Cracking the housing crisis: financialization, the state, struggles, and rights

Introduction

Since housing turned into a capitalist commodity, it has been directly related and intertwined with economic and political shifts, crises, and shock waves across the globe. The Global Financial Crisis (GFC) of 2007–2008 was a turning point in the history of capitalist crises, which in turn led to a colossal housing crisis. In the subsequent decades, the threat that housing would become merely a commodity for capital exchange rather than the basic necessity of sheltering people became more and more acute. Since the GFC, housing systems have become increasingly volatile, posing a threat to costs of living, and social reproduction; diminishing affordable housing schemes and alternative housing models; and producing new forms of gentrifiable neighbourhood and new models of financialized investment strategies. As part of its supposed role in remedying the housing crisis, the state plays a role as facilitator, market maker, and deliberate developer (Aalbers, 2017a; Beswick et al., 2016; Byrne, 2016; Çelik 2023; Waldron, 2018). Accordingly, states have enacted austerity measures (Christophers, 2017), bailed out commercial and savings banks while setting up bad banks to acquire and manage toxic debt as a policy response to financial crises (Byrne, 2016), and developed and implemented a variety of financial tools to assist the housing market (Mader et al., 2020). Privatization and the abolition of rent controls on social housing are among these changes in policies intended to meet the demands of conventional developers and investors, as well as global corporate landlords who seek to expand the rental and private-home ownership market.

A fast-growing body of literature on the housing crisis has attracted scholars from a wide range of disciplines as they strive to understand diverse reconfigurations in housing markets after the GFC, new tools, and mechanisms in housing finance, the development of newly emerging housing movements, the reconfiguration of housing demands, and how the state’s role in housing provision has changed (Beswick et al., 2016; Byrne, 2016; Çelik, 2023; Waldron, 2018). Housing scholarship has contributed significantly to the grasp of underlying, globalized dynamics of housing crisis’ impacts, complexity and financialized logics of accumulation and dispossession (Christophers, 2023). It has also exposed the ways in which the material and spatial manifestations of individualized indebtedness can be collectivized and fought against foreclosures and evictions (García-Lamarca, 2022). These advancements in contemporary housing scholarship and how it nuances the realities of everyday lives of people point to the need for further research on the housing crisis and responses to it. The impacts of the GFC on housing require a broader analysis, as it highlighted by the vital role of real estate and housing in the accumulation of capital through rent extraction, wealth creation via financialized mechanisms and tools, dispossession, and deepening inequality in access to right to housing, forced, and state/market-led evictions, as well as the emergence of new housing struggles, activism, and alliances aimed at influencing housing policy.

A notable recent development has been the emergence of a literature looking more directly at the impacts of financialization on the violation of housing rights at the individual and collective level. This literature has focused on the lived experience of financialization of land and housing (Garcia-Lamarca & Kaika, 2016; Kaika & Ruggiero, 2016; Rolnik et al., 2019). This has included attention to the biopolitics of debt via mortgage contracts’ direct impact on social reproduction (Garcia-Lamarca & Kaika, 2016) and the creation of new forms of tenure insecurity (Rolnik et al., 2019). Existing literature has served to reveal how moments of crisis carry the potential for more radical strategies of working classes to disrupt the hegemonic forms of housing provision (Fields, 2017a) by the formation of new political subjectivities, which are creating alternatives (Di Feliciantonio, 2017; García‐Lamarca, 2017; Martinez, 2019; O’Callaghan, et al., 2018; Rutland, 2013) and demands (Fields, 2015, 2017b; Schipper, 2015) of a cross-class alliance (Shin, 2018). Thus, this special issue contributes to the literature on the violation of housing rights during a period of rapid financialization of housing, as well as the impact of housing movements, including students, tenants, digitalized and racialized subjects, and mortgaged homeowners, as a response to the financial crisis.

