The financialization of rental housing 3.0

Abstract

While early rounds of rental housing financialization were predominantly driven by private equity firms and other speculative landlords acquiring residential portfolios, in the wake of the global financial crisis, real estate investment trusts (REITs) and institutional investors marked their entry into the public and private rental sector. Although this transition from financialization 1.0 to financialization 2.0 is arguably still unfolding, the contributions to this special issue demonstrate that we are potentially experiencing the beginning of a new cycle. Financialization 3.0 is marked by intensifying—albeit not necessarily stable and coherent—state interventions and regulatory attempts to both constraint and facilitate institutional housing investment. For all its contradictions, I argue that financialization 3.0 contributes to shifting modes of governance, enabling global financial investors to (1) negotiate housing policy and urban planning arrangements, (2) develop market-oriented crossholdings and state-supported investment schemes, and (3) diversify portfolio holdings and rentier models across the real estate sector at large. Although an emergent state-finance nexus can thus be observed, the outcomes of financialization 3.0 are controversial at best. For that reason, I conclude that financialization 3.0 will not lead to a durable asset ecosystem where tensions between public housing needs and global investment priorities are reconciled.