Financialization of Housing in Brazil: New Frontiers

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.     

New Geographies of Residential Capitalism: Financialization of the Turkish Housing Market Since the Early 2000s

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 Financialization of A Social Housing Provider

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.     

The Financialization of Housing Production in Brussels

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.     

Unwilling Subjects of Financialization

This article 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 into 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 article therefore develops 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.     

Assisted Self-help Housing in Mexico: Advocacy, (Micro)Finance and the Making of Markets

This article examines forms of housing finance that offer poor households opportunities for sourcing resources for construction work through non-mortgage microloans. In Mexico, these housing microfinance schemes have recently been incorporated into national housing policies. On a global level, the past 10 to 15 years have seen the emergence of institutional investment in microfinance. I reflect on these processes in this article by bringing critical accounts of financial inclusion in development studies and the debate on financialization within urban studies and beyond into dialogue. I combine micro- and macro-scale perspectives to examine how households become financial clients and how finance gains influence by expanding capitalist markets into the informal housing sector. This discussion is based on policy review and document analyses and an empirically grounded account of an assisted self-help housing case study. In the article I draw on three focal concepts—risk, debt and marketization—to highlight the ambivalences of the expanded access to finance for poor households engaged in self-organized building practices. These ambivalences emerge from the multiplicity of operational logics and motivations in the field of housing provision for the poor, and the profoundly conflicting rationalities of financial- and social-sector actors.     

Demolishing the Present to Sell off the Future? The Emergence of ‘Financialized Municipal Entrepreneurialism’ in London

This article introduces a new mode of urban entrepreneurialism in London through a study of the state‐executed, speculative development and financialization of public land. In response to an intensifying housing crisis and austerity‐imposed fiscal constraints, municipalities in London are devising entrepreneurial solutions to deliver more housing. Among these ‘solutions’ can be found the early signs of the state‐executed financialization of public housing in the UK with the use of speculative council‐owned special purpose vehicles (SPVs) that replace existing public housing stock with mixed‐tenure developments, creating ambiguous public/private tenancies that function as homes and the basis for liquid financial assets. Drawing together parallel literatures on the financialization of urban governance and housing, and combining these with original empirical research, we situate these developments in contrast to earlier modes of governance, identifying a distinct mode of entrepreneurial governance in London: financialized municipal entrepreneurialism. The local state is no longer merely the enabler—limited to providing strategic oversight of the private sector—but financializes its practice in a reimagined commercialized interventionism, as property speculator. This article concludes that while the architects of this new mode of entrepreneurialism extol the increased capacity and control it provides, any such gains must be set against longer‐term financial, democratic and political risks.     

Informal Housing in the United States

Research on informal housing tends to focus overwhelmingly on less developed countries, downplaying or ignoring entirely the presence of informality in United States housing markets. In actuality, a longstanding and widespread tradition of informal housing exists in the United States but is typically disregarded by scholars. In this article we draw on three definitions of informality—as non‐compliant, non‐enforced, or deregulated economic activity—to characterize examples of informality in US housing markets, focusing in particular on five institutions that govern housing market activity in this country: property rights law, property transfer law, land‐use and zoning, subdivision regulations, and building codes. The cases presented here challenge the notion that informality is absent from US housing markets and highlight the unique nature of informal housing, US style—namely, that informal housing in the US is geographically uneven, largely hidden and typically interwoven within formal markets. We conclude with a discussion of how research on informal housing in the US can inform research in the global South.     

Diagnosing housing fever with an econometric thermometer

Housing fever is a popular term to describe an overheated housing market or housing price bubble. Like other financial asset bubbles, housing fever can inflict harm on the real economy, as indeed the U.S. housing bubble did in the period following 2006 leading up to the general financial crisis and great recession. One contribution that econometricians can make to minimize the harm created by a housing bubble is to provide a quantitative “thermometer” for diagnosing ongoing housing fever. Early diagnosis can enable prompt and effective policy action that reduces long-term damage to the real economy. This paper provides a selective review of the relevant literature on econometric methods for identifying housing bubbles together with some new methods of research and an empirical application. We first present a technical definition of a housing bubble that facilitates empirical work and discuss significant difficulties encountered in practical work and the solutions that have been proposed in the past literature. A major challenge in all econometric identification procedures is to assess prices in relation to fundamentals, which requires measurement of fundamentals. One solution to address this challenge is to estimate the fundamental component from an underlying structural relationship involving measurable variables. A second aim of the paper is to improve the estimation accuracy of fundamentals by means of an easy-to-implement reduced-form approach. Since many of the relevant variables that determine fundamentals are nonstationary and interdependent we use the endogenous instrumental variable based method (IVX) to estimate the reduced-form model to reduce the finite sample bias which arises from highly persistent regressors and endogeneity. The recursive evolving test proposed by Phillips, Shi, and Yu (PSY) is applied to the estimated nonfundamental component for the identification of speculative bubbles. The new bubble test developed here is referred to as PSY-IVX. An empirical application to the eight Australian capital city housing markets over the period 1999–2017 shows that bubble testing results are sensitive to different ways of controlling for fundamentals and highlights the importance of accurate estimation of these housing market fundamentals.     

