect’-designed skyscrapers and generic tower blocks. Urban scholars have traditionally considered vertical development via less specific concepts such as intensification, and only recently has the expression ‘vertical urbanisation’ risen in prominence. There remains however a lack of integration and theorisation of vertical expansion across social science debate. This siloing of diverse perspectives encourages isolated accounts and hinders shared understandings around the processes it entails. Yet interest lies not only in examining the specifics of each new local crop of towers, but also in explaining the process of vertical expansion itself as performative and constitutive of shifting social relations. Equally, integrating distinct local, historical, and institutional trajectories within robust theoretical schema can enhance understandings of vertical expansion in particular times and places. This paper steps towards these ambitions by conceptualising residential vertical urbanisation as a special kind of spatial fix. Using intertextual theorisation and drawing upon Aalbers and Christophers’ recent theorisation of housing’s functions under capitalist political economy, this article positions residential high-rise development within the circuitry of capitalist accumulation. In particular, and independently of national or local specifics, it develops an exploratory conceptual schema for high-rise housing development based on its three interrelated functions as: labour and capital intensive commodities; as investments on real estate markets tied to financial markets; and as cultural artefacts of distinction both in inter city competition and geopolitics, and in class relations. The proposed theorisation does not explain vertical expansion in every case, indeed it emphasises the importance of interrogating the role of intermediaries, states, and local opportunity structures in understanding the local contours of vertical expansion. Nonetheless, by providing a theoretically informed heuristic that is sensitive to temporal and geographic contingencies, and into which specific occurrences of vertical expansion can be embedded, this framework offers to promote communication between these occurrences as related yet locally contingent phenomena of financialised capitalism.
... Although the majority of cf belongs to credit for non-GDP transactions, the real estate holding companies included within the scope of cf not only engage in selling existing properties but also involve in property leasing services. Furthermore, the holding companies can also engage in housing development acting as owners of their investment projects (Romainville 2017). Thus, an increase in cf raises credit to the supply of existing properties and credit to other asset markets, both of which have no direct contribution to economic growth. ...
... In his analysis of such New State Spaces, Brenner (2004, p. 219) identifies mega-projects an outlet for the rescaling of state space during neoliberalization, serving "as an institutional mechanism through which national, regional, and local states channel public funds into strategically located, marketoriented development initiatives." The use of mega-projects to facilitate entrepreneurial urban governance has been widely documented on topics as diverse as mega-event planning (Gold & Gold, 2008), waterfront development (Doucet, 2013), sustainability planning (Theurillat & Crevoisier, 2014), austerity urbanism (Enright, 2014), and the financialization of public assets (Romainville, 2017). ...
This paper reviews recent research on mega‐urbanization, showing that it is an increasingly common form of urban growth. This includes research on the spatial expansion of cities through mega‐scale urban agglomerations like mega‐cities and mega‐regions; it also includes research on the intensification of urban land use through mega‐projects. The paper outlines strategies for researching the geographies of mega‐urbanization, based on recent research in urban studies. Empirically, urban researchers are treating mega‐urbanization as an increasingly ordinary part of everyday urban life. Methodologically, urban researchers are adopting longitudinal approaches for assessing the complex temporalities of mega‐projects and for evaluating gaps between planning promises and planning outcomes. Theoretically, urban research is taking a pragmatic approach to mega‐urbanization, viewing it critically but also aiming to constructively intervene in mega‐project planning.
... However, where in the past cheap land and relax planning regulation spurred this model increased land scarcity and stricter planning rules has put pressure on this housing model due to rising land costs. Increasing residential real estate prices has been further spurred by an increased willingness of banks that started securitisation programmes to borrow, low interest rates and policy changes making interest rates partly deducible, making housing less affordable and giving rise to more urban forms or residential real estate (Damen et al., 2014;Winters and van den Broeck, 2016;Romainville, 2017). This makes it quite likely that especially among first time home buyers and in specific, more expensive, urban areas processes of financialization could be observed, for instance exemplified through high loan-to-values. ...
A quantitative screening shows that since the 1990s the financial assets and liabilities of important actors of the Belgian political economy have grown considerably. Whereas in other countries this growth of the financial sphere has been related to a transformation in capitalism in which 'finance' becomes dominant - i.e., the rise of financialized capitalism - Belgian scholarship on 'financialization' is scarce. Therefore, this paper offers a first exploration on the ways in which financialization could be observable in Belgium and consequently could be reshaping its economic geography. Accordingly, the paper offers both an introduction on financialization in Belgium and inspiration for debate and further research for geographers studying (elements of) the contemporary economic geography of Belgium.
Urban financialization refers to a range of financialization processes in and of the city, including the financialization of housing and other forms of real estate, the financialization of urban governance and local governments, and the financialization of large urban projects, including megaprojects. The absorption of capital by real estate is one of the defining characteristics of the current financialized, real estate‐driven mode of accumulation. The debt‐led accumulation regime, which underpins the financialization of real estate, producing tradable financial assets, feeding financial markets on the one hand and supporting private consumption on the other, is clearly not a formula for stability. The state is far from absent in the process of creating variegated patterns of urban financialization and brings the architecture of financial markets inside the organization. The government is transformed through finance, but also uses finance to extend state power.
Problem, research strategy, and findings
The financialization of housing is a rapidly growing concern for planning researchers and policymakers, but the opacity of property ownership in most cities has hampered efforts to rigorously measure the phenomenon. Here we introduce a new approach based on big data methods. By combining web scraping of property assessment, business registry, and rental advertisement data, we reliably identified the networks of property ownership lurking behind anonymous numbered companies and established the extent of financialized rental housing ownership. We demonstrate the effectiveness of this approach with a quantitative case study of the financialization of rental housing in Montreal (Canada). Using spatial regression and clustering analyses, we found that there are two distinct types of financialized rental housing ownership in Montreal: one characterized by precarious and student tenants and another characterized by affluent tenants. In general, high proportions of financialized ownership are associated with higher levels of housing stress and dense housing typologies.
