Financialization Of Housing Research Articles

Getting creative with housing? Case studies of Paintworks, Bristol and Baltic Triangle, Liverpool

ABSTRACT Florida’s ‘creative class’ terminology emphasizes the desirability of policy to drive better life-work balance, providing personalized housing and vibrant neighbourhood amenities. Interest in these themes is to be found so far in urban economics and sociology literature. Little however is known about the market reactions from the property sector. This paper explores the spatial manifestation of the ‘creative class’ ideals in terms of mixed-use and the locations of housing provision in two development initiatives – Paintworks in Bristol and Baltic Triangle in Liverpool. Findings from interviews and field observations revealed a dominant ‘business as usual’ attitude from the development sector. Regulatory controls, risk aversion, inert housing consumption preferences, and housing financialization, all played their part in deferring the emergence of the idealist ‘creative housing products’ in the UK. More importantly, the housing market dynamic is still better understood on the city or even regional scales instead of fine-grained street levels. Findings in this paper therefore call for deeper understanding regarding the connections between housing and economic development, including specifically creativity and innovation.

Facing financialization in the housing sector: A human right to adequate housing for all

Housing is increasingly seen as a vehicle for wealth accumulation rather than a social good. ‘Financialization’ of housing refers to the expanding and dominant role of financial markets and corporations in the field of housing, leading to unaffordable and insufficient housing and discrimination. Although clearly linked to the right to adequate housing, financialization and its effects are not often viewed from a human rights perspective. This article fleshes out this important link by illuminating the standards set in relation to the right to adequate housing enshrined in Article 11(1) ICESCR. It is shown that recently, human rights bodies have confronted the issue of financialization more directly, translating general requirements to this particular issue. Moreover, efforts at UN level are mirrored in initiatives at the local level, signalling the beginning of a shift towards a paradigm that complies with human rights. The financialization of housing and the response of human rights also allow for addressing a more general issue, namely the potential of majority protection in times of human rights backlash. In this regard, it is worth emphasising that human rights such as the right to adequate housing protect not only the extreme poor. In the context of financialization, this may contribute to better housing conditions as well as reconnect people to their human rights.

“GET SMALLER”? Emerging geographies of micro‐living

Cities across the world are in the grip of an intensifying housing crisis, in which access to affordable, secure, and appropriate housing is increasingly inaccessible for the majority. There is rising pressure on stakeholders to find solutions but, simultaneously, persistent opposition to housing models that contest the neoliberal logics which prioritise housing's financialisation. In this context, many proposed and developed “solutions” have focused on how housing can – in the words of one entry to an architectural competition – “GET SMALLER.” Termed “micro‐living,” a trend is emerging for housing models that shrink living spaces, either by providing self‐contained units at below minimum space standards or by offering “co‐living” tenancies in small private rooms with access to shared communal spaces. Presented as innovative and aspirational, micro‐living distinguishes itself from unequivocally problematic small housing, such as Hong Kong's “coffin homes” or the UK's “beds‐in‐sheds.” While micro‐living is transforming ways of imagining, producing, and inhabiting cities, it has, as yet, been little explored by geographers. Responding to this gap, this paper traces the emerging geographies of micro‐living in major Western cities and demonstrates the importance of the topic in Geography. As well as detailing micro‐living's typologies, we excavate the lineages of micro‐living and consider the discourses it draws on in self‐presenting as an aspirational form of homemaking. In doing so, we highlight some of the issues that micro‐living responds to, exacerbates, and entrenches, including the stunted opportunities of millennials since the 2008 recession and the precarity of contemporary labour economies.

Toward a right to housing for Australia: Reframing affordability debates through article 11(1) of the International Covenant on Economic, Social and Cultural Rights

ABSTRACT This paper argues that engaging the content of, and state obligations for, the right to housing under Article 11(1) of the International Covenant on Economic, Social and Cultural Rights (ICESCR) can contribute to an important shift in how we think about, and mobilise around, housing affordability issues in Australia. Against a background of a widely acknowledged housing affordability crisis, the paper argues that debates over affordability unfold in particular ways in Australia, and the right to housing shows the paradoxes and problems of the housing affordability picture in a new light. The article examines three facets of housing affordability: affordability for the vulnerable or disadvantaged; housing as wealth and savings; and housing financialisation for speculation and investment. It argues that the right to housing as enshrined in ICESCR can be used as a foundation on which to build a new discourse around the right to housing in Australia; to hold governments’ actions up against an international standard; and to imagine and guide creative policy proposals.

