– Manuel B. Aalbers –
Financial geography is often understood as the geographies of money and finance, but in my approach financial geography is a lens that can be applied to a range of topics, in this case real estate and the city. Real estate is not only central to the reproduction of the current highly financialized system (both as a form of collateral and a source for private consumption), but it also is its weak link as real estate markets have been turned into Ponzi schemes.
A number of lessons from financial geographies of the city can be drawn regarding the temporality and spatiality of financializing the city. Firstly, the financial crisis that started in 2007 has not resulted in an overall definancialization of the city. In some places it appeared to be a bump that had to be overcome and as a case like Ireland suggests, the ‘solution’ to the crisis of financialization was predominantly to implement financial instruments and favour financial rationales and actors in more rather than fewer domains. Austerity urbanism was rolled out in many places. This is not simply continuing or furthering neoliberalism, but is implemented through more intensified financialization of urban governance and lives.
Despite a number of common trends, the experiences of real estate and urban financialization are variegated. But it would be too easy to conclude that the financialization of land, housing and real estate is exclusively a Global North phenomenon. For example, the literature on financialized state strategies that favour real estate development and investment are primarily coming from middle-income countries that are typically seen as part of the Global South, such as Latin America, the Middle East and East Asia.
Finally, the literature of the financial geographies of the city has highlighted both the commonalities and differences between the contemporary treatment of land and financial assets, residential and commercial real estate, public and private/privatized—and entrepreneurial and financialized—urban governance; within both Global North and Global South, and both urban and rural contexts. The literature also notes an emerging gentrification-touristification-financialization nexus. The role of the state, and the local state in particular, in all of this is variegated and often ambiguous, and will—no doubt—be the topic of future studies applying a financial geography lens to study land, housing, real estate, infrastructure and urban governance. Read the full paper here.
Copyright: Manuel Aalbers 2019.