Between Housing And Investments - The financialisation of housing in zurich

"Between Housing And Investments - The Financialisation of Housing in Zurich" is a master's thesis authored by Christian Lusti, published under the auspices of the 4CITIES program, which is part of the Erasmus Mundus Master in Urban Studies. This research critically examines the phenomenon of financialisation in Zurich's housing market following the 2008 financial crisis, highlighting the implications for urban housing and sustainability.

The thesis reveals that the financial crisis acted as a catalyst for the influx of global capital into Zurich's real estate market. Factors such as low interest rates, deregulation, and Zurich's strategic position as a global financial center have led to institutional investors increasingly dominating the housing market. This shift has resulted in significant increases in land and rental prices, particularly in areas that were previously affordable, contributing to gentrification and the displacement of vulnerable populations.

Since 2008, real estate prices in Zurich have surged by over 300%, while residential rents for non-profit flats have increased by 40%. The average rent for a 2-room apartment in 2022 was CHF 1,639, with median incomes struggling to keep up with rising rents. In 2023, only 8% of flats were owner-occupied, while 33% of the rental market was held by institutional investors. This stark imbalance illustrates the growing challenge of housing affordability in urban areas.

Lusti employs a critical realist methodology, integrating interdisciplinary perspectives to uncover the complex dynamics driving financialisation. The research utilizes qualitative interviews and quantitative data to analyze the conditions contributing to the financialisation of housing, emphasizing the importance of understanding the socio-political context of housing policies.

Zurich is characterized by a high tenant rate of 92%, significantly higher than the national average of 61%. The housing market is shaped by a unique mortgage system, strict lending conditions, and a lack of state support for homeownership. The city’s rental market operates under a cost-based rent system, which has failed to protect tenants from excessive rent increases, exacerbating the housing crisis.

Institutional investors have gained substantial market share, with their presence in the housing market leading to increased rent extraction and a focus on maximizing returns. The research highlights a shift in ownership structures, where traditional private landlords have diminished in favor of institutional entities, further complicating the landscape for affordable housing.

The thesis argues for a reorientation towards socially just housing solutions, critiquing local and national policies that favor financialisation. It emphasizes the need for critical examinations of urban housing policy to address the pressing issues of affordability and access to housing in Zurich and other urban contexts across Europe.