Takeaway for practice
By demonstrating meaningful differences in housing market outcomes across financialization status—which has not usually been readily accessible to either renters or planners—our findings show the importance of rental market information asymmetry. Planners should treat landlord data as one component of the information necessary to properly regulate a rental housing market. Municipalities should make property ownership information publicly accessible to facilitate public scrutiny of residential land use and more effective protection of tenant rights.
Over the last two decades, real estate developers have become key players in the housing sector in France. This evolution has several dimensions: developers’ share of the housing construction market has increased, their geographical areas of intervention have expanded and their weight in social housing construction has soared. Since privatization and financialization are not adequate frameworks to account for the rise of these actors in the French housing context, other explanations are here explored. This article shows that the rise of real estate developers is mostly the result of changes led by national and local governments to gain capacity for action in a constrained budgetary context. More precisely, it investigates two policy instruments that have favored the developers’ expansion. First, tax expenditures for rental investment and, second, VEFA-HLM – a regulatory tool enabling the construction of social housing by real estate developers. Both instruments seek to enroll real estate developers in implementation, while political actors try to maintain control over decisions, and more broadly over the main orientations of housing policies. This article thus contributes to analyzing how, i.e. by which instruments, public actors can foster the rise of private economic actors in the development of urban policies.
Against the background of price increases on the one hand and strong tenement regulations in Vienna’s historic housing stock on the other, this article analyses the actors and strategies of commodification. Following a mixed-methods approach, this case study analyses 90 historic tenement buildings in nine neighbourhoods. Our analysis reveals the increasing relevance of institutional actors as (co-)owners, which goes hand in hand with declining holding periods. As local actors are highly diverse, we have identified five types of actors and four commodification strategies, pointing towards a spatially differentiated division of labour. This actor constellation, dominated by micro actors, suggests that the specific situation and regulation of a market brings different types of actors to the fore. Most of the identified actors, and particularly the funding of their projects, have no relation to financial markets and sources; from this perspective, the concept of commodification provides greater insight into the dynamic of this specific housing market segment than the lens of financialisation does.
The rise of purpose-built student accommodation (PBSA) has become a dominant feature of many secondary cities over the last decade. These cities often have weaker property markets than ‘primary’ or capital cities and often rely on the ‘knowledge economy’ to drive economic and urban development. A growing body of work has explored the effects of ‘new-build studentification’ and its relationship to economic crisis and the financialisation of housing. Less attention has been paid to how the localised political and economic impacts of austerity led to the creation of particular planning policies and actions to facilitate PBSA. Through a case study of a housing estate in Newcastle upon Tyne, UK, whose ward has seen a 467% increase in student housing numbers, this article highlights that student housing is shaped not merely by issues of supply and demand but also often by planning practice and local economic demands. Whilst we recognise that PBSA development is also reliant on particular global economic conditions and investment strategies, this article calls for a more relational, contextual approach to examining PBSA. We pay specific attention to local political and institutional actors and their policies, working practices and social constructs amidst austerity.
Der Wohnungsneubau hat sich in Wien in den letzten Jahren sehr dynamisch entwickelt. Die vorliegende Studie untersucht den Neubau der Jahre 2018-2021 entlang ausgewählter Dimensionen. Dies umfasst die räumliche Verteilung, die Rechtsform, das Verhältnis von gefördertem und freifinanziertem Neubau, die Bauträger, die Preise und Mieten, die Rolle von Vorsorgewohnungen, die Käufer (sowohl bezüglich natürlicher, juristischer Personen als auch von Investoren), sowie die Bedeutung von Leerstand.
Bislang wurde das verstärkte Aufkommen von Finanzanlagen
auf Wohnungsmärkten vorwiegend in Metropolen oder auf
nationaler Ebene untersucht. Der Fokus lag dabei zumeist auf
institutionellen Akteuren. Die Untersuchung von Finanzanlagen
in Wohnraum in Städten unterhalb der Metropolebene
und durch Privatpersonen wurde bislang vernachlässigt. In
vorliegender Untersuchung stelle ich deshalb die Manifestation
von Finanzanlagen auf den Wohnungsmärkten in einer
Stadt abseits der Metropolebene in den Mittelpunkt und setze
dabei auf einen Mixed-methods-Ansatz aus quantitativer
Grundbuch- und Datenanalyse sowie qualitativen Experteninterviews.
Der Beitrag zeigt auf, dass abseits der Metropolen
die Nutzung von Wohnraum in ein Investitionsobjekt vorwiegend
von privaten Akteuren vollzogen wird. Diese investieren
weniger aus Spekulation und in Erwartung von Wertsteigerung,
sondern zur privaten und familiären Vorsorge und vor
allem zur Wertsicherung. Auch diese Form von Finanzanlagen
in Wohnraum hat folgenschwere Auswirkungen auf andere
Marktakteure. Der gesamte Wohnungsmarkt richtet sich sukzessive
auf diesen neuen Investorentypus aus. Immobilien
sind somit zunehmend zu einer Anlageform von Vielen geworden.
While credit plays an instrumental role in housing price dynamics, existing work has produced conflicting evidence of its real impact. This paper reconciles various inconclusive findings via a disaggregation strategy to decompose aggregate credit into credit-to-the-real economy (cr) and credit-to-the-asset markets (cf ). We argue that these two credit components exert theoretically expected and distinct impacts on housing prices, identified separately through a housing demand and a housing supply credit-circulation channel. Using an international panel dataset and treating for periodic cycles, our panel VAR estimations show that cr and housing prices depict a mutually reinforcing positive relationship. However, cf exerts a negative but negligible impact on housing prices in the short-run; it has a strong and positive effect in the long-run. Further, controlling for effects of economic policy uncertainty strengthens the interactions between housing prices and the two credit components. Our results are robust and suggest that close monitoring of credit allocation to housing demand and supply sides, as well as the extent of pump-priming resource allocation to the real economy, should be of interest to policymakers.
