Abstract
Through privatising gains and socialising losses, the ‘winners’ of this most recent financial crisis have been the banks – indeed, emerging bigger and more integrated to the global financialised economy than ever before. In their edited collection, Housing Markets and the Global Financial Crisis: The Uneven Impact on Households, editors Forrest and Yip deviate from the wealth of commentary and research on institutional casualties and government interventions immediately post-crisis and, instead, focus on the differential degree to which households were affected by the Global Financial Crisis (GFC). The result of a two-day symposium held at the City University of Hong Kong in December 2009, this edited collection investigates the uneven impact of the GFC on households within and between major economies and countries. An effective blend of authors – including consultants, economists, policy researchers and academics – produce 13 substantive chapters of the text, documenting the experiences of the USA, the UK, Iceland, Ireland, the Netherlands, Hungary, Australia, New Zealand, Vietnam, South Korea, Japan, Hong Kong and China. Despite the wide range of countries, the overall text is quite accessible, and is written in a matter-of-fact manner for an educated audience. Many of the chapters employ adjuncts to the text, including graphs, tables and maps.
Forrest opens the collection with, in my view, one of the strongest chapters. Laying the theoretical, historical, geographical and empirical foundations of the collection, he weaves through a series of thematic lenses, noting the ‘usual suspects’ – appropriating blame for the crisis – and the ‘usual victims’ as being those most affected, in general, at the household level. Among the latter, younger households, those of lower incomes, purchasing property at the peak of housing prices and with the highest loan-to-value ratios, typically were hit hardest. Given this framework, Forrest rightly notes how the history of national housing systems, degree of integration with their financial systems and therein the broader global economy, would affect the uneven impact of the crisis. His engaging discussion culminates in his so-called ‘key factors’ affecting the degree of impact on households, namely: level of homeownership; size of social and private rental sectors; structure of homeownership sector; housing market trajectories and decline; overall debt exposure; lending regimes; income effects; institutional factors; and nature of government response to the crisis (p. 14). Given this range of factors, we would expect to see an uneven impact on households within and between countries. However, some consistency would have perhaps aided in the presentation of the text; the appropriation of space within chapters to a country’s history in regards to housing market development and institutional/government integration, empirical results from analysis, and prescribed policy action had uneven coverage throughout this book. Where some chapters gave lengthy histories, others focused almost exclusively on empirical results. Despite this, given the goal of the text was to document the uneven impact on households, which it accomplishes in colours, it does not detract from the overall quality of the collected works.
The organisation of the text follows a quasi-geographical approach, grouping major players in the crisis (the USA, UK), smaller countries that were disproportionately affected (Iceland, Ireland), those countries escaping relatively unscathed (the Netherlands, Australia) and grouping much of Asia in the latter part of the text. Following Forrest’s introductory chapter, Duncan and Costantino focus on the effects of the recent credit cycle on US homeownership rates. One of the few chapters to utilise more advanced statistics, this is a strong analytical chapter, perhaps expected given the authors’ roles within Fannie Mae (VP, and a senior economist). Next, Williams produces another strong analytical chapter examining the credit crunch in the UK, across the housing market and associated policy, at the scale of the household.
One of the most convincing chapters is Sveinsson’s account of Iceland, blending a rich historical landscape with effective data analysis and policy prescriptions. Chapter five has Norris and Winston document an original analysis of housing wealth and debt in Ireland across age and income cohorts, housing tenure, and geographic regions. Thereafter, Ronald and Dol investigate the housing system, government responses, and household impact in the Netherlands. They conclude that housing regulatory practices, in addition to the historical development of the Dutch housing system has allowed households in the Netherlands to escape relatively unaffected by the GFC. In chapter seven, a convincing conceptual framework for analysis of transitional countries is provided by Hegedus, in the Hungarian context. Housing policy and government responses to the crisis are noted as key in helping alleviate the impact on households. The trio of Berry, Dalton, and Nelson examine Australia, while Thorns moves past empirical analysis to include the socio-cultural effects of the GFC on New Zealand, including a fresh perspective to this collection by focusing on the ontological security provided through homeownership, issues of trust and risk within the housing market, and subjectivities such as the meaning of house and home.
Shifting focus to Asia, Phe provides the case of urban Vietnam; Kim outlines the construction-dependent case of South Korea, and employs one of the better attempts of prescriptive policy action. Hirayama showcases Japan through a novel approach, noting the importance of intergenerational dynamics to housing markets, and the potential (long-term) effects, by the GFC. Yip, the second editor of this collection, makes his debut in the 13th chapter, with a convincing study of Hong Kong. The influences of the Asian financial crisis of 1997, and of China in alleviating the impact of this GFC are emphasised. Finally, Ye and Sun take a more urban geographical approach in the collection’s final substantive chapter, and interestingly look at the differential impacts of the GFC between first- and second-tier cities in China. Forrest thereafter summarises some major themes of the text in the conclusion, noting the global integration of countries and their housing systems, the importance of government action in alleviating impacts of the crisis, and reiterates that ‘policy histories, demographics, different institutional practices, underlying patterns of housing demand and tenure structures coalesce and collide with the global economic downturn to produce quite different outcomes’ (p. 244).
Housing Markets and the Global Financial Crisis: The Uneven Impact on Households is undoubtedly effective at achieving its title, therein its main purpose, of examining the uneven impact of the GFC on households within and between countries. However, a few shortcomings are worth note. Along with the uneven distribution within chapters of historical, empirical and theoretical contents, there remain questions around the selection of countries for investigation. In the first instance, why is Latin America completely ignored by the editors? This may be for pragmatic reasons, but it is not noted. Equally, of the so-called BRIC countries, which are of increasing importance to the global economy, only China is studied. On the other hand, while outside the stated purpose of the book, I feel an important omission is any attempt worth note, outside of a few paragraphs in Forrest’s introduction, of appropriating causes of the crisis; many chapters merely accept it happened, and move on to studying its impacts. It would be worthwhile, given the few chapters that have serious policy recommendations, to have included more theoretical work on the nature of this crisis – politics and partisanship aside. Forrest does a nice job of providing a concise overview of opinions in appropriating blame, so to speak, for the crisis, but more substantial thought of this sort is both helpful and necessary in deciphering the next steps both on part of institutions and individuals in recovering from this most recent crisis. Indeed, such an inclusion could have led to a stronger concluding chapter, which I found weak in comparison with his excellent introductory chapter.
Despite these limitations, Housing Markets and the Global Financial Crisis: The Uneven Impact on Households brings together a diverse set of researchers from a solid mix of countries, culminating in an accessible, methodologically sound and engaging edited collection. Given this, and as a first-attempt at examining the GFC comparatively in terms of its impacts on households, this book is a much welcomed addition to the urban studies discourse broadly, and empirical work on the GFC specifically.