Unwilling Subjects of Financialization

Abstract

This article seeks to advance debates about the financialization of housing by focusing on the emergence of rental housing as a frontier for financialization, a dynamic that is increasingly relevant since the global financial crisis. Situated in New York City, the research focuses on an aggressive wave of investment in affordable rent-stabilized properties by private equity firms, their efforts to release value from these properties, and the implications of the 2008 financial crisis for their investment strategies and thus for tenants' experience of home. Through detailed empirical analysis tracing the connections between how rental housing has been constituted as a new site for private equity investment globally, the local conditions facilitating this process in New York and how it reshaped everyday life for tenants, the article theorizes tenants as unwilling subjects of financialization. Yet unwillingness does not necessarily translate into being overtaken; it also connotes reluctance and indeed struggle. This novel conceptualization highlights the ways in which financialization meets with dissent, and its necessarily contingent and incomplete nature. The article therefore develops the wider intellectual project of understanding financialization not as a monolithic and inevitable process, but as one characterized by resistance from without and contradiction from within.

Urban struggles with financialization

“…The case of a wave of highly leveraged private equity buyouts of affordable rental buildings in New York City undertaken during the mid‐2000s real estate boom demonstrates how the failure of speculative investments creates space to make finance knowable. When the 2008 financial crisis led private equity owners to default on unsustainable mortgage obligations, properties deteriorated rapidly, exposing tenants to hazardous living conditions (Fields, in press; Teresa, ). Community organizations mobilized public data on housing code violations and property liens to develop a new indicator of housing distress (Teresa, ).…”

Geographies of hyper‐commodified housing: foreign capital, market activity, and housing stress

“…‘As real estate has become more amenable to capital flows, capital flows have also been rescaled’, Fields argues (, p.4), before suggesting not only that ‘real estate is easily transformed into a liquid and tradable commodity, [but that] capital can also shift “in and out of different types of market in different corners of the globe”’ ( ibid , citing Schoenberger , p.431). As such scholarship shows, both the commodification and financialization of housing have clear spatio‐temporal dimensions that exceed the nation state (Aalbers, , , ; Fields, , ).…”

Demolishing the Present to Sell off the Future? The Emergence of ‘Financialized Municipal Entrepreneurialism’ in London

“…Second, we contribute to an emerging literature concerned with the financialization/state nexus--'a key research frontier to be explored in the coming years' (Aalbers, 2017: 55)--by providing new evidence of the role of the state in processes of financialization: more than the facilitator and enabler of financialization, Lambeth Council is its active executor, constituting public housing estates as new sites of extraction for financial capital. Third, we evidence further permutations of capital market involvement in new residential spaces, broadening our understanding beyond owner occupation and contributing to the nascent literature on rental housing as 'an important new node for financializing projects globally' (Fields, 2017: 588; see also Aalbers, 2017). Finally, we situate the developments in contrast to earlier modes of entrepreneurialism, exploring a distinct mode of entrepreneurial governance in London in which the local state is no longer limited to providing strategic oversight to the private sector, but rather initiates financialization in order to develop its fiscal and political capacity to intervene in the housing market.…”

“…By assuming the role of speculative property developer, viewing its land as a quasi‐financial asset, and creating innovative portals for financial capital to access public housing, Lambeth has constituted its public housing stock as a proto‐asset class for global institutional investors. The article has provided further evidence of the expansion and permeation of financial sector involvement in housing generally—confirming rental housing as ‘an important new node for financializing projects globally’—and non‐market housing specifically as a ‘frontier for financialization’ (Fields, : 588).…”

“…HfL, and the SPV model more generally, enables public housing to be remade as an asset class, similar in many respects to public infrastructure and capable of absorbing substantial portions of the global pool of liquid assets—the ‘wall of money’ (Fernandez and Aalbers, )—seeking stable, secure real estate investments in a post‐crisis investment landscape. Unlike other types of rental housing financializations (Fields, ; ; Fields and Uffer, ), public housing is emerging as an attractive investment characterized by its low risk profile and reliable underwriter (the state), and as such is akin to infrastucture.…”