This essay takes Engels’ The Housing Question as a provocation to (1) apply ground rent theory to housing (something which Engels neglected to do) and (2) investigate Engels’ conflation of housing struggles with the concerns of a “backwards” peasantry. I show that applying Marx’s ground rent theory to housing illuminates aspects of the housing question heretofore unexamined—in particular, the significance of the relationship between landowner and capitalist in housing. I then show that Engels’ dismissal of housing struggles and land-based struggles more broadly is rooted in the specious belief that proletarianization homogenizes people. Engels’ spurious logic nonetheless sets in relief an important connection: I suggest that only through grasping what Cedric Robinson has called racialization or differentiation and what Sylvia Wynter has named nonhomogeneity can we recognize the theoretical and practical centrality of housing and other land-based struggles to revolution and abolition.
Os agentes, as práticas e os instrumentos da produção do espaço urbano passaram por profundas alterações no Brasil no século XXI relacionadas à ascensão e à centralidade da propriedade imobiliária e do capital fictício no processo geral de acumulação de riquezas. Esta tese analisa dois agentes que participam dessa articulação entre setor imobiliário, construção civil e finanças e, consequentemente, da promoção do valor imobiliário nas cidades brasileiras: as incorporadoras de capital aberto e as consultorias imobiliárias. As principais operações promovidas por esses agentes foram a padronização e a hiper-gestão da produção e a difusão de instrumentos financeiros na promoção do valor imobiliário. Com essa estrutura, a construção e a avaliação de edifícios se transformaram em algo absolutamente legível, palatável e codificado tanto para a indústria de materiais de construção quanto para o mercado financeiro global, comandadas por homens (literalmente, diante da quase inexistência de mulheres em cargos de direção) que souberam lidar com os instrumentos financeiros e de gestão aplicados na produção e na valorização imobiliária. Além disso, em relação à produção habitacional, a dependência com os fundos públicos e com o Estado para o financiamento da demanda continuou sendo fundamental para que essa estrutura social se consolidasse mesmo num contexto de crise econômica e política, principalmente, após 2014. Esta tese compila os resultados de dez anos de pesquisas de abordagem qualitativa que recorreram a quatro estratégias metodológicas fundamentais e combinadas: pesquisa documental; análise de bases de dados primários e secundários; pesquisa de campo nas empresas estudadas (com entrevistas e observação) e análise de projetos urbanísticos e arquitetônicos. Se as estruturas de provisão do ambiente construído e da habitação no Brasil se alteraram em nome de uma maior aproximação com as finanças (de seus agentes e instrumentos), elas foram incapazes de atender adequadamente as necessidades habitacionais e da vida urbana e geraram aumento de preços e processos de espoliação.
A new literature on housing and financialization has emerged in recent years, but scholars have yet to examine how political actors shape national trajectories of housing financialization. In this article, we address this shortcoming by examining the cases of Russia and Poland in the 1990-2018 period. We argue that in both contexts political elites implemented a radical market-oriented reshaping of housing finance. However, by pursuing distinct statecraft strategies and modes of integrating the domestic economy into global markets, Russian and Polish political elites created two divergent trajectories of housing financialization. Russian political elites pursued patrimonial statecraft strategies and a mode of global economic integration based on raw material exports. The Putin administration channeled revenues from raw material exports into the securitization-based housing finance system and used this infrastructure as an instrument of hegemonic power. In doing so, the Russian government shielded homeowners from exposure to financial risk. In contrast, Polish political elites pursued liberal statecraft strategies and a mode of global economic integration based on foreign capital inflows. Polish political parties therefore enabled foreign banks to dominate the housing finance system and sell foreign currency mortgages, which exposed homeowners to considerable financial risk. In light of these findings we call for further research into the political factors that shape the process of housing financialization, both in the post-socialist space and beyond.
Financialization has become the go-to term for scholars grappling with the growth of finance. This Handbook offers the first comprehensive survey of the scholarship on financialization, connecting finance with changes in politics, technology, culture, society and the economy.
It takes stock of the diverse avenues of research that comprise financialization studies and the contributions they have made to understanding the changes in contemporary societies driven by the rise of finance. The chapters chart the field’s evolution from research describing and critiquing the manifestations of financialization towards scholarship that pinpoints the driving forces, mechanisms and boundaries of financialization.
Written for researchers and students not only in economics but from across the social sciences and the humanities, this book offers a decidedly global and pluri-disciplinary view on financialization for those who are looking to understand the changing face of finance and its consequences.
The post‐2001 financial crisis era in Turkey gave rise to twin booms in housing construction and credit markets, both of which suffered from the subsequent debt crisis. The financial transformation of the economy in conjunction with state‐led urban legislation reform had significant effects on the housing market in terms of commodification of housing, countrywide construction activities and substantial increases in household debt and construction company loans. The changing role and function of the state as a direct provider of housing can be regarded as actually existing neoliberalism providing favourable conditions for financialization, as it ushered in the commodification of housing. The Turkish government, together with the government‐backed housing agency, metropolitan municipalities and publicly owned real‐estate investment company, has been active in nationwide housing construction and urban regeneration projects. This article argues that there is a lack of synchrony between the commodification of housing and the financialization of the household sector owing to the institutional setting of the mortgage system and structural macroeconomic problems. Rather, housing commodification has been accompanied by the financialization of the corporate sector through a steep rise in the external debt burden of construction companies.
The burgeoning geographical literature on the financialisation of urban development has focused predominantly on the growing importance within this sphere of financial markets, motives, and institutions. This article starts from the observation that in examining such financialisation, scholars have paid insufficient attention to the details of the financial contexts within which it takes place. Through a consideration of certain high‐profile ongoing transformations in the property strategies of English local authorities, the article argues that we need to put urban financialisation – in this case, state‐led variants thereof – in its financial context: it needs to be understood as a response, at least in part, to specific financial conjunctures. After several decades of effective withdrawal, many local authorities have assumed a resurgent role in urban property ownership and development in recent years, and especially since the global financial crisis. This resurgence is apparent, albeit selectively, in regard to both commercial and residential property. On the one hand, local authorities have been rebuilding portfolios of investment (i.e., non‐operational) commercial property; on the other hand, they have been building new homes, typically not for social rent, through arms‐length housing companies. I argue that understanding these trends requires appreciation of local authorities’ particular financial circumstances in the “post‐crisis” era – their operation at the intersection of devolved austerity, reformed housing finance, and unconventional monetary policy – and of the constraints and opportunities that these circumstances shape. A conjunctural analysis of financialised, state‐led urban development initiatives in England in the period since the financial crisis.
