Housing Developers in Financial Times

In many cities that experience increasing housing prices, stimulating the construction of housing has become a common strategy. Within this logic, private developers are seen as important actors to counteract the housing question. Since the subprime-mortgage crisis, increasing housing prices in several geographies have been interpreted as part of financialization tendencies, relating the global housing crisis to finance oriented accumulation patterns. Nevertheless, analogous to the general lack of research on real estate supply actors, the financialization discussion has mostly ignored the role of developers in arrangements that enable the use of real estate as source for financial profits. Yet, given the political confidence, private developers will contribute to improve the provision of housing, it seems important to question if tendencies of financialization can be also observed in the property development industry, and how do they may affect social urban development and housing supply.

For a newly built inner-city quarter in Berlin I examine how building attributes, actor constellations and business strategies have changed in favor of the return expectations of financial investors. The case reveals how coinciding with rising residential prices, real estate developers arrange with financialized actors in order to implement high profitable projects. The case reveals how coinciding with rising residential prices, real estate developers use deregulated planning principles and market oriented housing policies to create high profitable investments, and arrange with financialized actors in order to implement their projects. The increasing use of alternative investment vehicles for the financing of housing production indicates the existence of financialization processes in property development.

Using empirical evidence based on planning analysis and corporate research, the presentation contributes to the integration of property development issues in the academic debate on the finacialization of housing. Furthermore it claims to consider the consequences of financialization processes by policies that stimulate private housing construction.