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ABSTRACT
Housing financialization research has aimed at explaining the links between financial macrodynamics and urban phenomena. But as this article argues, a focus on the Global South’s variegated trajectories demands both a consideration of the effects of the subordinate character of financialization in these economies and an attentive look at the changing coalitions pushing for new financial reforms. In this article, I take the case of an urban–financial coalition in Argentina responsible for setting up a new housing finance system revolving around inflation indexed mortgage loans. By looking at developers’ associations’ key role in coproducing consensus over indexed loans despite hyperinflation, I highlight the importance of studying the stability of the coalition to better comprehend housing financialization and the contradictions arising when attempting to subsume housing credit to the logic of finance capital—that is, creating a financialized financial infrastructure—in unstable financialized economies. The findings of this article are based on a macroanalysis of the major transformations in the real estate and financial sectors in Argentina and a microanalysis of developers’ collective action.
Acknowledgments
I would like to thank the anonymous reviewers and the guest editors for their insightful and detailed comments. Earlier versions of this work were presented at different academic and activist events where important questions were raised that helped me improve the main arguments of the article. Space constraints prevent me from mentioning every one of the colleagues and friends who read draft versions and provided invaluable comments, but I would like to express to all of them my gratitude for their generosity.
Disclosure Statement
No potential conflict of interest was reported by the author.
Notes
1. The term was used in Argentina’s case in 2018 after 3 consecutive years of high inflation and following generally accepted accounting principles.
2. See Socoloff (Citation2019), Banzas and Fernández (Citation2007), Royer (Citation2016), and Soederberg (Citation2015).
3. Except in the cases of Chile, on the one hand, and those of Mexico and Brazil where public funds are at the base of housing financialization.
4. As many authors have criticized, it is difficult on the one hand to define its limits in terms of spatial scale, temporal scope, and agents actively involved in it (Cox, Citation2017; Gottdiener & Hutchison, Citation2006, pp. 80–81; Stone, Citation2015); particularly when it comes to extralocal actors or financial institutions (Aalbers, Citation2013). On the other hand, to argue for a preponderance of state agents/action or private agents/action (or a mix of them) in boosting reforms is debatable, inevitably leading to discussions over relative autonomy and embedded autonomy. Furthermore, it is difficult to account for what keeps the coalition together: if it is their class interests (Castells & Godard, Citation1974; Harvey, Citation2013) and the accumulation strategies of property developers (Cox, Citation2017), a set of shared interests that are coproduced in/through action (Stone, Citation1989, Citation1993), a certain (socio)spatial dependence (Cox & Mair, Citation1989; Gottdiener & Feagin, Citation1988), or shared ideas/rationalities/conventions that are negotiated and circulated through people and/or technical devices (Sanfelici & Halbert, Citation2015; Weber, Citation2015). Finally, a methodological concern persists regarding how to approach coalitions empirically, if they happen through “informal cooperation” (Stone, Citation1989, pp. 5-9) and therefore leave no trace (see Bourdieu, Citation2000; Logan & Molotch, Citation1987, pp. 84–85).
5. Interviews were around one hour long and developers were asked to reflect on general issues of the real estate sector in Argentina, their views on policies (such as land and credit) and the role of the associations in promoting the growth of the real estate sector.
6. To date, there is no information available regarding the distribution of these loans by income. But we do know that 16.7% of the granted amount of all mortgage loans between January 2016 and May 2018 received some sort of subsidy from the state (Di Santi & Slipczuk, Citation2018).
7. It should be noted that according to the same census, almost 2.5 million houses (18% of the stock) remain unoccupied in Argentina.
8. Both public and private banks have been providing these loans. In addition, some public housing institutions at municipal and provincial levels have started to subsidize a part of the capital of these loans that are managed by public banks and/or to provide subsidized UVA loans to poor families with their own resources outside banks.
9. It is indexed by the CER (coeficiente de estabilización de referencia in Spanish), an index that reflects the daily variation of the monthly evolution of the Consumer Price Index.
10. According to Investopedia, payment option adjustable-rate mortgages can allow deferred interest to accumulate, meaning the total owed by the borrower can escalate.
11. Outside this coalition during those years, there were the banks and bank organizations (except in the case of the Banco Ciudad, controlled by local government) as well as national authorities.
12. Specifically, I have found: (a) a document prepared in 2003 by the technical team organized by Ernesto Gaba (a former member of the Central Bank and former IMF official, who was in charge of the Research Department of BBVA–Argentina) called “Indexation in Chile and its possible application in Argentina”; (b) a text in the press in which a former official of a public bank recounted the experience of a unit of account implemented in the early 1980s in the Province of Buenos Aires; and (c) an intervention at a congress on housing loans organized by the Central Bank in November 2007 where its final speaker (Ricardo Arriazu, a former IMF official) drew attention to the need for a “unit of account” (La Nacion, 28/11/2007).
13. According to the press, the book was presented to every construction association, urbanist and architects’ professional organization and to authorities at national, provincial, and local levels, as well as unions (Inmobidiario, 10/05/Citation2009).
14. Whereas the CEDU is composed of the 20 real estate holdings that gather the highest segment, the AEV comprises approximately 100 firms, including some large- and mid-size real estate firms but also small construction companies (none of which is listed). In contrast, the CAC is one of the largest and most powerful chambers in Argentina, and includes construction firms of all types and sizes.
15. The Acta de la Vivienda was signed at Expo Real Estate 2014. It included the signatures of the presidents of Colegio Profesional Inmobiliario, Cámara Inmobiliaria Argentina, Sociedad Central de Arquitectos, Colegio de Martilleros y Corredores Públicos del Departamento Judicial de San Isidro, the Spanish Chamber of Comerce, the AEV, and AVE–de la Provincia de Santa Fe. Additionally, it was signed by politicians and the CEDU.
16. Together with current Assistant Housing Secretary Ivan Kerr, they designed Mi Casa BA, which included a form of indexation in down payments. For Kerr, the plan “is undoubtedly a successful policy that guarantees greater social inclusion and benefits those in need. But, at the same time, it also aims to be a solution for the private investor who wants to maintain the stable value of their savings; trying simultaneously to be a strong incentive for private investment to enter the segment of middle class housing construction.” (Kerr, 31/07/2013).
17. It is striking to note that none of the major banking associations (the Association of Banks of Argentina, ABA, and the Association of Argentine Banks, ADEBA) designed any plans related to housing finance. Oriented as they were to short-term consumer loans (Bebczuk, Citation2007), they were not interested in any form of long-term commitment. Some bank representatives issued opinions, among which Santander Río’s credit and investment manager said: “In order to have a mortgage market, we need investment funds to unload mortgage portfolios, which gives liquidity to the market in the long term” (La Nación, 01/12/2007).
18. Some developers got traditional credits not valued in UVA granted by Banco Nacion and Banco Ciudad.
19. A few informal organizations have emerged through online social networks. So far, they have presented their case in a parliamentary hearing.
20. According to one informant, the CEDU split up because of differences with regard to government policies. In addition, certain developers that are part of AEV expressed their discomfort and doubts in AEV events. Finally, in an event organized in November 2018, the former director of Banco Nacion, who as previously mentioned had publicly opposed UVA loans, was invited as main keynote speaker.
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I. Socoloff
I. Socoloff holds a doctorate from the University of Buenos Aires (Argentina). She is currently a researcher at Argentina’s National Research Council based at the University of Buenos Aires. She specialized in urban sociology and economic geography and has published articles on real estate holdings in Argentina.
