The Financialization of Housing and Its Political Consequences

Abstract

Institutional investors in residential real estate have become targets of political backlash against unaffordable housing. We argue that this backlash is not only about economic issues such as rising rents; it reflects a fundamental rejection of "financialized capitalism" that turns housing from a basic need into a speculative asset. Using novel geo-coded real estate transaction data, we document the extent of housing financialization cross-nationally and over time, and demonstrate that neighborhood-level exposure to financialization alone is insufficient to explain the widespread support to expropriate corporate landlords in a historic 2021 Berlin referendum. We then develop nationally-representative surveys to show that German citizens conceptualize housing as a social right and hold the state responsible for its under-provision. We demonstrate experimentally that arguments about housing financialization significantly raise support for expropriation beyond rent effects. Our findings suggest that financialized capitalism can unite diverse groups of voters in favor of housing socialism.