Over the last few decades, the financialization of real estate has transformed financial geographies by clustering property investments in major cities worldwide. Thus, financialization has enhanced the real estate industry through... more
Over the last few decades, the financialization of real estate has transformed financial geographies by clustering property investments in major cities worldwide. Thus, financialization has enhanced the real estate industry through sophisticated financial and regulatory devices enabled by States. In Milano (Italy), central, regional, and local governments have supported the financialization of real estate, slightly empowering the influence of global players involved in the management of property assets along with an ‘enabling attitude’ in urban development. The Italian austerity and the limited spending capacity of the local governments place financialization as a relevant lever to stimulate private property operations and market-led policies in Milano. Through an in-depth literature review and policy analysis, as well as semi-structured interviews, this article operationalizes the role of State planning in enabling the Milanese property market operations, addressing some recommendations on how to redirect its function in a context of growing financialization.
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1. Introduction. 2. Two main observations on the Lombard governance. 3. The framework of cohesion policies in the Lombardy Region. 4. European programming PR 21-27 in Lombardy. 5. Early results of sustainable urban development strategies... more
1. Introduction. 2. Two main observations on the Lombard governance. 3. The framework of cohesion policies in the Lombardy Region. 4. European programming PR 21-27 in Lombardy. 5. Early results of sustainable urban development strategies addressed by PR 21-27. 6. Conclusions and recommendations.
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This article deals with the effects of COVID-19 on the urban governance of Milan. The author argues that, despite the changeable situation still ongoing, looking at the measures assumed in 2020, the Municipality of Milan took middle-term... more
This article deals with the effects of COVID-19 on the urban governance of Milan. The author argues that, despite the changeable situation still ongoing, looking at the measures assumed in 2020, the Municipality of Milan took middle-term strategies and radical decisions for the design and the use of the city from a perspective of sustainable prosperity together with the pandemic management. According to the “Milano 2020” Adaptation Strategy, several policies were adopted in order to decongest public areas through the enlargement of spaces and services. In particular, during that period, the administration planned new policies in order to empower urban flexibility, rhythms and times, diversified mobility, public and green spaces, infrastructures, cooperation, and inclusion. In conclusion, the author argues that the pandemic has redefined the urban prosperity of Milan in relation to the sustainable transition and the new social challenges determined by the global scenario.
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This article deals with the effects of Covid-19 on the urban market, in relation to the case of Milan. The author argues that, despite the unstable situation still on going, looking at the data of 2020 the impact had not been enough... more
This article deals with the effects of Covid-19 on the urban market, in relation to the case of Milan. The author argues that, despite the unstable situation still on going, looking at the data of 2020 the impact had not been enough intense in order to determine a fatal trade collapse, therefore the confirm of the lines of access to credit and of investments located on huge urban transformation areas let Milan in the conditions for keeping its role of international attractive market, consolidating its financialization processes. Based on this scenario, the author argues that the pandemic emergency had accelerated the process of professionalization of the developers, in a way which is always more specialized and finalized to a better competitiveness in the global scenario. In conclusion, although the rise of specialized developers has led to a change in the real estate and urban scenario and processes, the capitalist paradigm of economic development of cities seems to persist despite the epochal event of the pandemic.
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Since the financial crisis of 2008/09, the “financialisation of housing” has become a buzzword widely used within and outside academia to describe economic and structural changes in the housing market. One of the most visible dimensions... more
Since the financial crisis of 2008/09, the “financialisation of housing” has become a buzzword widely used within and outside academia to describe economic and structural changes in the housing market. One of the most visible dimensions of this “financialization” is the growing presence of institutional investors as property owners in manifold cities across Europe. This trend has come along with a burgeoning housing affordability crisis that affects at new households in major cities. While housing is placed again under pressure, new questions arise in relation to the role of institutional investors as active agents of housing supply. There is no clear evidence of how institutional investors affect local housing markets and how they relate to housing affordability pressures in each city. Additionally, little is known about how housing policies and politics engage with institutional investors as novel housing actors and which are the challenges faced in housing policy development. To shed light on these questions that still remain underresearched, we have selected seven cities that vary significantly in terms of rental systems and market dynamics, housing policies and provision to examine the different, thus the city-specific effects of this general trend across Europe.
