Introduction to special issue on the governance of residential investment

Introduction

As researchers living in, analysing and often challenged by London’s housing system, we are constantly thinking about how the governance and regulation of global housing systems are evolving. In recent years, we have been particularly concerned with the changes happening under what some term a financialised housing system (see Aalbers, 2016). In our home cities, and as is evidenced in the comparative analysis found throughout this Theme Issue, the rise of so-called global landlords, institutional investors seeking to capitalise on strong rental market performances, is demonstrative of this financialisation process (see Nethercote, 2020); the movement of alternative forms of private capital into the housing system for both the production (see Beswick et al., 2016) and consumption of homes (McKenzie and Atkinson, 2019) is shaping how homes are valued more for their exchange or extractive value, rather than the use value; and the outcome of this more financialised system is a set of wider issues about how to build and provide enough homes for cities in (perennial) crises (see Edwards, 2016; Gallent et al., 2017). These are significant questions for those researching contemporary urban and regional studies of housing markets, and so for the authors in this Theme Issue, the question of how to make the housing system work – how to deliver homes, to regulate the production, management and consumption, to ensure affordability and access – is at the forefront of the research presented here.

More specifically, in this Theme Issue we are concerned with the financing and funding of housing systems. This Theme Issue derives from a workshop run following the cancellation of the 2020 meeting of the American Association of Geographers (AAG). The initial AAG call for papers asked authors to consider how new landscapes of residential investment (see Raco et al., 2019) are governed and regulated – or what attempts are made to govern them. As organisers, and driven in a large part by the What is Governed in Cities (WHIG) research network run by Le Galès in Paris and currently being analysed by Mike Raco and Tuna Taşan-Kok (authors in this issue), we were concerned with how the planning, development, delivery and management of housing globally are facing new challenges in both our home city (London) and others. These challenges, as has been well documented in urban and regional studies (cf. Adisson, 2018; Savini and Aalbers, 2016), frequently come back to a question of funding and governance: how to pay for the now huge cost of making and maintaining homes? How is finance for homes governed and regulated? The question of housing affordability is one that stakeholders across the system are facing. For example, how do national or sub-national governments (often working in a system of austerity) provide sufficient social housing? How do developers, requiring a range of experts to navigate situations of crisis (see Brill and Raco, 2021; Geva and Rosen, 2018; Robin, 2018), pay for housing planning and development while maintaining sufficient returns to satisfy owners and/or shareholders? How can occupiers, both renters and owners, afford decent housing when globally cities are facing housing crises (Wetzstein, 2017)? In this Theme Issue, we centre these questions and focus on European and comparative examples to explore the uneven dynamics underpinning financialisation and the evolving way different scales of governance have responded to new forms of capital and related challenges.

The papers in this issue collectively make three key contributions to the debates on housing provision, investment and governance. First, we help to unpack the question of ‘what is investment’? Through a deliberative and concise reading of the particularities of investment actors and strategies across often very diverse housing systems and cultures, we reveal the multiplicity of meanings ‘investment’ has and examine the importance of recognising this in future research. This helps inform a more precise understanding of what investors are looking for (see Özogul and Taşan-Kok, 2020) and therefore enables a more adaptive governance structure that uses a better informed analysis to pinpoint regulatory mechanisms (Brill, 2021). Second, we explore the range of ways in which governments are engaging with changing landscapes of housing finance. Adding to work that shows the ways in which the state is enrolled in processes of financialisation (see Weber, 2015), we show proactive, counteractive and responsive policy contexts through which the market is made and regulated.

