Governing investors and developers: Analysing the role of risk allocation in urban development

Abstract

This article argues that urban governance, and academic theorisations of it, have focused on the role and strategies of real estate developers at the expense of understanding how investors are shaped by regulatory environments. In contrast, using the case of institutional investment in London’s private rental housing (Build to Rent), in this article I argue that unpacking the private sector and the development process helps reveal different types of risk which necessitate variegated responses from within the real estate sector. In doing so, I demonstrate the complexities of the private sector in urban development, especially housing provision, and the limitations of a binary conceptualised around pro- and anti-development narratives when discussing planning decisions. Instead, I show the multiplicity of responses from within the private sector, and how these reflect particular approaches to risk management. Uncovering this helps theorise the complexities of governing housing systems and demonstrates the potential for risk-based urban governance analysis in the future.

Anticipating demand shocks: Patient capital and the supply of housing

“…This action has to be both preemptive, that is, ahead of budget announcements, and rapidly reactive when policy changes that would adversely impact the market are raised. To govern the actions of investors, not just developers of housing for the for-sale market, requires recognising the different temporalities and risks actors involved in urban development work with (Brill, 2021; Geva and Rosen, this issue). As such, to govern patient capital, regulators must adopt a similar patient planning approach that reflects a long-term target and enables market regulation to mirror market attitudes towards income generating assets.…”

Introduction to special issue on the governance of residential investment

“…Through a deliberative and concise reading of the particularities of investment actors and strategies across often very diverse housing systems and cultures, we reveal the multiplicity of meanings ‘investment’ has and examine the importance of recognising this in future research. This helps inform a more precise understanding of what investors are looking for (see Özogul and Taşan-Kok, 2020) and therefore enables a more adaptive governance structure that uses a better informed analysis to pinpoint regulatory mechanisms (Brill, 2021). Second, we explore the range of ways in which governments are engaging with changing landscapes of housing finance.…”

From homes to assets: Transcalar territorial networks and the financialization of build to rent in Greater Manchester

“…Housing assets, like any other form of collateral for financial markets, have the capacity to support a variety of financial actors with different risk appetites and return outlooks (Özogul and Taşan-Kok, 2020). Different blocs of financial actors may come to dominate real estate asset financing at certain discrete moments; and their preferences may shape the processes and outcomes of financialization at an urban scale, particularly when development projects are shaped by negotiations over viability and other localised agreements (Brill, 2021; Raco et al, 2019). A cluster of recent studies focusing primarily on the boom in rental residential investment have highlighted the different financial strategies available to rental housing investors, including rent increases in ‘prime’ locations, and opportunistic disinvestment and gentrification-led upgrading in more marginal areas (August, 2020; Bernt et al, 2017; Fields and Uffer, 2016).…”