The financialization of housing has already become a major issue in urban and housing studies and research has disclosed the growing relevance of institutional investors, financial motives, financialised management and calculation techniques in the transformation of housing into an asset class (Gabor & Kohl 2022; Wu et al., 2020; Fernandez & Aalbers, 2020; Aalbers et al., 2020). However, after more than 15 years of interdisciplinary research it has become clear that the term "financialisation" is developing as a relatively imprecise umbrella for a broad variety of topics. We tender that the actual “doing” of financialization is highly context-bound, defined by spatial and temporal local particularities and, as such, subject to an immense array of variations. For example, while in Germany and Sweden institutional investors have been buying up entire housing estates and formerly public housing companies, in other cities of central and eastern Europe real estate investment trusts or real estate funds are gaining a foothold in niche markets such as care facilities, student dormitories or micro-apartments. In Spain and Ireland, and more recently, in Greece financialization is often discussed in relation to debt management and the securitization of Non-Performing Loans (NPLs). In our study, we explore these differences and describe the variety of ways in which institutional investors have established themselves in European cities.
The chief aim of our study is to shed light on the role and strategies of institutional investors in local housing markets. First, we trace how institutional investors approach local housing markets in seven different countries. Second, we explore how institutional investors' activities enmesh with the provision of affordable housing. Third, we reflect on the local specificities and the way institutional investors become embedded in local real-estate markets to consider why investment strategies differ significantly amongst cities and, therefore, we disclose the different gateways in the cities under study. In doing so, we highlight the role of local context in the path-dependency of the financialisation of housing. A fourth focus is on the interplay between institutional investors, policy actors and governments. We assume that in a highly regulated field such as urban and housing policy, different forms of exchange and cooperation between institutional investors and local policy actors emerge in each case, reflecting local specificites and dynamics.
To address the above, we have chosen a comparative case study design. Moving away from a conventional comparative approach of identifying similarities and differences, we aim at teasing out how the general restructuring of financialised housing is continuously restructured and reshaped by local dynamics. This helps disclose the path-dependency of housing finanicialisation across seven cities. In other words, it is not only the generic trend of housing financialisation that shapes local housing markets, but local circumstances that define the process of housing financialisation in each case. As such, in this comparative approach we bring together cases that represent different rental systems, different ideologies of housing provision, policies and planning and different market dynamics to explore how the contigent trajectories of housing financialisation are defined by local dynamics and how institutional investors reshape their strategies to adjust and/or accommodate to local circumstances.
To shed light on the role of institutional investors as key actors in the finanicalisation of housing against the background of different local contexts, seven case studies were selected to offer key information on the structure of the housing markets and the current challenges for affordable housing supply. For this, London, Brussels and Milan are selected as cities with a traditionally ownership-centered housing market and in the case of Brussels and Milan with a weak social housing sector and weak rent regulations. This is to some degree also the case of Warsaw where the housing market transitioned from a planned economy to a “super homeownership society” with a peculiar mix of housing rights and a lack of regulation. This contrasts Malmö and Berlin, two cities that were at least in the past characterised by very strong regulation of the private market and a strong non-profit sector. Athens stands as a case of extreme austerity, indebtedness and impoverishment of the local population, forming a very specific environment for the financialisation of housing.
The case study chapters that follow analyse the activities of institutional investors and describe their role in the supply of affordable housing. Additionally, the political and planning instruments which cities employ vis á vis institutional investors are presented. Of particular interest, are the forms of public-private collaboration through which city planners and policy-makers interact with institutional investors. The presentation of the seven case studies is followed by a cross-case summary in which the comparison of the strategies and tragectory of institutional investors is used to identify the path-dependecies of housing financialisation, and the way local contingencies work out the interaction between investors and the political-administrative system. The impact of institutional investors on housing affordability is a recurring theme underlying the queries under scrutiny.
The work presented here is the outcome of a six-month project which was financed by Science Po Paris and included scholars from Athens, Berlin, Brussels London, Malmö, Milan and Warsaw. It has built on the long-term engagement of the participating scientists with their respective cities and a highly developed expertise in the housing conditions, market dynamics, planning regulations and policy issues in different contexts. Nevertheless, the study has an explorative character. It provides first hand ideas about the different financial logics across Europe which need further examination.
