The Financialization of Housing in Europe - My Home is an Asset Class

The Financialization of Housing in Europe - My Home is an Asset Class is a comprehensive report published by The Greens/EFA, authored by Daniela Gabor and Sebastian Kohl. This report delves into the increasing influence of institutional landlords in European housing markets, highlighting how residential properties have transformed into significant financial assets.

In recent decades, institutional landlords, such as real estate giants and pension funds, have increasingly invested in Europe's residential housing market, minting approximately EUR 40 billion worth of properties in Berlin alone. This figure is roughly double the combined value of institutionally owned houses in London and Amsterdam, with the trend accelerating post-COVID-19. The report emphasizes that the financialization of housing has resulted in rising house prices, making housing less affordable for citizens while ensuring stable returns for investors.

The report outlines how the push for housing as an asset class has led to various struggles for citizens, including rising rent prices and decreased affordability. Citizens across Europe, from Berlin to Dublin, have mobilized for government action, advocating for measures such as rent controls and better regulations for institutional landlords. The document posits that the financialization of housing has not only inflated prices but has also contributed to a decline in urban living space, increased overcrowding, and higher housing costs for lower-income households.

One of the critical findings of the report is the lack of transparency and data regarding institutional landlords. For example, non-listed private equity funds owned about 30% of the EUR 2.7 trillion real estate assets in the EU, but there is little public documentation on the residential properties held by these entities. Furthermore, recent EU initiatives have facilitated the transition of residential housing into institutional ownership, which may disadvantage citizens unable to compete financially.

To combat these issues, the report proposes several reforms aimed at regulating institutional landlords to protect public interests. These include establishing a Sustainable Institutional Housing framework that mandates disclosure and regulation of institutional landlords, alongside a European Housing Fund to counteract the negative effects of financialization. The report argues that without these measures, housing may continue to be treated primarily as a financial asset, further jeopardizing its availability and affordability for the general public.

In summary, the report by Gabor and Kohl sheds light on the urgent need for a regulatory framework that prioritizes housing as a human right rather than merely a financial asset. It emphasizes that European policymakers must address the implications of financialization to ensure that housing remains accessible and sustainable for all citizens.