Final Report Summary - REFCOM (The Real Estate/Financial Complex)
In the Real Estate/Financial Complex (REFCOM) project we have studied the interdependence of the real estate sector, the financial sector and the state in Belgium, Brazil, China, France, Germany, Italy, the Netherlands, Poland, Russia, Spain, the UK and the US as well as within specific cities within each country.
The outcomes of the project are as diverse as the countries and cities we have studied. Generally speaking, our study has confirmed the existence of a Real Estate/Financial Complex, akin the Military/Industrial Complex in earlier decades. Not only has the importance of the real estate and financial sectors to the national economy increased in all countries, the connections between both sectors – often described as the Financialization of Housing, Real Estate or the Built Environment – is visible in most countries. In other words: the financial sector now has a larger influence on what happens in the fields of housing, commercial real estate and urban development than it had just a few decades ago. In some cases, we see the direct participation of financial institutions in real estate and urban development. We also see the rise of ‘financialized actors’, for example Private Equity Real Estate and Real Estate Investment Trusts, in the acquisition and management of rental housing and commercial real estate.
The state is not absent in these developments, nor has the state facilitated these through extensive deregulation of real estate and financial markets. To the contrary, expanded and new regulation by the state has enabled new markets to flourish or to exist in the first place. The state is an active player in the financialization of housing, real estate and the built environment, but her exact role may be different in different countries and may also differ between different arms and layers of the state. Actors from the real estate and financial markets have also heavily lobbied the state to implement regulation that suits specific companies within those sectors. The result is rarely the so-called ‘level playing field’ of good governance but rather a redrawing of the rules, institutions and framework of real estate markets to the benefit of specific actors. This has resulted in the rise of corporate financialized landlords in countries as diverse as Germany, Spain and the US, but also to the development of tradable development right in Brazil and China, and the rise of mortgage indebtness in most countries.
The outcomes of the project are as diverse as the countries and cities we have studied. Generally speaking, our study has confirmed the existence of a Real Estate/Financial Complex, akin the Military/Industrial Complex in earlier decades. Not only has the importance of the real estate and financial sectors to the national economy increased in all countries, the connections between both sectors – often described as the Financialization of Housing, Real Estate or the Built Environment – is visible in most countries. In other words: the financial sector now has a larger influence on what happens in the fields of housing, commercial real estate and urban development than it had just a few decades ago. In some cases, we see the direct participation of financial institutions in real estate and urban development. We also see the rise of ‘financialized actors’, for example Private Equity Real Estate and Real Estate Investment Trusts, in the acquisition and management of rental housing and commercial real estate.
The state is not absent in these developments, nor has the state facilitated these through extensive deregulation of real estate and financial markets. To the contrary, expanded and new regulation by the state has enabled new markets to flourish or to exist in the first place. The state is an active player in the financialization of housing, real estate and the built environment, but her exact role may be different in different countries and may also differ between different arms and layers of the state. Actors from the real estate and financial markets have also heavily lobbied the state to implement regulation that suits specific companies within those sectors. The result is rarely the so-called ‘level playing field’ of good governance but rather a redrawing of the rules, institutions and framework of real estate markets to the benefit of specific actors. This has resulted in the rise of corporate financialized landlords in countries as diverse as Germany, Spain and the US, but also to the development of tradable development right in Brazil and China, and the rise of mortgage indebtness in most countries.