The financialization of housing has already become a major issue in urban and housing studies and research has disclosed the growing relevance of institutional investors, financial motives, financialised management and calculation techniques in the transformation of housing into an asset class (Gabor & Kohl 2022; Wu et al., 2020; Fernandez & Aalbers, 2020; Aalbers et al., 2020). However, after more than 15 years of interdisciplinary research it has become clear that the term "financialisation" is developing as a relatively imprecise umbrella for a broad variety of topics. We tender that the actual “doing” of financialization is highly context-bound, defined by spatial and temporal local particularities and, as such, subject to an immense array of variations. For example, while in Germany and Sweden institutional investors have been buying up entire housing estates and formerly public housing companies, in other cities of central and eastern Europe real estate investment trusts or real estate funds are gaining a foothold in niche markets such as care facilities, student dormitories or micro-apartments. In Spain and Ireland, and more recently, in Greece financialization is often discussed in relation to debt management and the securitization of Non-Performing Loans (NPLs). In our study, we explore these differences and describe the variety of ways in which institutional investors have established themselves in European cities.
The chief aim of our study is to shed light on the role and strategies of institutional investors in local housing markets. First, we trace how institutional investors approach local housing markets in seven different countries. Second, we explore how institutional investors' activities enmesh with the provision of affordable housing. Third, we reflect on the local specificities and the way institutional investors become embedded in local real-estate markets to consider why investment strategies differ significantly amongst cities and, therefore, we disclose the different gateways in the cities under study. In doing so, we highlight the role of local context in the path-dependency of the financialisation of housing. A fourth focus is on the interplay between institutional investors, policy actors and governments. We assume that in a highly regulated field such as urban and housing policy, different forms of exchange and cooperation between institutional investors and local policy actors emerge in each case, reflecting local specificites and dynamics.
To address the above, we have chosen a comparative case study design. Moving away from a conventional comparative approach of identifying similarities and differences, we aim at teasing out how the general restructuring of financialised housing is continuously restructured and reshaped by local dynamics. This helps disclose the path-dependency of housing finanicialisation across seven cities. In other words, it is not only the generic trend of housing financialisation that shapes local housing markets, but local circumstances that define the process of housing financialisation in each case. As such, in this comparative approach we bring together cases that represent different rental systems, different ideologies of housing provision, policies and planning and different market dynamics to explore how the contigent trajectories of housing financialisation are defined by local dynamics and how institutional investors reshape their strategies to adjust and/or accommodate to local circumstances.
To shed light on the role of institutional investors as key actors in the finanicalisation of housing against the background of different local contexts, seven case studies were selected to offer key information on the structure of the housing markets and the current challenges for affordable housing supply. For this, London, Brussels and Milan are selected as cities with a traditionally ownership-centered housing market and in the case of Brussels and Milan with a weak social housing sector and weak rent regulations. This is to some degree also the case of Warsaw where the housing market transitioned from a planned economy to a “super homeownership society” with a peculiar mix of housing rights and a lack of regulation. This contrasts Malmö and Berlin, two cities that were at least in the past characterised by very strong regulation of the private market and a strong non-profit sector. Athens stands as a case of extreme austerity, indebtedness and impoverishment of the local population, forming a very specific environment for the financialisation of housing.
The case study chapters that follow analyse the activities of institutional investors and describe their role in the supply of affordable housing. Additionally, the political and planning instruments which cities employ vis á vis institutional investors are presented. Of particular interest, are the forms of public-private collaboration through which city planners and policy-makers interact with institutional investors. The presentation of the seven case studies is followed by a cross-case summary in which the comparison of the strategies and tragectory of institutional investors is used to identify the path-dependecies of housing financialisation, and the way local contingencies work out the interaction between investors and the political-administrative system. The impact of institutional investors on housing affordability is a recurring theme underlying the queries under scrutiny.
The work presented here is the outcome of a six-month project which was financed by Science Po Paris and included scholars from Athens, Berlin, Brussels London, Malmö, Milan and Warsaw. It has built on the long-term engagement of the participating scientists with their respective cities and a highly developed expertise in the housing conditions, market dynamics, planning regulations and policy issues in different contexts. Nevertheless, the study has an explorative character. It provides first hand ideas about the different financial logics across Europe which need further examination.