Third, these contributions arise out of a deliberately internationalised approach. Taking each case as a singular example, but looking across them in dialogue, reveals the productive spaces through which comparison can be constructed through special or theme issues (see also Ballard and Butcher, 2019). For many of the authors in this issue (Ward, Taşan-Kok, Raco, Rosen, and Brill), comparison has been at the heart of their urban analysis for a long time. For those involved in the wider WHIG project, spun out of Le Galès’ broader international agenda on urban governance, there was necessarily a comparative angle to the question of investment in residential property and its regulation, not least because the WHIG team works across the cities of Amsterdam, London and Paris. For many authors, their experiences of living and working in other cities shape how they see the sites they analyse, so that the ‘comparative tactic’ they employ is a suggestive and implicit ‘thinking from elsewhere’ (see Brill, 2022). Within the context of ‘European’ studies, bringing in a range of sizes of cities of global importance, and those that feature more or less prominently in urban and regional studies more broadly, was essential in raising questions and thinking through answers that resonate beyond the specifics of each case.

What is investment?

Over the last 10 years, Taşan-Kok has shaped an agenda that pushes forward how we might unpack what Heather Campbell and colleagues call the black box of development professionals (Campbell et al., 2014). As Taşan-Kok has consistently shown, especially in more recent work with her co-author in this special issue Özogul, there has been a tendency towards homogenising ‘investment’ and ‘investor’ in critical urban studies that has reduced our capacity to understand and ultimately challenge emerging financial actors (see Özogul and Taşan-Kok, 2020). This is not to say that investors’ particularities have not been unpicked elsewhere; indeed, the particular approaches of pension funds and patient capital (see for example, Theurillat et al., 2016), private predatory equity (see for example, Beswick et al., 2016), institutional landlords (see for example, August and Walks, 2018; Fields and Uffer, 2016) and more commercially orientated actors (see for example, van Loon and Aalbers, 2017) have been shown very clearly in critical urban studies. What we do here is to utilise the analyses of the different cities in this Theme Issue, and the changing periods of time analysed, to reveal how these interact and their relationship with one another. There is a deep path dependency to investment patterns and processes that entrenches a complicated regulatory landscape, but there is also a need to untangle the variety within funding and financing mechanisms to elucidate a more precise understanding of what investment-focused actors are doing, why and how.

In this Theme Issue, Taşan-Kok et al. (2021) reveal the changing landscapes of investment in Amsterdam, demonstrating how new actors find their space within existing systems. This sets the scene for focusing on a longitudinal shift and attending to investment patterns as something in flux but with periods of significant change that reflect wider crises, a theme that emerges in the work of Brill et al. (2022) in this issue on the pandemic-induced responses from particular types of finance (patient capital). For all, the question of housing remains as both something produced and something consumed; for Brill et al. (2022) the consumption of housing is a question of what the market can deliver or does deliver for particular target groups. For Stirling et al. (2022), a more discursive analysis of the policy narratives on consumer subjectivities provides insight into the link between national macroeconomic organisation and investment in the United Kingdom. The concept of legacies or path dependency emerges as key across all the cases (see also Geva and Rosen, 2022; Stirling et al., 2022), especially in the interaction between private and public actors – discussed further in the next section.

The range of ways governments and investors are engaging with changing landscapes of financing housing

This more precise understanding of investment is essential, since shaping policy agendas and building effective challenges (from communities, locals, activists and progressive politicians) requires understanding the different aims and approaches of these actors. In their contribution, Brill et al. (2022) call for a more patient planning approach that attends to the timescales of patient investors – indeed London Mayor Khan has insisted that the timescales for governing patient investment in housing shift such that housing must be held as social housing for 15 years. Yet, this all builds on the history of mayors that precede him – and relies on relationships with national government. The variegated abilities of (local) states heavily shape the capacities of state actors to directly shape investment patterns (Geva and Rosen, 2022). For Stirling et al. (2022), national government – and specifically its macroeconomic strategies – is at the heart of understanding housing governance (see also Ryan-Collins et al., 2017). Housing therefore functions as a key space through which different scales of political action manifest and are made.

For Geva and Rosen (2022), there are also moments of positivity that can be taken from their analysis, uncovering a state’s attempt to reconcile institutionalised neoliberalism and a focus on market-led delivery, with more socially minded approaches. As the role of arms-length organisations operating in spaces that straddle within, between and outside the state grow in their involvement in housing delivery globally (see for example, Penny, 2021), these cases demonstrate tensions in state capacities and strategies, especially those that emerge when confronting a long history of working in particular ways. More progressive or socially attendant ways of operating are therefore circumvented by existing structures and systems (Brill et al., 2022; Geva and Rosen, 2022), yet there remains spaces of hope and a clear sense of regulatory (political) duty.

