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M. B. Aalbers, The Financialization of Housing. A political Economy Approach

2016, New York, Routledge, 168 p.
Valentina Moiso
p. 123-124
Bibliographical reference

M. B. Aalbers, The Financialization of Housing. A political Economy Approach, New York, Routledge,168 p.

Full text

1The book by Manuel Aalbers is a point of interest in the production of this author for three main reasons: it presents his studies synoptically, clearly describing concepts and issues contained in different works; it mixes academic and educational language, thus addressing a broader public, from researchers to politicians; and it raises relevant and fascinating issues for each different target. In addition, it focuses on a subject which is mostly under-researched and under-theorized in the Social Sciences: the “growing interdependence between housing and finance”, which has its highest expression in the phenomenon of the financialization of housing and the different mechanisms involved in it.

2The common thread of autonomous contributions in the book, some co-authored, is perfectly contained in the title, demonstrating the usefulness and necessity of analysing the financialization of housing through an analytical approach linking housing studies and the political economy tradition. This perspective is challenging not only because it is hardly widespread, despite the proliferation of studies about housing, but also and above all because of the ways it develops from a conceptual and practical point of view.

3In order to guide the reader to this conclusion through his reasoning, the author gradually introduces some core concepts, and then illustrates how they intersect, situating them within his analytical framework. So, the book opens with a definition of financialization put forward by Aalbers himself:

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 (p. 2).

4It is a definition that is not too specific but captures the essence of the process: financialization is a matter of power, acted through practices and narratives and involving different actors other than financial ones. This is a crucial concept to understand the complexity of contemporary economies and societies. One of the key aspects of financialization is the “race to assets”: everything that can be capitalized becomes a means of producing wealth, even “non-financial assets” like one’s home (Martin, 2002). Housing becomes an asset through the securitization of mortgage, so taking advantage of the growing tendency for families to fall into debt. The major impact is on housing prices (owned or rented): their growing pressure on family earnings and their movements (e.g. their drop after the 2008 crisis) are phenomena which are interrelated to financial mechanisms and create widespread consequences in terms of inequalities.

5The financialization of housing is a process situated in time and space and displaying differences in timing and patterns among countries. For Aalbers – and Brett Christophers in chapter 2 - the political economy approach makes it possible to investigate these differences in greater depth, focusing on the role of a multiplicity of global, national and local institutions involved in both the financialization process and the housing system. The author’s approach to this phenomenon is explicitly macro and aimed at capturing the common trajectories in the process of financialization of housing across countries. Within this comparative view, one of the critical issues raised by Aalbers is that the study of housing requires us to consider housing not “a public policy of the welfare state” but “a public policy in its own right” (p.10). This observation draws the attention of comparative housing studies, also given their growing importance at the European level, and calls into question Esping-Andersen’s types of welfare state. Devised in order to study education, healthcare and social services, the EA typology applied to the study of the housing system generates great in-group differences within each type, being de facto useless for the study of the system. But overall, it implies an ancillary role of the housing in the welfare state: the consequence is an under-valuation of housing per se as a key factor in national growth, family wealth, ideology of private property, and housing policy in general, including fiscal treatment and regulation of the activities of lenders, landlords and investors. All these factors play a crucial role in understanding the importance of housing for the creation and distribution of wealth in global financial capitalism.

6Aalbers- with Rodrigo Fernandezin, chapter 5 - traces also the contribution to the variety of capitalism provided by the financialization of housing. He focuses on different geographical levels: global level and crisis, in chapter 3, or national mechanisms linked to the securitization of mortgages in different countries, in chapter 6. Those interested in a general but precise view of the intertwined local and global mechanisms should turn specifically to chapter 4 or chapter 7, where the focus is on the active role of the state. Aalbers traces the differences from mainstream economics, in particular concerning the role of state intervention. The financialization process also involves the semi-public and public sectors and implies a very active role of the state in reconfiguring the market, particularly clear in the case of subsidized housing presented in this chapter.

7After analysing main differences throughout the book, in the conclusion Aalbers traces common trajectories. Among them, elements of particular importance are changes in the attitude towards homeownership and house rental from the point of view of families and changes in social relations, where the debtor-creditor relationship becomes a powerful driver of exploitation. Housing, Aalbers concludes, is – along with food and pension schemes – one of the areas that directly link people to the global economy and, given its implications, the financialization of housing deserves more attention on the part of researchers.

8In particular, through studies with a micro point of view, we hope to investigate in greater depth the changes identified by Aalbers in the meanings and practices of families arising from indebtedness linked to housing, to better understand the consequences of the financialization of housing on those most concerned but scarcely informed and protected.

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Bibliography

MARTIN R., (2002), Financialization of Daily Life, Temple University Press, Philadephia, 240 p.

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References

Bibliographical reference

Valentina Moiso, « M. B. Aalbers, The Financialization of Housing. A political Economy Approach », Méditerranée, 127 | 2016, 123-124.

Electronic reference

Valentina Moiso, « M. B. Aalbers, The Financialization of Housing. A political Economy Approach », Méditerranée [Online], 127 | 2016, Online since 01 November 2016, connection on 12 December 2018. URL : http://journals.openedition.org/mediterranee/8505

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About the author

Valentina Moiso

Università di Torino

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