Since the 1990s, the concept of governance has become an integral element of spatial planning research. In this article, we revisit some of the key contributions to the literature to discuss how and to what extent governance theory has informed planning theory so far and what the implications are for our understanding of how to construe planning practices. Next, we examine the current governance literature in order to identify promising elements that can further inform planning theory and practice. More specifically, we discuss relations between hybrid modes of governance in regard to cross-sectoral coordination of actors and institutions, and the implications of various forms of learning within governance networks. Finally, we suggest entry points for planning research such as studying the combination and interplay of various modes of governance to understand the inherent functioning of spatial planning assemblages, or investigating the learning capacity of actors and institutions in order to anticipate their adaptive capacity to respond to changing contexts in spatial planning practice. However, we also point out a few, yet troublesome implications. One of them is that planning understood as the governance of place might imply that the term “planning” as such becomes meaningless and that planning theory might turn into a subsection of (institutional) political theory. The article serves as a framing text for this special issue as it addresses a number of key elements and underlying concepts of the governance literature that are relevant for understanding the procedural dimension of spatial planning and which underpin some of the issues that are addressed in the more case study-based contributions by the other authors.
Geographers have started studying residential (housing) and commercial real estate (offices, retail, leisure) at the intersection of financial and urban geographies to understand how the built environment – chunky and spatially fixed – has been turned into a (quasi-)financial asset – ‘unitized’ and liquid – through a range of regulatory and socio-technical changes and constructions. The financialization of real estate is not limited to the rise in household debt, mortgage securitization and international investment in office markets, but increasingly also affects rental housing: private equity, hedge funds and REITs buy up large portfolios of social and private rented housing, while housing associations use derivatives and other financial instruments. This report surveys the most recent research on finance, real estate and housing.
There is a small but growing literature on the financialization of housing that demonstrates how housing is a central aspect of financialization. Despite the varied analyses of the financialization of housing and the importance of housing to financialization, the relations between housing and financialization remain under-researched and under-theorized. The financialization of housing is not really a specific form of financialization, transcending as it does a number of different forms of financialization. Housing systems, in particular, vary widely across the globe, which implies that housing financialization will be inherently variegated, path-dependent and uneven. In this introduction to the symposium, I will discuss how the articles to follow contribute to the literature on the financialization of housing. Housing has entered a post-Fordist, neoliberal and financialized regime. Increasingly, both mortgaged homeownership and subsidized rental housing are there to keep financial markets going, rather than being facilitated by those markets. There is little evidence that the global financial crisis has resulted in any de-financialization of housing. There are common trajectories within uneven and variegated financialization, rather than radically different and completely unrelated forms of housing financialization.
The financialization of housing has been increasingly identified as an important driver of social and economic change in contemporary capitalism. Focusing on the Brazilian context, this article considers the extent to which recent changes in housing regulations, policies and markets confirm or challenge narratives about the financialization of housing in the international academic debate. I argue that while many of the trends stressed in the literature are apparent, more extreme processes of financialization within the Brazilian housing sector remain limited––not only because of institutional and regulatory constraints, path dependence or political resistance, but also because of fundamental structural conditions of Brazil’s position as a peripheral economy. Three different but mutually reinforcing processes are scrutinized in order to evaluate the financialization of housing and its limits in Brazil: the re-regulation of the real estate financial sector initiated in the 1990s; the changing funding patterns among real estate companies since the mid-2000s; and the increasing commodification of housing induced by a large-scale and heavily subsidized housing program launched in 2009.
Why does a social housing provider bet on interest rate fluctuations? This article presents a case study of the financialization of both housing and the state. Social housing in the Netherlands is provided by non-profit housing associations that have since 1989 been set apart from the state. Many associations started developing housing for profit, borrowing on global capital markets or buying derivatives. Whereas other semi-public institutions moved into the world of finance due to financial constraints, housing associations did so to capitalize on the possibilities offered by their asset-rich portfolios. Vestia, the largest of them all, is an extreme––but not exceptional––case of what can happen when public goals are left to be realized by inadequately supervised and poorly managed private organizations. As a result of gambling on derivatives, Vestia had to be bailed out to the tune of over 2 billion euros. To recoup the losses, housing was sold off and rents were raised. Almost half of Dutch housing associations used derivatives, although most refrained from using them purely speculatively. The changes in the housing sector that led to its financialization cannot be separated from the wider financialization of the state.
Qui dirige l’économie ? Qui détient le pouvoir de décision dans ce domaine ? Quelles sont les limites de ce pouvoir ? Ce Dossier tente d’apporter des réponses à ces questions en passant en revue les différents acteurs intervenant dans la sphère économique, l’étendue de leur capacité d’influence et les modes d’exercice de leur pouvoir.
Parmi les acteurs économiques, les groupes d’entreprises, plus encore que les entreprises, représentent le pouvoir économique par excellence. Avec l’internationalisation et la financiarisation de l’économie, ils contribuent à accentuer la concentration des richesses. Par l’utilisation et l’affectation de leurs ressources, ils constituent par ailleurs des acteurs capables d’influencer la décision politique. Les rapports qu’ils entretiennent avec les États et leurs composantes deviennent manifestement de plus en plus déséquilibrés.
Outre l’intervention des pouvoirs publics dans l’économie, ce Dossier aborde d’autres acteurs (syndicats, associations de consommateurs, médias ou organisations militantes) qui, dans un rôle secondaire mais non négligeable, tentent de peser sur la décision des détenteurs du pouvoir économique.