THE USE AND ABUSE OF MARKETS IN HOUSING POLICY

This paper argues that, despite its rhetoric in support of markets, government does not understand how markets work, but is rather trying to use certain aspects of markets to control social housing. The paper looks at three areas: first, the idea of private finance and how this is used by government as a form of public policy; second, the notion of risk and whether it actually occurs in social housing; and third, the contention that government is incapable of appreciating the manner in which markets operate because it only wishes to provide safe options and so cannot countenance real choice and competition.     

Financialization,Urban Governance and the Planning System: Utilizing ‘Development Viability’ as a Policy Narrative for the Liberalization of Ireland's Post‐Crash Planning System

Drawing upon the Irish case, this article explores the interaction between the financialized economy and the urban planning system. While considerable scholarship has examined the financialization of real estate, it remains unclear how planning systems are being repurposed to facilitate a finance‐led regime of urban growth or how the ‘real estate–financial complex’ seeks to enact planning policy transformations that support its interests. This article explores how such actors have advanced the concept of ‘financial viability of development’ as a means of influencing the post‐crisis re‐regulation of Irish planning policy. This group has argued that housing construction in post‐crash Ireland is unviable given the high development finance costs, onerous planning gain contributions and the lack of development certainty in the planning process. As such, housing construction has been at an all‐time‐low, leading to a new crisis in affordable housing provision. In response, a complicit state has further liberalized the planning system, introducing an array of policies that are evermore facilitative of development interests. Empirical findings, based on interviews with developers, lobbyists and planners, emphasize the importance of informal access to policymakers, the wielding of ‘expert knowledge’ and media management to co‐opt the state into adopting financial viability within planning policymaking.     

Lisbon After the Crisis: From Credit‐fuelled Suburbanization to Tourist‐driven Gentrification

This article examines Lisbon's post‐crisis transition from a once dominant process of suburban expansion enabled by abundant credit to one of ongoing gentrification of its historic centre. In my research, I draw on quantitative and qualitative data to illustrate the remarkable growth of the metropolitan area's population and dwelling stock until the global financial crisis—which affected the Portuguese economy in the course of a process of financialization that relied heavily on the housing industry—and the intensity of urban rehabilitation in subsequent years. However, there is evidence that the latter has not halted nor reduced the loss of long‐term residents in the historic centre, as tourists and other international gentrifiers occupy the upgraded dwelling stock amid an escalation of house prices and rents. The specific contribution of this research lies in the link that it establishes between Lisbon's ongoing process of inner‐city gentrification and the lack of suburban expansion after 2007. By showing that the credit crunch triggered a shift in the geographic location of real‐estate capital that materialized in a new urban development model, this research adds an empirical layer to the study of the spatial effects of the crisis and contributes to the literature on the subsequent restructuring of southern European housing markets.     

英国住房保障政策的体系、进展与反思

英国是世界上最早实施政府干预住房市场的国家,早在1919年颁布的《住房和城镇规划法》中就明确规定居民住房问题为公共事务,政府对此负有义务。经过不断的摸索和改进,英国的住房保障政策从起初的政府直接供给公共住房,逐渐向政府以财政、金融等手段鼓励扶持社会化公共住房的建造与运营转变。本文对英国20世纪90年代以来的住房保障体系演变与发展现状做了介绍,并重点对扶持政策、资助项目、主管机构、融资方式等方面进行了详细阐述,以期对今后我国住房保障相关政策的研究制定有所启示。     

Planning Reform and Housing Costs: Why The Coalition Failed and What it Means

Housing costs in the UK have exploded in recent decades. Contrary to what is often claimed, this has nothing to do with population density, demographics or a lack of public housing. A review of the empirical literature shows that the key determinant of housing costs is the severity of planning restrictions. Faced with a well‐organised NIMBY opposition, the coalition failed in its attempt to make the planning system more development‐friendly. This is not surprising, because the current system provides incentives which make NIMBYism a rational option. The coalition ought to address these incentives rather than trying to sidestep them.     