By bringing three perspectives as a lens – financialization, the state, and struggles for rights – this special issue seeks to contribute to a new set of discussions on how the GFC has affected housing and how the measures shaped by the crisis are responded to and impacted by housing movements. This issue brings together eight original articles from a variety of scholars at various career stages, geographical locations, and disciplines that collectively seek to understand the underlying mechanisms of housing movements against financialization and their impact on change in housing policy towards a more equal right to housing. The chosen cases illustrate everyday and organized activism. The articles provide an opportunity to hear activists’ voices in order to create influence within the GFC constraints.

Following a workshop organized by the editor in April 2019, an open call for articles was published in April 2020 to bring the prospect of this special issue to the attention of a wider audience. The call stressed the pervasive effects of the GFC on housing as a global phenomenon, but also on national housing policies and systems, and the potential for housing activism to influence and change the impacts of the crisis from a household to a national level. This volume highlights the impact of financialization and its illumination of the right to housing where it is particularly salient. The financial-led transformation of housing provision at different localities shares similarities not only in the ways of which housing provision is becoming financialized, but also in creating tensions and conflicts between the dwellers, the state, investors, and builders. Additionally, this special issue animates contemporary research on housing movements, campaigns, and protests that have blossomed and contested market-friendly amendments to the housing crisis, even in areas that had not experienced such intense mobilization for many years prior.

Financialization, the state, struggles, and rights

The special issue aims to provide an assessment of the housing financialization process and its impact on violation of the right to housing across the globe since the GFC by bridging the discussions of financialization of housing, the state, and housing struggles and rights. The violation of housing rights has been spotlighted in recent years by the research of United Nations Special Rapporteurs on Adequate Housing (Rolnik et al., 2019) and in the reports of the Centre on Housing Rights and Evictions, which have focused on displacement and eviction as a result of gentrification, privatization, and the new financial tools. Right to housing movements are rooted in earlier critical discussions primarily focused on the structure of the movements (Della Porta & Mosca, 2010) and their goals and achievements (Kuymulu, 2013) from social movements perspectives (Mayer, 2009). While there is significant literature on the right to housing movements, including a recent special issue of Housing Studies focusing on activism in different contexts (Polanska et al., 2019), an empirical and theoretical analysis of the intended or unintended impact of movements under the pressure of financialization of housing remains limited (Martinez, 2019).

The 2008 financial crisis fuelled the discussion on the role of finance on the production of the built environment, and housing, in particular. Financialization has started to be used in a similar vein of using neoliberalization and globalization as a part of mainstream conceptualization (Fields, 2017a), where the role of struggle was minimal in the literature. The financialization of housing is discussed either from a supply-side or a demand-side analysis in the existing literature. The supply-side analysis of financialization of housing has focused on the development of new financial agents and tools by investigating changing funding mechanisms for real estate financial systems, mortgage loans, and securitization (Aalbers 2012, 2017a, 2017b; Pereira, 2017; Fernandez and Aalbers, 2020; Sanfelici & Harbert, 2016; Soederberg, 2015), growth strategies of real estate developers (Sanfelici & Harbert, 2016; Rounet & Halbert, 2016), new national and international programmes for affordable housing production (Gibb, 2015; Klink & Denaldi, 2014; Pereira, 2017), post-disaster redevelopment programmes (Gotham, 2016), international slum upgrading programmes (Jones, 2012), and the role of the state (Gotham, 2009). The demand-side analysis of financialization of housing has emphasized financialization of homeownership (Rolnik, 2013; Palomera, 2014; Soederberg, 2015), the role of homeownership culture (Palomera, 2014), and the marketization of housing rights of the poor (Rolnik, 2013; Soederberg, 2015). This special issue expands the debate about housing financialization beyond an analysis of demand and supply, and examines tensions, cooperation, conflict, and negotiations between the state, dwellers, and capital.