Yield and the city: Swedish public housing and the political significance of changed accounting practices

• Calculative practices are crucial for financialization of housing. • Discounting techniques drawing on yield data show the political role of accounting. • Uncertainty of the future challenges the view of accounting as a firm discipline. • The vague notion of time opens up for political resistance and counter calculations. This article discusses the role of accounting in the changes that the public housing sector in Sweden has undergone. Public housing has been the cornerstone of the welfare state, which perceived housing as a right for all. These housing policies have been challenged from the 1990s onwards, and new legislation introduced in 2011 forced the sector to further economise operations. Because observance of the new legislation supposedly relied on accounting practices, calculative practices became important. The yield metric, which originates in financial economics, became prominent due to its capacity to condense contradictory conditions and time into a single figure, thereby making assets comparable. A study comprising 44 interviews (46 interviewees) undertaken in 9 council-run public housing companies reveals the social impact of the introduced accounting practices. Results indicate that different understandings of the future can either (1) justify bringing residential holdings into a non-calculable sphere to secure political control or (2) result in counter calculations based on assumed future value increases on commercial investments. This vagueness of the notion of time influences the connection between accounting and governmentality and, ultimately, economisation processes since it opens up for political resistance and counter calculations

The New Frontiers of Housing Financialization in Phnom Penh, Cambodia: The Condominium Boom and the Foreignization of Housing Markets in the Global South

ABSTRACT This article investigates housing financialization processes in low-income countries (LICs). Considering housing as both capital and commodity, the article excavates the roots of housing financialization in LICs since the 1960s, and shows how financialization has been used, since the 1990s, to circumvent long-standing obstacles to the marketization and commodification of LICs’ housing markets. Focusing on the recent development of the condominium market in Phnom Penh, the capital city of Cambodia, the article then investigates the role of various stakeholders (e.g., development agencies, public institutions, foreign and international investors, transnational developers, brokers) in the contemporary financialization of local housing markets. Detailing their strategies, discourses, and actions, I argue that in economic contexts where the financial sector remains underdeveloped, local and international developers and brokers act as agents of financialization by creating specific channels of real estate capital circulation and landing. I argue that the case of Phnom Penh reveals how foreign and transnational stakeholders, mainly originating from Asia, have created a specific regime of capital accumulation through housing financialization, which I name the foreignization of housing markets. This regime emphasizes the significant capacity of financialization to penetrate markets that have long remained out of its reach by establishing capital extraversion mechanisms.

“Housing Prices Never Fall”: The Development of Housing Finance in Taiwan

ABSTRACT This article deals with the path-dependent features of financialization of housing in Taiwan, an East Asian developmental state. The levels of foreign capital and securitization in Taiwan’s housing market remain relatively low, meaning domestic capital, of which there is an abundance, is the major financial source of such speculation. The process does not include the retrenchment of the welfare state, because Taiwan has been a homeowner society. After financial liberalization in the 1980s, Taiwan’s state intervention in the housing and financial sectors has actually intensified via the enactment of more regulations to decrease the role of the informal financial and housing sectors. As a result of neoliberalization giving precedence to market mechanisms, various low-interest mortgage programs in the 1990s, all subsidized by public funding, have increased the rate of homeownership and sustained housing prices. Even though this varied the development of housing financialization, housing in Taiwan has largely become a tool of speculation, and housing affordability has become a serious problem.

Assetization: The Chinese Path to Housing Financialization

Although the literature on the financialization of housing pays most attention to mortgaged and securitized homeownership and the penetration of capital into subsidized rental housing, forms of financialization are varied. In China, housing commodification and privatization has underpinned a growth in homeownership. One of the outcomes of financialization of housing is the transformation of owner-occupied housing into a financial asset for households’ wealth. Despite a relatively low level of residential mortgage lending in China, both the absolute volume of mortgages and the proportion of gross domestic product they represent are now rising. Housing value appreciation has driven a significant increase in the financing of housing consumption through multiple channels. This article examines these channels and suggests that the financialization of housing in China is a critical part of the country’s overall development model. It is further argued that the root of housing financialization in China is not mortgage securitization but the creation of owner-occupied housing as a financialized asset to propel the wider financialization of the Chinese economy in the context of state-controlled financial environment.

