“Revenue Generating Machines”? London’s Local Housing Companies and the Emergence of Local State Rentierism

Abstract

Since 2010, faced with deep austerity measures, 27 London councils have set up a housing company to acquire, develop, and manage housing. Following 40 years of privatisation, these council‐owned companies have been celebrated as a post‐neoliberal municipal alternative to the hegemony of market‐led urban policy. By developing commodified real estate and monetising rising land values, they promise to deliver well‐designed housing, generate long‐term fiscal rents, and secure local state autonomy. Drawing on in‐depth empirical research, this paper develops a situated political economic critique of the limitations, contradictions, and risks of local housing companies in London. Framed as a “critical case”, providing insight into the politics of speculative urban provisioning and land value extraction, I argue that local housing companies represent a mode of municipal statecraft—a local state rentierism—that leans into and reproduces a political economy of financialisation and rentierism with potentially long‐term implications for collective urban provisioning.

Introduction to special issue on the governance of residential investment

“…For Geva and Rosen (2022), there are also moments of positivity that can be taken from their analysis, uncovering a state’s attempt to reconcile institutionalised neoliberalism and a focus on market-led delivery, with more socially minded approaches. As the role of arms-length organisations operating in spaces that straddle within, between and outside the state grow in their involvement in housing delivery globally (see for example, Penny, 2021), these cases demonstrate tensions in state capacities and strategies, especially those that emerge when confronting a long history of working in particular ways. More progressive or socially attendant ways of operating are therefore circumvented by existing structures and systems (Brill et al, 2022; Geva and Rosen, 2022), yet there remains spaces of hope and a clear sense of regulatory (political) duty.…”

“They had already sold”: Uncovering relations among the local state, the market and the public in the case of municipal housing privatization in Rosengård, Sweden

“…Recent writings on local state power (of which some are referenced above) situate the urban politics of late entrepreneurialism within variegated geographies (e.g. Beswick and Penny, 2018;Ormerod and MacLeod, 2018;Penny, 2021;Weber, 2021). This body of work emphasizes how local governmental bodies and actors are embedded in the wider political economy, internalizing social conflicts and contradictions while simultaneously pushing for certain place-bound interventions.…”

“…Consequently, the possibility of public interests being represented in the use of land and housing becomes constrained in the present but also in the future as the privatization or internalization of marketized or financialized logics open up the possibility of exposure to external pressures and volatility (Ashton et al, 2016;Beswick and Penny, 2018;Penny, 2021). Subsequently, while the new municipal housing legislation from 2011 reinforced the marketization of the municipal housing sector, this paper's perspective is that municipal housing ownership still matters, partly because of the social responsibility still ascribed to the sector but also because of the possibilities tied to this ownership.…”

“…Importantly, these relations comprise of several contradictions, through which entrepreunerial municipal statecraft is formed (cf. Penny, 2021).…”

“…Third, addressing the salient political-economic writings on the local state (see e.g. Ormerod, 2017;Penny, 2021;Peck and Whiteside, 2016), the paper contributes with conceptual development of the interrelation of local state and market, as an expression of urban governance, by emphasizing the need for a parallel engagement with the local state's relations with the public as these relations are intimately bound with political-economic changes. Hence, inspired by Ormerod's (2017) emphasis on the political effects on the public in her work on housing and the local state, I engage with the function of public assets and with tenants' and residents' perceptions of privatization and urban renewal.…”