The invisible hand of the shareholding state: the financialization of Italian real-estate investment funds for social housing

Abstract

This article contributes to the emerging literature on the post-global-financial-crisis wave of financialization of housing 2.0 by furthering the understanding of how the national governments enable financialization and participate in financial intermediation to pursue statecraft objectives. The analysis stems from a mix-method research study combining longitudinal trans-scalar policy analysis with semi-structured interviews conducted in Lombardy since 2016. It focuses on the case of the Italian real-estate investment mutual funds dedicated to social housing as a key angle from which to observe the state-finance relation underlying the financialization of rental housing and the contextual rise of the shareholding state. While shedding light on the national government’s persistent role in favouring financial power concentrations, this research study framed financial infrastructures that connect local real estate to capital markets as contradictory condensations of power relations emerging from institutionally bounded conflicts and alliances. It thus exposed the hybrid assemblage of state and market forces behind financial market formation.

Keywords:

• Financialization of housing
• Italy
• capital accumulation
• housing
• state

Acknowledgements

The author is grateful to the interviewees, and to Dr Sonia Arbaci Sallazzaro, Professor Mike Raco, the City Governance and Planning Research Group (Bartlett School of Planning), and the anonymous reviewers for their invaluable comments.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 Social rented housing refers to housing that is rented below market rates and targets low-/low-middle-class groups. It includes non-/limited-profit rental accommodations, which are for the most part publicly (co-)subsidized with direct/indirect incentives and promoted primarily by local governments, regional public companies, and non-profit actors.

2 During the nineteenth century, as a result of an initiative by local governments or groups of savers, saving banks arose in Italy as local non-profit credit providers promoting individual saving, charity work, and economic development (on the historical development of the Italian saving banks: De Rosa, 2003).

3 The role played by CDP in enhancing the banking foundations’ (and, in particular, Fondazione Cariplo’s) position as ‘keepers’ of the stability of the banking system (i.e. their own originating banks) emerged in several cases. The initiative that best embodied this relationship was the creation of the Atlante Fund, which collected around 4.25 billion euro in subscriptions in 2016 to buy securitized tranches of bad loans and recapitalize Italian banks. While this private-equity fund was managed by Quaestio Capital Management, owned by a 37% Luxemburgish subsidiarity of Fondazione Cariplo, CDP actively promoted its creation with almost 12 per cent equity allocation.

Additional information

Notes on contributors

Emanuele Belotti

Emanuele Belotti is Research Associate at the Bartlett School of Planning (UCL). He graduated in Sociology from University of Milan-Bicocca in 2013 and concluded Cum Laude his PhD in Urban Studies at Gran Sasso Science Institute (Italy) in 2018. His expertise can count on practical knowledge acquired during a long-lasting commitment within welfare organizations and grassroots movements. His research focuses on housing, financialization and urban informality. He is currently working on the financialization of European housing systems in comparative perspective.