The financialization of Canadian multi-family rental housing: From trailer to tower

ABSTRACT After 20 years of disinvestment, new financial vehicles began targeting Canada’s multi-family apartment sector in the 1990s, with the first Real Estate Investment Trust (REIT) declaring “Apartments make money!” on the cover of their 1999 report. This paper details the financialization of multi-family rental, tracing how REITs grew from owning zero to 10% of Canada’s apartments, while “financialized” landlords comprise nine of the ten biggest landlords. I argue that neoliberal restructuring, government policy, and financial innovations created conditions for profitable reinvestment. This reinvestment is transforming the sector, building-by-building, into a global asset class. Meanwhile, in each suite, tenants are exposed to the logics of finance capital, in which “repositioning” strategies generate profits via dispossession. This paper traces the expansion of financialized landlords across a nation and down the urban hierarchy, from gentrified neighborhoods, to mobile home parks, to northern resource towns—finding that penetration is more prominent in jurisdictions with weaker rent controls. I propose a typology of geographic-investment strategies, in which “core,” “value-add,” and “opportunistic” investment strategies are applied in major markets, marginal geographies, and resource-oriented communities. This trend is understood as one with negative impacts on housing justice, affordability, and patterns of social and spatial inequality.

‘The Best Investment of Your Life’: Mortgage Lending and Transnational Care among Ecuadorian Migrant Women in Barcelona

ABSTRACT After Ecuador’s worst economic downturn in 1999, women left the country in the thousands. They migrated for economic reasons but also hoping to distance themselves from gendered duties and obligations that confined them to oppressive feminine roles. Less than a decade later they bought into Spain’s housing bubble in an effort to ‘make up’ for their departure. I argue that Ecuadorian migrant women’s decisions to buy mortgaged homes in Barcelona were in part informed by their conceptualizations of domesticity, care giving, and motherhood. For women portrayed as culpables or ‘culprits’ for leaving Ecuador and failing to upkeep their caregiving responsibilities in their country of origin, the promise of homeownership became a way of accomplishing complex forms of transnational caregiving as well as upward mobility. This article focuses on gendered conceptualizations of care, motherhood, and kinship amongst Ecuadorian migrant women and the relationship these notions have with housing financialization.

Mexico’s Housing Paradox: Tensions Between Financialization and Access

ABSTRACT The main aim of this article is to analyze the participation of different government levels and institutions in promoting the financialization of housing in Mexico. Furthermore, it examines some of the implications of following this logic, particularly at the local and household levels, such as surmounting mortgage debt, the clustering of vacant and abandoned housing, and, ultimately, the reproduction of poor housing conditions. Since the late 1990s, millions of households have acquired mortgages to buy homes in the periurban fringes of Mexican cities. Such new sprawling housing developments, however, have offered limited access to economic opportunities, and have imposed a significant burden on local governments to provide infrastructure and services. Many families have also seen their mortgage debt increase, forcing many of them to leave their dwellings behind. By 2010, Mexico had the highest vacancy rate among member countries of the Organisation for Economic Co-operation and Development, and about a third of Mexicans still live in precarious housing conditions. Such paradoxical coexistence, I argue, exposes a tension between the financialization of and the right to housing, and the extent to which the former has trumped the latter.

The financialization of rental housing in Tokyo

Over the past two decades, the private rental sector has grown significantly in Japan. Once an overlooked sector of the market, it has been seized by the financial industry to the point of becoming the second largest REIT residential market in the world. This paper explores the development of residential REITs in Japan, in a context of demographic decline and urban shrinkage. It highlights the strategies of major Japanese real estate groups to diversify their activities and strengthen their control over popular downtown Tokyo neighbourhoods, building on government initiatives to revitalize land markets and stabilize the banking system through real estate investment instruments. As the paper shows, the need to secure financial investors' expectations of attractive returns has led REIT asset managers to target the vast majority of their leasing activity to Japan’s young, “promising” corporate employees. By pointing to the mediation of large corporations in the landlord-tenant relationship, the paper brings these neglected actors into the framework of financialized rental housing, and puts the analysis into the broader context of employment.

Rental property investment in disadvantaged areas: the means and motivations of Western Sydney’s new landlords

For more than two decades, Australia’s private rental sector (PRS) has seen rapid growth, as latterly replicated in most other anglophone nations. Commentary and scholarly attention have generally focused on the population occupying this growing sector – so-called ‘generation rent’. The corollary, ‘generation landlord’, has meanwhile remained largely obscure. This article argues that the emerging literature on the ‘financialization of housing’ offers insights into the ongoing rise of investor landlords. Our analysis also contributes to the picture of financialized rental property investment; here drawing on a survey of investor landlords and their properties in an Australian PRS growth centre: disadvantaged suburbs in western Sydney. Most investors lived elsewhere; the attractions of western Sydney property acquisition being the expectation of unusually large capital gains, the prospect of amassing multiple properties and the local scope for intensified asset utilization. Referencing existing research evidence, this suggests that, even by comparison with the 2000s, a more professional, financialized investor mindset is emerging.