What is the impact of the presence of European institutions on the real estate market in Brussels and its outskirts? Although the question may not be taboo, it is certainly an awkward one. If we blame the European Union for having too great an influence on the housing prices in Brussels, we risk being accused of populism (and insensitivity to the precious contribution made by the EU to the capital city). On the other hand, if we refuse to recognise any correlation, we are accused of being out of touch with reality. As regards the direct impact, this effect is both limited in geographic terms and confined to a certain segment of the built-up area. However, the concentration of EU staff in the affluent neighbourhoods of the capital and in the higher property categories does have indirect effects on the other sectors. As these prosperous areas gradually become financially inaccessible, the demand turns to slightly less exclusive areas – both nearby and further away – which, in turn, experience a rise in prices, and so on. Furthermore, the danger probably also lies in the gentrification caused by the Europeans despite themselves, as they settle in certain run-down neighbourhoods in the city centre. Needless to say, the issue is complex.
The ownership support policies implemented by the Brussels Region are intended for certain categories of household and target certain neighbourhoods in the centre of the first ring. Via the different measures which have been established, the Region channels private investment towards certain working-class neighbourhoods to which it would like to attract private developers and a more well-to-do population.The analysis shows that the tools intended for “middle-income” households are used mainly in the central neighbourhoods, in particular along the canal, whereas the measures intended for the most disadvantaged households cause migrations from the central areas towards the western part of the Region. Ownership support has enabled a significant improvement in the situation of many households, but until now has only been relatively successful. Locally, the population movements it causes may, however, have a considerable social impact, all the more so since part of the targeted neighbourhoods have already experienced gentrification phenomena and high rent increases.
The adoption of an International Development Plan (IDP) by the regional government at the end of 2007 marks a significant transition in urban policies in Brussels. This text seeks to highlight the essential options of the IDP and presents a critical analysis of it. In our view, the IDP indicates essentially the formalisation of a relatively new strategy in Brussels, aimed at the development of significant portions of the regional territory for the purposes of private real estate developments of a speculative character which are supposed to function as new levers in urban “revitalisation”. As such, the Brussels IDP is in keeping with a serious tendency towards the widespread use of urban policies of neoliberal inspiration, which encourage the rehabilitation of city centres without taking into account the effects they have on intensifying the city’s social and spatial divisions.
The sixth state reform has just made the Regions competent as regards the taxation of mortgage loans for one’s “own and sol” home. Commonly referred to as the “housing bonus”, this system benefits many taxpayers. It is nevertheless the object of criticism. This tax incentive – whose overall value amounts to tens of thousands of euros per person – is granted without income-related conditions. The richest also benefit, when they would have become homeowners without this help. At the same time, the disadvantaged households scarcely make use of it, simply because property prices are too prohibitive for them. This tax incentive raises prices by stimulating the demand, so that in the end it benefits sellers rather than buyers. Finally, the housing bonus (less advantageous by half in this case) discriminates against those who live alone. That just shows that, especially in a context of budgetary restrictions, it is important for the Regions to reconfigure the housing bonus, in particular in a more social sense. In future, this advantage could also be linked to healthiness or energy requirements, or be saved for first-time buyers.
This paper essentially argues that contemporary gentrification ought to be conceived of as a prevailing, though place-specific policy strategy. What is at stake is to move beyond common but limited representations of gentrification as a mere process of neighbourhood change through which urban space is dedicated to progressively more affluent users, and to specifically acknowledge the role of state actors in fostering this socio-spatial transformation. The paper mainly builds on findings brought out by selected - and still quite rare - works seeking to empirically document and make sense of the emergence or consolidation of a pro-gentrification coherence across changes in diverse policy fields (e.g. housing, tourism, culture, infrastructures, etc.). Findings brought out of analyses conducted in Paris, Roubaix and Antwerp are particularly scrutinized. They transversally suggest that following a pro-gentrification policy agenda practically means combining actions on demand and supply of gentrifying spaces together with the production of legitimating representations ; moreover, they stress that the arrangement of a pro-gentrification policy agenda is a social construct built on strategic (re-)organisation of urban governance structures. These findings suggest that reinforcing the empirical bases of the multifaceted and place-specific ties between gentrification and urban policy ought to be considered as a priority task for researchers seeking to make sense of contemporary urban change, while sustaining the critical essence of the gentrification concept and further developing its capacity to mobilise around issues of social justice and class domination in cities.
The Belgian residential landscape has considerably changed since the 1950s. If economic activity and collective housing continue to be concentrated in urban areas, the proliferation of single-family dwellings in suburban areas - dating back to the 19th century - continues unabated. Other developments are more recent, such as an increase in refurbishments and conversions of existing buildings, fuelled by among other things the insufficient production of new housing and a revaluation of older housing.This article provides an overview of residential construction in Belgium since the 1950s, focusing particularly on more recent changes using statistical resources that have yet to be fully explored. Through an analysis of building permits issued since 1996, we will try to highlight the particularities of the Belgian context and to reveal the most significant changes in terms of housing production, both quantitatively and geographically. The relative importance of public and private agents on the housing market will be studied using the example of the Brussels Region, for which very accurate data has been used.
The Financialization of the French Real Estate Industry: From the 1990s Office Property Crisis to the Subprime Crisis
European property markets became extensively financialized in the 2000s. The financialization of real estate reflects the transposition to the real estate sector, which is by nature localised, of the globalization of capital and investors, and application of financial approaches and techniques in property management. As real estate has become more financialized, property has come to be considered, managed and run like a financial asset. The financialization of the real estate industry is built on the major and growing influence of international investors. This paper investigates the stages of financialization in the real estate industry in France, which began in the mid-1990s with the intervention in the 1990s office property crisis by what are known as opportunistic investment funds, mostly based in North America.
Classification JEL: G01, G21, G23, N14, R30.