Late Neoliberalism: The Financialization of Homeownership and Housing Rights

Over the last few decades we have witnessed a global U‐turn in prevailing housing and urban policy agendas, spread around the world by the driving forces of globalization and neoliberalism. The new paradigm was mainly based on the withdrawal of states from the housing sector and the implementation of policies designed to create stronger and larger market‐based housing finance models. The commodification of housing, together with the increased use of housing as an investment asset within a globalized financial market, has profoundly affected the enjoyment of the right to adequate housing. Taking the World Bank's 1993 manifesto as a starting point and the subprime crisis as its first great international flashpoint, this essay traces some key elements of the neoliberal approach to housing and its impact on the enjoyment of the right to housing in different contexts and times. The reform of housing policy — with all its components of homeownership, private property and binding financial commitments — has been central to the political and ideological strategies through which the dominance of neoliberalism is maintained. Conversely, the crisis (and its origins in the housing market) reflects the inability of market mechanisms to provide adequate and affordable housing for all.     

Engineering the Financialization of Urban Entrpreneurialism: The JESSICA Urban Development Initiative in the European Union

Urban entrepreneurialism and neoliberal urban governance are assuming new forms under finance‐dominated accumulation. We examine and contribute to theorizing the mechanisms through which urban governance is financialized, taking as a case study JESSICA, one of the European Union's initiatives to implement an ‘urban sensitive’ policy for sustainable and integrated development. Like other initiatives promoting financialization, JESSICA deploys the logic of finance to select and fund urban social initiatives and development projects on the basis of their potential return on investment (ROI). Understanding this process requires placing questions of political economy—how urban governance is shaped by the broader political‐economic context—with questions of governmentality—how stakeholders are enrolled in and come to take for granted new governance initiatives. Following the multi‐scalar institutional infrastructure is crucial to understanding how this works. Taking a relational multi‐scalar approach, we trace how changes at the supranational scale filter down to shape urban policy selection and performance in Sofia, Bulgaria, where we document how ROI calculations conflict with social welfare priorities. Contrasts between the trajectory of financialization of urban governance in the European Union and the United States demonstrate how this is geographically variegated, shaped by the broader context/conjuncture within which such financialization is embedded.     

Privatization,Financialization and State Restructuring in Eastern Germany: The case of Am südpark

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.     

实体企业金融化对技术创新的影响研究

以2007—2017年中国沪深A股非金融类上市企业为样本,本文研究金融化对企业总体技术创新、突破式创新以及渐进式创新的影响。结果表明,金融化会显著抑制企业不同类型技术创新,且对突破式创新的抑制作用较大。在此基础上,将经济不确定性纳入研究框架发现,经济不确定性增加不仅会扩大金融化对企业不同类型技术创新的抑制作用,且这一抑制作用因企业所有权和所属产业不同而有所差异。其中,对于低创新强度的国有企业和非高新技术企业,经济不确定性增加会扩大金融化对其渐进式创新的抑制作用;而对于高创新强度的非国有企业和高新技术企业,经济不确定性增加则会扩大金融化对其突破式创新的抑制作用。进一步分析不同期限的金融资产投资对企业不同类型技术创新的影响,发现长期金融化会显著抑制企业不同类型技术创新,而短期金融化的影响则不显著。     

关于提高住宅有效购买力的几点思考

随着我国住房制度改革的推进 ,房地产业面临着前所未有的发展机遇。然而 ,几年过去了 ,我们却不得不面对住宅潜在需求和有效需求不足的尖锐矛盾。产生这一现象的原因是多方面的 ,笔者认为最主要的原因在于商品住宅价格偏高、住房金融市场发展缓慢以及住房交易市场不健全三个方面。因此 ,要使住宅产业真正成为消费热点和新的经济增长点 ,就必须努力降低现有商品住宅价格、加快住房金融市场的发展以及完善住房交易市场     

How Did Finance Capital Infiltrate the World of the Urban Poor? Homeownership and Social Fragmentation in a Spanish Neighborhood

When working‐class localities in developed countries are in question, social fragmentation is often analyzed along ethnic lines. Instead, this article claims that it is more critically fruitful to explore fragmentation in terms of people's relations with the state and different forms of capital. It does this by considering housing in Spain as a key resource that connects state policies both with the forms of reproduction and (dis)organization of the disadvantaged, and with the development of real estate and finance capital. First, it unfolds the historical formation of the Spanish ‘homeownership culture’ and the construction–finance complex. Second, starting from an in‐depth ethnography of a peripheral neighborhood in Barcelona, it emphasizes the embeddedness of recent financialization in the livelihood strategies of poor households. Finally, it shows how the process led to a commodification and erosion of those social relations on which it partially depended, thereby exposing problems for class reproduction and fracture lines among the urban poor.