After 2000, the right to housing has received renewed attention from UN institutions and some national governments as housing movements and protests have again ignited with the intensification of housing financialization before and, even more rampantly, after the GFC. The ongoing consequences of the financialization of housing was experienced globally by the 2008 crisis and unfolded its impacts across the world via rising dispossessions, evictions, displacement, and homelessness. One part of the literature has sought to reveal how moments of crisis carry the potential for more radical strategies of the working classes to disrupt the hegemonic forms of housing provision (Fields, 2017a). Although scholars are becoming increasingly interested in housing activism, the focus remains on organized rather than everyday engagement. Many studies portray everyday activists as supporters or ‘clients’ for defence, and therefore their agency is often overshadowed. The findings of a few studies indicate that some participants in housing movements do not consider themselves activists, but rather tenants who are facing eviction and are taking action to prevent it (Baeten et al., 2021). Lancione (2019) draws attention to the everyday activism of evicted Roma households in an effort to show their activist agency in the fight for justice, not only as tenants as supporters of organized activism (see Soaita for another similar argument in this issue). Further, housing activism has been battling against changes in policies and the state at all levels; since the GFC, new forms of resistance have been encountered against financial powerholders as well (Martinez & Gil, 2022). Hence, housing activism after the GFC is discussed as a holistic concept encompassing everyday activism as well as organized housing movements (Kadıoğlu, 2022; Soaita, 2022, in this issue). Furthermore, by discussing the changing conditions of the right to housing in the context of the financial crisis, this collection reveals the gains made by housing movements in combating capital accumulation’s aggressive motivations and effects. While community mobilization in housing struggles is not new, the housing-financial crisis expanded the strategies and tactics of the residents, activists, and the movements that questioned the violations of rights.

The collection of articles shows us that the global expansion of financialization varies in relation to contingencies peculiar to a particular political-economic context, historical structure of housing, the state structure, and the political capacity of people. Three key questions provide a lens for the contribution of the articles represented for the special issue. First, in what ways are modes of circulation of finance capital in housing shifting towards a violation of housing rights? Second, what is the capacity of activism to have a significant impact on the violation of housing rights? How and to what extent everyday activism of tenants and grassroot movements affect housing policy? Third, how do changes in the political economic conditions in different periods and the role of the state in facilitating and market making impact the tactics of housing movements and activism?

Overview of the special issue

This special issue brings together a set of eight articles that examine the financialization of housing and violation of housing rights at the time of crisis by exploring the contemporary state of neoliberal urbanization in divergent political economic contexts.

Kenton Card (2022) presents a rich analysis of how and to what extent tenants affect housing policy based on ten years of discontinuous primary and secondary research that has included embedded participant observation, one-on-one interviews, and content analysis of newspapers, social media, and government records comparing Los Angeles and Berlin. Two case studies illustrate how rapid changes in rental housing policies led to a breakthrough beyond neoliberal treatment of the housing market, and how tenant movements and their allies helped drive policy change across multiple channels. Card argues that there are five mechanisms endogenous to movements that play part in influencing housing policy: making demands, forming coalitions, promoting referendums, engaging government officials in dialogue, and transferring agents into government.

Adriana Mihaela Soaita (2022) conceptualizes the tenants of the private rental sector (PRS) as everyday activists to address the empirical question of what they demand from the government for the PRS to improve. Among lower-income households in booming cities, key tenant vulnerabilities, such as short-term contracts, landlord powers of eviction, and high market rents without regulated increases, are more evident. Soaita’s article gives the stage to the tenants’ voice in shaping their demands by recognizing tenant agency and rethinking the PRS regulation in the UK as a case study, where housing movements became more visible since the GFC. The demands of the tenants are conceptualized as a ‘right to home’, grounded in Lefebvre’s ‘right to the city’. Right to home invites home-ing and democratizing current de-radicalized understandings of the right to housing in order to shape more transformative futures. Soaita’s article expands the scholarly interest in housing activism beyond the organized spaces of militant action towards more concealed activist practices and subjectivities, while paying particular attention to activist talk in the form of tenants’ demands for policy change.

