The Techno-politics of Rental Housing Financialization: Real Estate Service Companies and Technocratic Expertise in Australia’s Build to Rent Market

Abstract

This article argues private expertise is a driving force behind the global expansion of rental housing financialization and, particularly, the making of build to rent (BTR) assets and markets. It develops this argument by investigating Australia’s underexamined BTR market and global real estate service companies (RESCs) as ubiquitous yet unscrutinized intermediaries in this new financialization frontier. Its analysis heeds calls to attend to assetization, as the process of turning things into assets, deploying science and technology studies-inspired marketization approaches, which understand markets as sociotechnical assemblages, and their prior integration with critical political economy of financialization. This approach is enhanced by engaging with the techno-politics of market-making scholarship, which sensitizes assetization approaches to the politics of expertise. This conceptual move respecifies market devices (i.e., material and discursive assemblages of market making) as knowledge contingent (i.e., that require and assert expert knowledge) and provides conceptual terrain to explore the rule of private experts in assetization. Analysis of interviews, media, and industry reporting reveals how RESCs’ epistemic, discursive, and technical efforts format the emergent market, making BTR assets thinkable, visible, calculable, and transactable. This article repositions rental housing financialization as a techno-political project led in nontrivial ways by private experts who act as financializing champions and as intermediaries connecting global finance and local sites, through advisory, valuation, brokerage, and lobbying. This contributes to understandings of the expanding global geographies of rental housing financialization and project ecologies behind urban production. Underscoring the power of private expertise to reconfigure housing markets recasts concerns surrounding market reliance as urban housing crisis salves.

Key words:

• Australia
• consultants
• build to rent
• intermediaries
• expertise
• financialization of rental housing
• professional services firms
• real estate service companies
• marketization
• financial assets

Acknowledgments

Many thanks to the editors and reviewers for their constructive feedback. This research was undertaken with funding from Australian Research Council DECRA Award (DE200100521) and with research assistance from Ani Landau Ward for fieldwork interviews. Ethics approval was granted by RMIT Human Research Ethics Committee on 7/4/2021. ID: 2021-24030-14047.

Notes

1 Global PSFs include the Anglo-American Big 4 accountancy firms, strategy consultants (e.g., McKinsey), and UK magic circle law firms (e.g., Linklaters) (Bousseba and Faulconbridge 2019).

2 Broadly, financialization concerns “the increasing dominance of financial actors, markets, practices, measurements, and narratives, at various scales, resulting in a structural transformation of economies, firms (including financial institutions), states and households” (Aalbers 2016, 544).

3 Financial and business journalists, Velthuis (2015, 336) argues, are not “outside observers or interpreters of markets but active participants in them, as contributors to [market] design and maintenance.” Clark, Thrift, and Tickell (2004, 290) likewise underscore how trading and investing are entangled with media corporations. One reason for this is that the finance industry pays attention to the media, aware that “the value of financial products is increasingly bound-up with the media image of those products’ and that ‘sometimes outrageous claims made on CNBC or CNN can move markets.” Clarke (2012, 262) describes financial discourses as “financial engineering, not economic photography” intimating the media’s potential agency, unmasking journalism as a “site at which economic imaginaries are constructed.”

4 The director gave an example: “[Y]our operational expenditure deduction is about 30 percent all in. We can see anything from like, 10 percent, 50 percent and there’s all weird ways of doing things.” (RESC03). A Colliers (2021, 40) report corroborates that view, noting “[T]here is an inconsistency in the way expenses have been reported or forecast, which has made the exercise of benchmarking expenses a difficult exercise. To date there is no industry standard which all major developers or operators follow.”

5 The media’s efficacy as a lobbying mechanism is no sure bet (Greenfield and Williams 2007). More media may speed up the policy-making process: it garners more attention, more supportive feedback, and in turn a momentum for policy change. Media attention can have the opposite impact, however, stalling policy-making processes by increasing the frictions within the political system and interrupting momentum for change (Wolfe 2012). Others still point out the limits of media campaigns in driving policy change in the Australian housing space in the absence of direct contact between lobbyists and policy makers and politicians (Jacobs 2015).

6 No sites have received BTR planning permits, with developers reliant on conversions/amendments of residential (and sometimes office) permits.