Cultures of Debt Management Enter City Hall

Deruytter, Laura; Möller, Sebastian

doi:10.4324/9781315142876-36

Cited by 21 publications

(3 citation statements)

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“…They find that neoliberal welfare reforms and austerity have pushed housing cooperatives [Larsen and Lund Hansen 2015] and city governments [Pacewicz 2013; Lagna 2015] to experiment with new financial instruments. The literature concludes that capital-market-based policy implementation recentres institutional architectures and the very nature of housing around financial logics and the return requirements of investors [Deruytter and Möller 2020; Weber 2010].…”

Section: City–finance Relations and The Financialization Of Housingmentioning

confidence: 99%

“…Paradigmatically, Aalbers [2016: 83] argues, “this wall of money is one of the key drivers of financialization and explains partially why so many assets have been opened up to financialization”. Urban governance scholars have shifted the focus of analysis to urban policy and the agency of urban governments [Deruytter and Möller 2020; Guironnet, Attuyer, and Halbert 2016]. They find that faced with national austerity, cooperatives and city governments pursue capital market investments for the implementation of housing policy [Beswick and Penny, 2018; Vidal, 2019].…”

Section: Introductionmentioning

confidence: 99%

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The Housing Crisis in Superstar Cities: Labour Markets, Price Inflation, and Financialization

Findeisen¹

2022

Arch. eur. sociol.

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This article advances explanations of the housing crisis in modern political economies. It argues that the rise of agglomeration economies is driving the massive increase in housing prices in superstar cities. These concentrate high-paying jobs and life chances in central metropolitan areas, pulling in a highly skilled workforce who are willing and able to pay ‘whatever it takes’ for access to these opportunities. As a result, the value of homeownership in strategic urban locations has surged. Investors have thus found it rational to capitalize on longer-term price inflation and invest. Based on a comparison between New York City, London, Paris, and Berlin, this article demonstrates that housing prices in superstar cities move in lockstep with the reconfiguration of urban labour markets. Investors follow this trend in their decisions to invest in housing, which further compounds affordability pressures. The article concludes that access to homeownership in strategic urban locations increasingly mediates inequality and class formation in modern political economies.

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Section: City–finance Relations and The Financialization Of Housingmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The Housing Crisis in Superstar Cities: Labour Markets, Price Inflation, and Financialization

Findeisen¹

2022

Arch. eur. sociol.

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“…A second key evolution is the introduction of New Public Management (NPM), which implies moulding public management after private sector models. The installation of NPM began in the 1980s but has deepened under the Maastricht Treaty and the Great Recession (Deruytter and M€ oller, 2020;Whiteside, 2018). Budgetary pressure has been shown to trigger the adoption of risky financial products (Strickland, 2013).…”

Section: Governing Utilities Amid Austerity and Financialized Capitalismmentioning

confidence: 99%

Why do state-owned utilities become subject to financial logics? The case of energy distribution in Flanders

Deruytter

Juwet

Bassens

2021

Competition & Change

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According to political economists, the state’s governance of infrastructure is becoming prone to processes of financialization. To date, however, research on how state owners of infrastructure enable and react to the entry of financial logics into such domains remains limited. This paper mobilizes the case of Eandis, a Flemish energy grid company, as a typical case to examine the causal mechanisms involved when state-owned utilities become subject to financial logics. During the 2000s, Flemish municipalities increased their ownership of Eandis, while the company deepened its debt exposure to optimize return on capital. In 2016, Eandis aimed to attract private financial equity and selected a Chinese investment fund as a potential co-shareholder. Although this buy-in was blocked, the conditions under which the state-owned company became increasingly entangled with financial markets remain unchanged and warrant a deeper examination. To explain this trajectory, we identify two causal mechanisms in the fields of market-making and ownership strategies by the multiscalar state. First, we show how regulatory models caused Eandis to focus on financial metrics such as credit ratings, subjecting management to financial market disciplines. Second, we find that budgetary constraints, combined with top-down utility governance, have made municipalities dependent on financial returns on utilities. The interaction between market-making and financial ownership strategies institutionalizes a financialized gridlock, in which municipal shareholders’ interests conflict with the need for low consumer fees and green grid investment. We argue that reforming the regulatory framework and strengthening fiscal solidarity across state layers would allow states to develop non-financialized strategies.

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Connecting Local Government with Global Finance: Professional Service Firms as Agents of Financialization

Möller

2021

Professional Service Firms and Politics in a Global Era

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Cultures of Debt Management Enter City Hall

Cited by 21 publications

References 1 publication

The Housing Crisis in Superstar Cities: Labour Markets, Price Inflation, and Financialization

The Housing Crisis in Superstar Cities: Labour Markets, Price Inflation, and Financialization

Why do state-owned utilities become subject to financial logics? The case of energy distribution in Flanders

Connecting Local Government with Global Finance: Professional Service Firms as Agents of Financialization

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