Defne Kadıoğlu (2022) seeks an answer on how racial and territorial stigmatization figures into state-enabled financialized gentrification and how resistance against it unfolds. Thus, the article interrogates the role of state-produced racial and territorial stigma in the gentrification process and its struggles against gentrification. The article makes three contributions: The article discusses the interplay of racialized and territorial stigma as an important ingredient in the current political economy of housing in light of the ongoing discussion of gentrification and financialization. Furthermore, the article contributes to the discussion on state involvement in gentrification by emphasizing the role of the state as a ‘market maker’. In this case, the state plays a role as a producer of stigma, in which stigmatization is part of the market-making process. Furthermore, the article discusses the case of Germany as a country where colonial histories, race, and neoliberal urbanism have been understudied. Consequently, the debate on race, gentrification, and financial capitalism that is primarily conducted in North America is geographically extended. This study shows that despite territorial and racial stigmatization overlapping, at times to the point where they are not distinguishable, the local state intentionally dissociates the place from its people when it wants to fuel gentrification. By allowing activists and residents to be marginalized by oppressive categorizations that normalize gentrification while empowering financialized landlords, selective disassociation trifles resistance: private actors exploit existing inequalities and seize on racialized narratives that are co-produced by the state. Soaita and Kadioglu highlight the resistance form of tenants against gentrification and evictions during the GFC, from different forms of: an organized manner and everyday resistance.

Saila-Maria Saaristo and Rita Silva’s (2023) article examines how housing movements have sought to contest the impact of housing financialization in the Lisbon Metropolitan Area. They use a historical and relational perspective, in which they connect urban struggles to two phases and forms of housing financialization in Portugal: (i) the state’s promotion of homeownership based on household debt (between 1987 and 2011) and (ii) the expansion of the market maker role of the state in favour of foreign direct investment; large-scale capital; and golden visa programmes since the 2007/8 GFC. Saaristo and Silva use the agency of the activists in movements as a lens to analyse different categories of strategies and their effectiveness in creating change. The article utilizes a combination of activist research and autoethnography by focusing on the anti-eviction strategies of Habita Association that defends the right to housing and the city since 2012. In their analysis, Habita’s strategies were categorized as ‘invented’: open struggle and resistance, and occupations; ‘invited’: building rights and policies, and networking with other organizations; and ‘in-between’: consultation, negotiations with state authorities, and campaigning and media presence. They argue that important gains can be achieved through a variety of strategies that take shape to counter financialization of housing. Thus, Habita’s action helped to provide visibility for different housing problems; this visibility to delay or suspend evictions; delaying or cancelling the sales of land and real estate; promoting new policies against the logic of neoliberalization, financialization, and commodification.

Using Dublin as an example, Alice Reynolds’ (2022) article contributes to the literature on rental market financialization. It focuses on the construction of for-profit purpose-built student accommodation (PBSA) and rent increases in Dublin. The article discusses the changes in student housing provision following financialization, as well as the implications for students’ rights to housing. By engaging with the lived experiences of the student housing campaign ‘Shanowen Shakedown’, the article offers a new perspective on the contestation of housing financialization under the state’s central role in facilitating the financialization of student housing that led to the creation of a luxury housing market by the private sector. As a result of an acute housing crisis, the article presents the political outcomes of this campaign. Similarly to Saaristo and Silva, Kadioglu, and Martinez and Gil’s articles in this issue, Reynold’s article illustrates that activism can make a significant difference in improving housing rights. As a result of the campaign, legislation was changed to restrict future rent increases and improve student protections in PBSAs, although no immediate changes were made in financial strategies.

