The political economy of mortgage securitization and the neoliberalization of housing policy in Canada

Abstract

The Canadian case represents a distinct variety of financialization under capitalism, one conditioned by the structure of its mortgage markets and the dominant role played by the state in the process of mortgage securitization. Securitization has been a key component of the neoliberalization of housing policy, with new state roles in the insuring, directing and funding of residential mortgage-backed securities both undergirding and justifying the federal shift from the provision of social rental housing toward supporting a rental market increasingly characterized by private sector individualunit landlord-investors. It was primarily the state's control over, and utilization of, the securitization process that maintained the solvency of the financial system in the face of the global financial crisis. However the resulting rapid uptake of liabilities on behalf of both the state and households brought forth new contradictions, necessitating new policy experimentation and reregulation, to which securitization was once again directed and which now articulate the political economy of housing in the country.

Collaborative Governance for Affordable Housing in Toronto and Melbourne

“…The shift from senior governments exerting 'command and control' for public goods, to a less efficient and poorly controlled set of funding relationships with local governments, private and non-profit providers, has been analysed as a contributory factor to increasing social inequality. In the case of housing, these indirect partnerships in the face of growing 'marketisation' of affordable housing has been described by many researchers as a case study of failure to secure a basic right (see Walks & Clifford (2015), and Kalman-Lamb (2017) for Canada; Mullins, Milligan & Nieboer (2018) and Power & Bergan (2018) for Australia).…”

Subterranean Commodification: Informal Housing and the Legalization of Basement Suites in Vancouver from 1928 to 2009

“…Increased house prices—buttressed in part by suites—in turn fit into broader issues of over‐investment. A central part of the neoliberalization of Canada's housing policy landscape has been a loosening of lending standards facilitated by the government's mortgage‐backed securities programs (Walks ; ; Walks and Clifford, ). Households now acquire larger amounts of debt than they would otherwise have been able to afford, resulting in an emergent urban ‘debtscape' (Walks, ).…”

Capital Market Union and residential capitalism in Europe: Rescaling the housing-centred model of financialization

“…Mortgage securitization is a US state invention (Gotham, 2009; Immergluck, 2009, and research has demonstrated that the roll-out of securitization to other markets and countries has required an active role for the state in restructuring housing finance and establishing viable secondary mortgage markets (Aalbers et al, 2011; Wainwright, 2009, 2015; Walks and Clifford, 2015. In historical perspective, the CMU is the next step in the rolling-out of securitization.…”