The Political Economy of Housing Financialization in Turkey: Links With and Contradictions to the Accumulation Model

ABSTRACT Financialization influenced the Turkish economy and housing industry mostly through financial liberalization moves and soaring capital inflows. It both increased household liabilities and mortgage loans dramatically and offered various facilities for the housing industry. Relevant legal regulations not only helped the Turkish housing industry prosper but also eased its integration into the national and global financial system. In addition, political implications constituted a strong motivation for governments to attach special importance to the housing industry. I examine housing financialization as an integral part of the accumulation model of the Turkish economy and argue that the housing industry lies at the very heart of the contradictions of this model. The large-scale capital inflows both intensified the dependency on foreign resources and increased the role of the domestic demand. This is the main contradiction of the accumulation model; it manifests itself in the interest rate dilemma and is also critical for housing financialization in Turkey because the characteristics of this model are especially valid for the housing industry. Moreover, not only do the contradictions of the accumulation model disrupt the housing industry, but also the characteristics of the housing industry contribute to the disruption of this model.

Financialization of housing in Southern Europe – the role of the state

Financialization of housing in Southern Europe – the role of the state

Is urban housing becoming a commodity? Reflections on housing financialisation in EU cities

Is urban housing becoming a commodity? Reflections on housing financialisation in EU cities

Financeirização da habitação e desigualdades socioterritoriais: um estudo comparado das Áreas Metropolitanas de Lisboa e do Porto

Mortgage credit marks housing provision in Portugal since the beginning of the 1990s, becoming an important mechanism of reproduction of social and territorial inequalities. Based on data from the Census of 2011, this article analyzes the relationship between forms of housing provision and socioterritorial heterogeneity in the Metropolitan Areas of Lisbon and Porto. The article concludes that financialization of housing is mostly a phenomenon of the Metropolitan Area of Lisbon, where a closer relationship was found between finance and housing, associating new construction and population dispersion with mortgage credit.

Hipertrofia turystyki miejskiej – geneza i istota zjawiska

W artykule zaprezentowano autorskie ujęcie hipertrofii turystyki miejskiej, jak i genezę tego zjawiska w kontekście przemian współczesnego miasta. Przedstawiono, na podstawie literatury, logikę włączania i wykorzystywania turystyki w transformacji miejskiej gospodarki i przestrzeni oraz przypisane jej role w polityce miejskiej. Pokazano ponadto w różnych kontekstach geograficznych procesy i zjawiska towarzyszące współczesnej turystyfikacji miasta, w tym zyskującą na znaczeniu finansjalizację zasobów mieszkaniowych.

Housing Financialization in the Global South: In Search of a Comparative Framework

ABSTRACT The financialization of housing in the Global South (GS) and peripheries of the Global North (GN) develops in different ways than in the GN because the mechanisms underlying and pushing financialization are fundamentally different. We argue that subordinated financialization in the GS is the contemporary form of uneven and combined development, shaped by the financialization of the GN. The recycling of GN excess liquidity in countries lower in the global money hierarchy has contributed to the growth of mortgage lending in the GS and peripheries of GN. With the macrocomparative perspective in our article we provide a framework to rethink the relations between GN and GS in shaping distinct patterns of uneven and combined financialization, but also to rethink the varieties of capitalism and residential capitalism approaches. In the GS we can distinguish between at least two additional types: state-led market economies and less-financialized market economies.

Selecting Spaces, Classifying People: The Financialization of Housing in the South African City

ABSTRACT Focusing on Cape Town, this article investigates how financialization unfolds in the South African housing market. I use a mixed method that combines in-depth field research conducted among key market players with an analysis of georeferenced residential transactions. Connecting financial and urban geography, the article retraces the institutional and social anatomy of financialization. I demonstrate how financialization unfolds in metropolitan areas through the classification of people and the selection of spaces, by staying away from the urban poor, and instead incorporating the middle- and upper-income sections of society. In that regard, the article unpacks the urban and class structures of housing financialization in South Africa, which challenges narratives from the urban Global North. Two market segments drive financialization in South Africa: the rental market, which became a new financial frontier with the emergence of corporate landlords; and the owner-occupied market, with the rise of the mortgage industry and the limited implementation of securitization, underpinned by highly restrictive lending practices. In both segments, financial institutions and corporate landlords rely on credit scoring to classify and select tenants or mortgage beneficiaries; they target specific areas within the post-apartheid city to develop residential portfolios and allocate mortgages.