Abstract The paper develops a sympathetic critique ofthe concept of financialization. This concept has been developed to account for the empowering,of financial markets and their influence over the unfolding of economy, polity and society. Processes of financializationare claimed to manifest at a number of scales, ranging from higher levels of instability within the economy as a whole, through pressure exerted on corporations by capital markets, to the equity effects of the financial system on individuals and households.. In seeking to explain the change within contemporary society financializationhas to date been relatively underplayed, particularly when compared to similar and related concepts such as neoliberalization.While the concept of financializationhas the potential to unite researchers across cognate social science fields,
This paper summarizes the theoretical insights drawn from a study of thirteen large–scale urban development projects (UDPs) in twelve European Union countries. The project focused on the way in which globalization and liberalization articulate with the emergence of new forms of governance, on the formation of a new scalar gestalt of governing and on the relationship between large–scale urban development and political, social and economic power relations in the city. Among the most important conclusions, we found that:•Large–scale UDPs have increasingly been used as a vehicle to establish exceptionality measures in planning and policy procedures. This is part of a neoliberal “New Urban Policy” approach and its selective “middle — and upper–class” democracy. It is associated with new forms of “governing” urban interventions, characterized by less democratic and more elite–driven priorities.•Local democratic participation mechanisms are not respected or are applied in a very “formalist” way, resulting in a new choreography of elite power. However, grassroots movements occasionally manage to turn the course of events in favor of local participation and of modest social returns for deprived social groups.•The UDPs are poorly integrated at best into the wider urban process and planning system. As a consequence, their impact on a city as a whole and on the areas where the projects are located remains ambiguous.•Most UDPs accentuate socioeconomic polarization through the working of real–estate markets (price rises and displacement of social or low–income housing), changes in the priorities of public budgets that are increasingly redirected from social objectives to investments in the built environment and the restructuring of the labor market.•The UDPs reflect and embody a series of processes that are associated with changing spatial scales of governance; these changes, in turn, reflect a shifting geometry of power in the governing of urbanization.
In contrast to many other Western countries, the private rented sector is still of major importance in Belgium. On average its market share is around 28 per cent, increasing to 50 per cent or more in the major cities. Moreover, unlike many other countries, private renting is not subject to tight rent controls. On the contrary, rents are generally set freely and tenure security regulations are weak. This article summarizes the development of housing policy in Belgium in general and the legislation governing the private rented sector in particular. It then presents a profile of the private rented sector, including its tenant, landlords and dwellings. It goes on to review critically the existing legal framework that governs the sector and highlights the main problems that arise from this framework.
Using a mix of survey data, results from a study on local planning politics and fieldwork, this article discusses the interplay of planning and welfare policies with global financial markets in the ‘making’ of social segregation in Halle-Neustadt, a borough in the German city of Halle (Saale). Here, different developments come together. First, Halle-Neustadt has experienced two waves of privatization, leading to a complete change of ownership structures, marked by the rise of financial investors. Second, welfare cuts have put increasing pressure on welfare recipients to live in the cheapest housing available. This has led to the emergence of a ‘Hartz IV business model’ based on low, but state-subsidized, rents. Third, new planning policies have led to a massive drop in house prices, thus facilitating the use of ‘leverage’ strategies for financial investors. We expand on an already developed debate, providing new insights about relations between planning, state restructuring and financialization in a German context. We demonstrate that a broad array of changes in national regulatory settings, policy change in different sectors and local particularities can all be crucial in enabling financialization. We conclude that research should place greater emphasis on the state in providing explanations and take differences in context more seriously.
There is a small but growing literature on the financialization of housing that demonstrates how housing is a central aspect of financialization. Despite the varied analyses of the financialization of housing and the importance of housing to financialization, the relations between housing and financialization remain under-researched and under-theorized. The financialization of housing is not really a specific form of financialization, transcending as it does a number of different forms of financialization. Housing systems, in particular, vary widely across the globe, which implies that housing financialization will be inherently variegated, path-dependent and uneven. In this introduction to the symposium, I will discuss how the articles to follow contribute to the literature on the financialization of housing. Housing has entered a post-Fordist, neoliberal and financialized regime. Increasingly, both mortgaged homeownership and subsidized rental housing are there to keep financial markets going, rather than being facilitated by those markets. There is little evidence that the global financial crisis has resulted in any de-financialization of housing. There are common trajectories within uneven and variegated financialization, rather than radically different and completely unrelated forms of housing financialization.
Dans le système de production de l’habitat qui existe à Bruxelles, en ce début de 21ᵉ siècle, le logement est à la fois un bien répondant à un besoin vital, un bien faisant l’objet d’un droit inscrit dans la constitution, et une marchandise. Sa production est majoritairement laissée à des sociétés privées – pour l’essentiel des sociétés de promotion immobilière – auxquelles on laisse aussi le soin d’en fixer les prix, sur base de leur perception du marché du logement. Un marché où se rencontrent une demande et une offre, des “consommateurs” et des producteurs de logements, dont les intérêts sont diamétralement opposés. Un marché qui, contrairement à ce qu’en attend la théorie économique néoclassique, ne crée pas un équilibre, mais une crise perpétuelle. Un marché qui entretient et amplifie les inégalités sociales, et dont le fonctionnement génère, à Bruxelles, des conditions de vie indignes pour une part croissante de ménages.Cette étude lève le voile sur les mécanismes à l’œuvre du côté des sociétés qui sont les agents principaux de la production capitaliste de logements. Ces sociétés sont celles qui assurent, dans le domaine résidentiel, la fonction de promoteur immobilier (une fonction assurée par toutes sortes de sociétés, qui n’ont pas toutes officiellement la promotion immobilière comme activité principale). Il s’agit d’étudier empiriquement les façons dont ces sociétés utilisent, entretiennent, et transforment l’espace urbain et la géographie résidentielle des différentes classes sociales dans la ville.La partie théorique propose une réflexion sur la façon dont les promoteurs peuvent maximiser leur taux de profit à travers la localisation de leurs opérations de logements. Elle fait le lien entre les pratiques des promoteurs telles que j’ai pu les observer, la théorie de la rente foncière, et la question de la reproduction / transformation de la division sociale de l’espace. La partie empirique porte sur les promoteurs de logement, à Bruxelles, dans les années 2000. Elle décrit les promoteurs de logement actifs en Région bruxelloise, sur la base des données disponibles, par l’intermédiaire d’une typologie et de portraits d’entreprises. Elle compare ensuite les stratégies spatiales des différentes sortes de promoteurs, ce qui permet d’identifier les caractéristiques spécifiques qui influencent leurs choix de localisation.