Drawing conclusions across the cases

This Theme Issue has provided an opportunity to think through in a more internationalised way the same queries and questions we face when researching housing systems and the new actors emerging to fund our urban development more generally (see Robinson et al., 2022). As with all academic endeavours, it has been a collaborative process that has revealed deep interconnections between places – shared experiences of particular forms of capital or even the same firms working in variously different ways across the cities we live in and research. For example, in Amsterdam and London we see how the same form of investment is shaped by the very particular and path-dependent policy agendas at a national and local level. In this, we took inspiration from the ‘What is Governed’ network from which two of the papers come (Brill et al., 2022; Taşan-Kok et al., 2021).

Comparative agendas have long shaped urban and regional studies, especially with regard to housing studies (see Pickvance, 2001). This Theme Issue directly builds on this tradition, making connections across cases that challenge what a single case study can tell us about governing investment. Importantly, adding to debates on ‘how to do comparison’, in this issue the comparison was less explicit in the writing but it was a constant background which was essential in shaping the way we thought about our research questions. We drew out the comparison in shared workshops, conversations and engagement via email across contexts throughout our analysis and writing processes which provided opportunities to think iteratively through different contexts. In this, we implicitly ‘thought with elsewhere’ (see Robinson et al., 2022): we had the sites we know well in our analytical lens but remained continually engaged in a dialogue informed by other places which helped reveal new dimensions for analysis through comparative conversations. Here our conversations flourished across cases and pushed us all to think through how our particular case balanced the unique and the generalisable.

Concluding remarks

This Theme Issue therefore makes three key contributions to debates on governing housing in urban and regional studies. First, we elucidate a more comprehensive understanding of ‘investment’ in a housing context. Second, we reveal different ways in which the governance of a broadly conceived of ‘investment’ unfolds. Finally, we make these contributions through a consciously engaged, collaborative approach that demonstrates the possibilities of comparison through a themed issue.

On a final note, while we were putting together our various contributions to the AAG, the Covid-19 pandemic arrived, throwing up new challenges for both our academic research and for the market(s) we analyse. In this issue, we therefore see how the pandemic changed what was studied, how this engagement happened, and why. Through this, we contribute to ongoing emerging debates on what it means to live with Covid-19 as a backdrop to our lives, our understandings of cities and homes (Cociña et al., 2021), and as an urban condition (see Acuto et al., 2020). This is evident, for example, in how Brill et al. (2022) return to the question of ‘key workers’ in their contribution and demonstrate how the pandemic has enlivened old debates and in doing so has re-constructed the language of policy targets. In their initial contribution, struck by the missing policy on what is termed in other contexts ‘gap housing’ (see Butcher, 2020), they sought to unpack how critical workers for the (social) reproduction of the city of London had largely disappeared from policy discourses and were absent from market delivery literature. With the pandemic, this changed – key workers were back in town – and how this shaped the investment and regulatory contexts matters.

Beyond these questions, the pandemic has also raised new challenges for doing research and for bringing a collection of papers like this together – how do we create a supportive, collaborative environment through which all the authors can help push forward one another’s contributions? How do we facilitate an open dialogue with the stilted (and delayed) nature of Zoom calls? For us, the early workshop (just a few months into Zoom workplaces) worked well, but we had to find ways to accommodate the adverse and uneven impact Covid-19 had on particular demographics – making space for those with additional childcare responsibilities or who picked up more work during the shift to online learning. These dimensions of the social reproduction of academic work, often invisible in our outputs, were pushed to the centre of our situation and forced us to consider the ways in which we must adapt, not just to remote working and learning, but to alternative understandings of a working day for those facing different situations. While not a core contribution evident in the individual papers, this remains, especially for those doing the organising, a key learning for us.