The 2008 GFC severely impacted Spain. Since 2009, several grassroots struggles have questioned the causes of the affordability housing crisis and demanded solutions. The contribution of Miguel A. Martínez and Javier Gil’s article is to the knowledge of grassroots resistance to housing financialization, by examining the interactions between grassroots protest and financial powerholders. In the article, there are two notable cases examined: the campaign against the bailed-out bank Bankia, and opposition to Blackstone, an international investment fund. In both cases, the firms evicted thousands of financially broken homeowners and tenants, with the latter forcing them to pay steep rent increases for their homes. The article focuses on the claims, protest repertoires, and achievements of housing struggles against financial corporations. Thus, the article brings a new angle to grassroots resistance to housing financialization: by showing how housing activism changes over time due to changing structural conditions, namely the political economic conditions of every historical cycle. In the case of Spain, two periods were driven by two different political economic changes: 2008–2013 by austerity policies and 2013–2020 by state-led actions to reignite housing speculation.

The article by Maedhbh Nic Lochlainn (2021) articulates the interconnected digital/material processes involved in understanding housing financialization of the PRS since the 2008 GFC. To demonstrate how digital technologies and platforms are appropriated to resist housing financialization, Lochlainn draws on the literature on urban struggles with financialization. As the author illustrates, in post-crash Dublin, the intertwining of financialization and digital technologies not only provided actors with potential opportunities to maximize rental extraction from housing markets, but these dynamics also provided opportunities for housing activists to take action. A four-year digital ethnography and participant observation of Dublin housing activist groups reveals Lochlainn’s insight into the role digital technologies and logics play: (i) by resolving ‘toxic assets’ and remaking the PRS after the crash, and (ii) by shaping activists’ tactics for resisting and challenging housing financialization in successive waves of financialization.

Jennie Gustafsson (2021) examines the emerging literature on private rental housing financialization, in which landlords adopt a new investment strategy through apartment renovations in order to generate returns on investment. As Gustafsson convincingly demonstrates in her qualitative case study of a neighbourhood in Malmö, this new financialized tool has become a prominent strategy in Sweden. As a result of renovations, landlords are able to extract value from housing while tenants face higher rents as a result of poor property maintenance and unclear information regarding their homes. Gustafsson argues that renovations in private rental housing undermine social welfare states’ traditional right to housing. As a result, such strategies impact households and communities, deepen social inequalities, and result in direct or indirect displacement.

People are finding innovative ways to fight back every year, leading us towards effective resistance that could influence policies, generate alternative housing models, as well as solidarity and non-profit based neighbourhoods to international scale networks, movements, and alliances. One of the most significant developments during the past decade is the emergence of cross-border networks and campaigns against internationalized and/or digitalized financial actors and global corporate landlords, and the capacity of movements to learn from each other and expand their repertoires of collective action. In a world in which financialization of the right to housing is deepening and expanding, housing movements and activism are essential to combating a global housing crisis. As there have been shifts in the political and economic context since the GFC, future research examining the role of movements would explore evolving forms of conflict, dispossession, and exploitation. For example, the impact of conflict on housing within war zones calls for research into decolonial housing networks and novel forms of international solidarity (Vilenica et al., 2024). New urban commoning practices for alternative control of institutions and resources should be investigated for the strategies and mechanisms developed to fight and negotiate for the right to housing. In light of the increase in vacant properties squatted since COVID-19, an intersectional analysis of care and housing movements is necessary.

Acknowledgements

I am grateful to the Swedish Institute for providing the funding for the preliminary workshop on housing rights that brought together some of the contributors to this special issue. I would like to thank all the contributors, editors, and staff at Housing Studies for making this special issue possible, especially Ryan Powell, Hal Pawson, David Robinson, Ed Ferrari, and Marietta Haffner. The reviews of the articles were completed during the COVID-19 lock down, so I would like to extend my sincere thanks to the anonymous referees who critiqued and constructively commented on articles during this time. I would also like to acknowledge all those who submitted abstracts or articles but did not receive acceptance.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

Swedish Institute (Svenska Institutet) Research Grant No: 25755/2018.

Notes on contributors

Özlem Çelik

Özlem Çelik is a senior researcher in the Turku Advanced Studies (TIAS) and the Department of Social Research at the University of Turku. Her research concerns the political economy of urban development and change, with a focus on housing, green and climate financialisation, role of the state, urban social movements and green transitions in the Nordic cities and Turkey.