A finance- and real estate-driven regime in the United Kingdom

Abstract

In the literature, it is argued that the Fordist regime of accumulation has gradually been replaced by a finance-driven regime. We argue that the contemporary regime in the UK could be best characterized as a finance-and real estate-driven regime. Like Fordism, the new regime is thought to fuel the economy by propping up consumption, but unlike the Fordist regime it does not seek to do so through job creation or high and steady wages, but rather through private money creation and real estate price inflation. The reliance of the economy on private housing debt rather than public debt-'privatised Keynesianism' (Crouch, 2009)-is a key element of the new regime. The state has not simply facilitated the rise of the new regime but has put its faith in the financial and real estate sectors-both residential and commercial-to prop up the economy. Different layers of the UK government have favoured real estate development and investment, in part enabled by disintermediation and lobbying. For a while, the finance-and real estate-driven regime seemed to create economic growth. Although the regime appeared fragile during the financial crisis of 2007-2009, the neoliberal mode and its accompanying finance-and real estate-driven regime were saved and the dominance of finance and real estate have deepened. This paper is based on the analysis of publicly available statistics, policy and advocacy documents and 39 in-depth interviews with real estate professionals.

Complexity and coordination in London’s Silvertown Quays: How real estate developers (re)centred themselves in the planning process

“…If the aim of a developer is to build their project and maximise profits, then, supporting research on the relational work of developers, the case of Silvertown shows that developers' work is about forming strategic alliances that enable this. These relationships not only facilitate the gathering of knowledge and feed into an increasingly professionalised development scene (Hofman and Aalbers, 2019), but also enable developers to dominate governance situations. In this paper, advancing these arguments I show the next stage of the corporate response: the creation of sub-centres of power which facilitate the developers' capacity to orchestrate development processes.…”

“…As Theurillat and Crevoisier show in a Swiss context, financialisation and the associated role of developers results in them having to develop the capacity to co-ordinate "various specialized development, construction and even management professionals" Crevoisier 2013: 2058). This role of mediator, which often places developers between the state and investors (Hofman and Aalbers, 2019;Theurillat and Crevoisier, 2013), encourages us to turn to Weber's highly influential analysis of Chicago (2002;. Weber has shown how developers in the early 2000s were heavily impacted by relationships with the financial sector.…”

Circular Area Design or Circular Area Functioning? A Discourse-Institutional Analysis of Circular Area Developments in Amsterdam and Utrecht, The Netherlands

“…Herein lies, first, the reason why both the municipalities Amsterdam ( Figure A3, and Utrecht ( Figure A4, 14-34) focus on housing, the latter also on creative industry ( Figure A4, 13-31), within their zoning plans related to circularity. Second, it explains the existence and the conflict between the two discourse variants of circular space as a location from the municipality of Amsterdam, and the circular organization of space from the port of Amsterdam (Figure A3, [10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25]. The conflict between the two discourse-variants in Amsterdam is well illustrated by the recent name change from the port of Amsterdam to the port for Amsterdam [69].…”

“…This is part of the broader transformation from a former Fordist regime of accumulation to a finance-driven regime. In a recent paper, Hofman and Aalbers [10] explain that while within the Fordist regime a government fueled the economy by facilitating job creation and wages, increasingly the government fuels the economy by facilitating private money creation and real estate price inflation [11]. In this paper, we do not go deeper into this matter, but we want to highlight an important consequence for urban development.…”

“…In this paper, we do not go deeper into this matter, but we want to highlight an important consequence for urban development. Especially during the last decade, residential and commercial real estate developments, developments with the highest price per land unit, outcompete other land use such as manufacturing land use, not only within urban areas [10,12]. Considering that especially residential and commercial real estate depend on the surroundings (e.g., safety, green areas, shops), this explains why within many Western cities, space as location is dominant [4].…”