Develops the 2 inter-related themes of accumulation and class struggle. The Marxist theory of accumulation views the role of investment in the built environment in the light of the internal contradictions of the accumulation process. Hence, investment in the built environment is seem as a response to the different forms of crisis which appear within the capitalist system. Then considers the issue of class struggle and how it influences investment in the built environment. Of particular interest is the manner in which class stuggle in the workplace is in part transformed, via the urbanization process, into struggles around the reproduction of labour in the living place. -from Editors
This paper seeks to advance debates about the financialization of housing by focusing on the emergence of rental housing as a frontier for financialization, a dynamic that is increasingly relevant since the global financial crisis. Situated in New York City, the research focuses on an aggressive wave of investment in affordable, rent-stabilized properties by private equity firms, their efforts to release value from these properties, and the implications of the 2008 financial crisis for their investment strategies and thus for tenants’ experience of home. Through detailed empirical analysis tracing the connections between how rental housing has been constituted as a new site for private equity investment globally, the local conditions facilitating this process in New York, and how it reshaped everyday life for tenants, the article theorizes tenants as unwilling subjects of financialization. Yet unwillingness does not necessarily translate to being overtaken; it also connotes reluctance, and indeed struggle. This novel conceptualization highlights the ways in which financialization meets with dissent, and its necessarily contingent and incomplete nature. The paper therefore moves forward the wider intellectual project of understanding financialization not as a monolithic and inevitable process, but as one characterized by resistance from without and contradiction from within.
Suburban residential developments with a standard architecture, small gardens, and "culs de sacs" are common in periurban landscapes. These Planned Unit Developments (PUD) are often considered as the usual pattern of urban sprawl. They are blamed for standardizing landscapes and strengthening social homogeneity and spatial segregation. In the metropolitan region of Paris, a substantial fraction of such developments are produced by developers who integrate all stages of the production, from the land-division to the marketing of the houses. This branch of industry is traditionally considered as very "local" but we observed an important movement of concentration in this sector. We hypothesize that the development of big companies has important consequences on the organization of the system of production of the residential developments, on their morphology and homogeneity.
Article consultable en ligne : www.cairn.info/revue-francaise-de-science-politique-2011-6-page-1097.htm
The discrete hand
Starting with the growing role of large private investors in cities, this article discusses the power of the global finance. In some case, it is visible, concentrated on large projects and conducted by a small group of actors. More frequently, this power is informational : based on accounting data and the use of ratios. These tools contribute to measure the values and to recommend the allocation of savings to projects. They operate as well as mechanism of coordination, and they disseminate the influence of the global finance. Being a visible power in some cases, in some others being distributed and informational, raise new questions. Governments know how to regulate the power of ownership and the visible hand of management ; the informational power of the global finance blurs the categories.
This paper compares how recent waves of private equity real estate investment have reshaped the rental housing markets in New York and Berlin. Through secondary analysis of separate primary research projects, we explore financialisation’s impact on tenants, neighbourhoods, and urban space. Despite their contrasting market contexts and investor strategies, financialisation heightened existing inequalities in housing affordability and stability, and rearranged spaces of abandonment and gentrification in both cities. Conversely cities themselves also shaped the process of financialisation, with weakened rental protections providing an opening to transform affordable housing into a new global asset class. We also show how financialisation’s adaptability in the face of changing market conditions entails ongoing, but shifting processes of uneven development. Comparative studies of financialisation can help highlight geographically disparate, but similar exposures to this global process, thus contributing to a critical urban politics of finance that crosses boundaries of space, sector and scale.
Consumer sovereignty hypotheses dominate explanations of gentrification but data on the number of suburbanites returning to the city casts doubt on this hypothesis. In fact, gentrification is an expected product of the relatively unhampered operation of the land and housing markets. The economic depreciation of capital invested in nineteenth century inner-city neighborhoods and the simultaneous rise in potential ground rent levels produces the possibility of profitable redevelopment. Although the very apparent social characteristics of deteriorated neighborhoods would discourage redevelopment, the hidden economic characteristics may well be favorable. Whether gentrification is a fundamental restructuring of urban space depends not on where new inhabitants come from but on how much productive capital returns to the area from the suburbs.
Considering the recent impact of the capital market on corporate strategy, this text analyzes, through argument and supportive case studies, how pressures from the capital bull market of the 1990s and bear market of the early 2000s, have reshaped management action and calculation in large, publicly quoted US and UK corporations. Beginning with the dissatisfaction with classical strategy and its limited engagement with the processes of financialization, the book moves on to cover three detailed company case studies (General Electric, Ford and GlaxoSmithKline) which use long run financial data and analysis of company and industry narratives to illustrate and explore key themes. The book emphasizes the importance of company and industry narrative, while also analyzing long term financial results, and helps to explain the limits of management action and the burden of expectations placed on corporate governance. Presenting financial and market information on trajectory in an accessible way, this book provides a distinctive, critical social science account of management in large UK and US corporations, and it is a valuable resource for students, scholars and researchers of business, management, political economy and non-mainstream economics. short listed for the 2007 IPEG Book Prize. © 2006 Julie Froud, Sukhdev Johal, Adam Leaver and Karel Williams. All rights reserved.
