Housing policy under the conditions of financialisation - The impact of institutional investors on affordable housing in European Cities

This resource is a research report published by Sciences Po Urban School, authored by a collective of experts including Andrej Holm, Georgia Alexandri, Matthias Bernt, and others. The report focuses on the impact of financialisation and institutional investors on affordable housing in various European cities.

The report discusses how the financialisation of housing, particularly since the 2008 financial crisis, has led to a growing presence of institutional investors in European housing markets. It highlights that this trend has contributed to a housing affordability crisis affecting numerous households in major cities. The report aims to explore the role of these investors as active agents in housing supply and the implications for local housing policies.

Seven cities—Athens, Berlin, Brussels, London, Malmö, Milan, and Warsaw—are analyzed to understand the varying impacts of institutional investors. Each city's unique rental systems and market dynamics influence the role these investors play, reflecting diverse local contexts and challenges.

The report reveals significant disparities in the concentration of institutional investors across cities. For instance, nearly three-quarters of the housing stock managed by institutional investors is located in Germany and Sweden. It also notes that while institutional investors control a small share of overall housing stock, their influence is pronounced in specific locations, affecting housing access and affordability.

The study indicates that institutional investors often contribute to the decline of affordable housing stock. In many cases, they engage in practices such as converting rental apartments into more lucrative short-term rentals, thereby exacerbating affordability issues. The report stresses the need for effective housing policies that can mitigate these impacts and ensure affordable housing remains accessible.

The report underscores the importance of local policy frameworks in managing the activities of institutional investors. It points out that many cities are struggling to adapt their housing policies to effectively regulate these new actors. The findings suggest that public-private collaborations and innovative policy measures are essential in addressing the challenges posed by financialisation.

The report highlights a concerning trend: as housing prices rise, many households are increasingly burdened by housing costs. This is particularly acute in cities like Athens, where rising rents have pushed vulnerable populations into precarious living conditions. The authors call for comprehensive strategies to tackle these affordability issues, urging policymakers to rethink their approaches to housing in light of the growing influence of financialisation.

In conclusion, this research report provides critical insights into the complex relationship between financialisation, institutional investors, and affordable housing across Europe. It advocates for a nuanced understanding of local contexts and the need for collaborative policy efforts to ensure that affordable housing remains a viable option for all residents.