Edited by Markus Moos
Chapter 3: Housing and financialization
The phrase ‘financialization of housing’ suggests that housing is increasingly becoming dependent on finance. Real estate, and housing finance in particular, is not simply one of the many objects of financialization, it is the key object of financialization. The absorption of capital by real estate is one of the defining characteristics of the current financialized, real estate-driven regime of accumulation. In the first part of the chapter, we will focus on homeowners and lenders. We will discuss the rise of mortgage markets by citing international comparative statistics; the twin movement of internationalization and de/re-regulation of mortgage markets that together have pushed the securitization of mortgage loans; and subprime and predatory lending, primarily in the USA. In the second part of the chapter we look at the financialization of rental housing. We refer to the original acquisition of different forms of decommodified and not-fully commodified housing (public, social, cooperative, rent-stabilized and company housing) by private equity firms and hedge funds as the financialization of rental housing 1.0. The subsequent phase 2.0 starts with the conversion to real estate investment trusts (REITs) and publicly listed real estate firms. Housing researchers could contribute to the financialization debate by focusing on three understudied aspects. Firstly, the financialization of and through the state, and of public and semi-public institutions more widely speaking, is one of the research frontiers to be pushed in the coming years. Secondly, the focus on mortgage markets and to a lesser extent rental housing, has blinded us from another important aspect of housing: construction and development. Finally, it is often assumed that financialization processes are less pronounced or advanced in the Global South than in the Global North, but more research is needed to either support or reject these claims.
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