This paper uses several events in New York in the late 1990s to launch two central arguments about the changing relationship between neoliberal urbanism and so–called globalization. First, much as the neoliberal state becomes a consummate agent of—rather than a regulator of—the market, the new revanchist urbanism that replaces liberal urban policy in cities of the advanced capitalist world increasingly expresses the impulses of capitalist production rather than social reproduction. As globalization bespeaks a rescaling of the global, the scale of the urban is recast. The true global cities may be the rapidly growing metropolitan economies of Asia, Latin America, and (to a lesser extent) Africa, as much as the command centers of Europe, North America and Japan. Second, the process of gentrification, which initially emerged as a sporadic, quaint, and local anomaly in the housing markets of some command–center cities, is now thoroughly generalized as an urban strategy that takes over from liberal urban policy. No longer isolated or restricted to Europe, North America, or Oceania, the impulse behind gentrification is now generalized; its incidence is global, and it is densely connected into the circuits of global capital and cultural circulation. What connects these two arguments is the shift from an urban scale defined according to the conditions of social reproduction to one in which the investment of productive capital holds definitive precedence.
L'objectif de cet article est d'esquisser une problématique générale pour l'interprétation du processus urbain capitaliste. A cette fin, deux thèmes apparentés, l'accumulation et la lutte de classes, sont examinés. Un examen de la théorie marxiste de l'accumulation mène à une compréhension théorique du rôle de l'investissement dans le cadre bàti en relation avec l'ensemble de la structure et des contradictions du processus d'accumulation. Plus précisément, l'investissement dans le cadre bâti est perçu en relation avec les différentes formes de crise qui peuvent surgir sous le capitalisme. Une séléction d'exemples empiriques est présentée et discutée afin d'illustrer comment le support théorique est relié à l'évidence historique. Ceçi permet de mettre à l'intérieur d'une perspective théorique cohérente les ‘long cycles’ d'investissement observés, ainsi que les changements geógraphique des fluxes d'investissements. Ensuite la manière dont le cadre bâti lui-même exprime et contribu aux crises capitalistes est examinée. Il est demontré que sous le capitalisme il existe une lutte perpetuelle selon laquelle le capital essaye de construire un environnement propre à son image seulement pour le détruire avec la réapparition d'une nouvelle crise. L'analyse considère alors comment la lutte de classes—c'est à dire la réaction organisée de la force du travail aux déprédations du capital—influence la direction et la forme de l'investissement dans le cadre bâti. D'un intérêt particulier est la manière dont la lutte de classes au lieu du travail se trouve déplacée à travers le processus urbain vers des luttes centrées autour de la reproduction de la force du travail au foyer. Quelques exemples de ces luttes sont présentés afin d'illustrer comment elles se rattachent à la lutte fondamentale au point de production en même temps qu'elles influencent la direction et la forme de l'investissement dans le cadre bâti.
The purpose is to assess the impact of the present round of capital restructuring in the US, commonly dated from the 1973-1975 recession, on the built environment of global cities. Two consequences are addressed: the extent to which capital exhibited a profound shift into the secondary circuit, resulting in a building boom; and the effects of new social and economic activities on the composition of new construction investment. Private construction activity in two metropolitan areas, New York and Los Angeles, is analysed over the postwar period. The findings point to a more complex relation between capital restructuring and urban restructuring, and quite divergent experiences across these two global cities. -from Author
Financialization can be characterized as capital switching from the primary, secondary or tertiary circuit to the quaternary circuit of capital. Housing is a central aspect of financialization. The financialization of mortgage markets demands that not just homes but also homeowners become viewed as financially exploitable. It is exemplified by the securitization of mortgage loans, but also by the use of credit scoring and risk-based pricing. In the past century, mortgage markets were transformed from being a 'facilitating market' for homeowners in need of credit to one increasingly facilitating global investment. Since mortgage markets are both local consumer markets and global investment markets, the dynamics of financialization and globalization directly relate homeowners to global investors thereby increasing the volatility in mortgage markets, as the current crisis shows all too well.
This paper presents systematic empirical evidence for the financialization of the US economy in the post-1970s period. While numerous researchers have noted the increasing salience of finance, there have been few systematic attempts to consider what this shift means for the nature of the economy, considered broadly. In large part, this omission reflects the considerable methodological difficulties associated with using national economic data to assess the rise of finance as a macro-level phenomenon shaping patterns of accumulation in the US economy. The paper develops two discrete measures of financialization and applies these measures to postwar US economic data in order to determine if, and to what extent, the US economy is becoming financialized. The paper concludes by considering some of the implications of financialization for two areas of ongoing debate in the social sciences: (1) the question of who controls the modern corporation; and (2) the controversy surrounding the extent to which globalization has eroded the autonomy of the state.
I discuss the impact of financialisation on real capital accumulation in the US. Using data from a sample of non-financial corporations from 1973 to 2003, I find a negative relationship between real investment and financialisation. Two channels can help explain this negative relationship: first, increased financial investment and increased financial profit opportunities may have crowded out real investment by changing the incentives of firm managers and directing funds away from real investment. Second, increased payments to the financial markets may have impeded real investment by decreasing available internal funds, shortening the planning horizons of the firm management and increasing uncertainty.
Whilst real estate capital became a driving force in analyses of urban development, urban land rent theory has made only very limited progress during the past decade. There are a number of reasons for this - such as a weak conceptualization of the role of political agency, for example. Hence, a way out of this relative stagnation, by attempting to systematically develop an integrated view on structure and agency in the context of urban land rent, is offered in this article. Advances in critical theory, thinking about space and dialectic reasoning contribute to the development of a new perspective on land rent. Land rent is conceptualized as a middle-range theory. In order to bring together concrete urban phenomena with the general process of political-economic development, a systematic link between land rent theory and the theoretical apparatus of the French Regulation School is developed. The reformulation of land rent theory from a regulationist perspective underlines the importance of the institutional context (and its changes) for an understanding of rent and its role in the urban context. In so doing, land rent theory proves to be a very useful tool for providing an integrated political-economic perspective for analyses of urban phenomena. This is illustrated briefly in the cases of Vienna and Montivideo.
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- Luna Rodrigo
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- Heeg
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- A. Guironnet
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