Milan makes it to the big leagues: A financialized growth machine at work

Abstract

This article analyses the production of urban space in the globalizing city of Milan, Italy. The authors present the evolution of a 30-year development process in a semi-central area of the city known as Garibaldi Porta Nuova, contrasting present and past conditions. Initial attempts to develop the area began in the early 1980s but came to nothing; a previous study of the same area attributed that failure to the inability of fragmented local political elites to coalesce into an effective pro-growth coalition. In the early 2000s, a new coalition of political and economic actors, in particular financial and real estate interests, revived the process of regeneration and drove construction of a large-scale mixed-use project. This article offers an account of the process in terms of both the internal dynamics of the local coalition and the contextual and institutional factors framing the bargaining of political and economic elites over the development process. We use two theoretical frameworks – growth machine theory and regime theory – to assess the distribution of power and resources. Our analysis indicates that the outcome is the result of a specific growth machine fuelled by international capital, and that changes in the intergovernmental system in Italy induced local political elites to accommodate the requirements of international investors.

When large-scale regeneration becomes an engine of urban growth: How new power coalitions are shaping Milan's governance

“…Usually accomplished through PPPs, large-scale development projects are indeed deeply ‘embedded in frames of multi-actor and multi-level governance’ (Salet, 2008) and, thereby, are important fields in which political and economic actors gain the power to (Stone, 1993) orient urban development (Swyngedouw et al, 2002). Furthermore, financialisation scholars see them as engines of financial markets (Savini and Aalbers, 2016; see also Anselmi and Vicari, 2020; Ward, 2019; Adisson, 2017; Guironnet and Halbert, 2014; Guironnet et al, 2015; Kaika and Ruggiero, 2016), thus presenting the idea that they are ‘increasingly developed with an investor rather than a user in mind’ (Aalbers, 2019).…”

“…New players (e.g. insurance companies, mega developers and industrial groups converted to finance and real estate) entered the Milanese real estate market, thus replacing local operators and constructors (Anselmi and Vicari, 2020; Pasqui, 2019; Kaika and Ruggiero, 2016; Savini and Aalbers, 2016; Memo, 2010). The arrival of these players represented a further challenge for public regulators as they were poorly equipped in terms of technical and financial expertise.[Our offices] were understaffed and sometimes had trouble bargaining with private developers, especially when tracking their contribution for public amenities (Interview with senior local politician – Authors’ translation)…”

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

“…Unpacking the role of new forms of finance, research broadly built around the concept of financialisation has sought to demonstrate the strategies of ‘new’ forms of investment in housing, revealing their power and capacity to shape development outcomes across contexts (see Beswick et al, 2016). Research has shown how investor–developer relationships are unstable and change over the course of a project (Sanfelici and Halbert, 2016), as well as the governance of financialised forms of real estate (Anselmi and Vicari, 2020). More recently, shifting the focus towards investor–developer interactions in the rental sector, research has called for a more thorough engagement with purpose-built rental housing or BTR (Nethercote, 2020).…”

“…This has highlighted the ways in which particular regimes of governance have enabled a financialised real estate market, especially in commercial or mixed-use developments (see e.g. Anselmi and Vicari, 2020). Building on this work by focusing on institutional investors and their strategies, and specifically how these relate to the developer–investor relationship(s), I demonstrate what the division of risk between different actors throughout the development process means for local governance, particularly planning legislation, which I argue is deemed largely irrelevant by investors.…”

Seeking polycentric post-suburbanization: a view from the urban region of Milan

“…A number of scholars have deeply investigated history and key issues of spatial planning in Milan (Campos Venuti et al, 1986;Oliva, 2002). Other contributions analyzed the contemporary changes of the city from different angles facing social, spatial and governance transformations (Anselmi & Vicari, 2019;Armondi & Di Vita, 2017;Bricocoli & Savoldi, 2010;D'Ovidio & Ponzini, 2014;Pucci & Colleoni, 2016;Saporito, 2016;Vicari & Molotch, 1990). With reference to the urban region, Milan has experienced an outright process of metropolization since the early 1900s and in the Second postwar period (Balducci et al, 2017), which has few equals in Italy.…”