Overview of the Study
The article âThe Housing Crisis in Superstar Cities: Labour Markets, Price Inflation, and Financializationâ is authored by Francesco Findeisen, a researcher at Sciences Poâs Center for European Studies and Comparative Politics. It appears in the European Journal of Sociology (2022, vol. 63, no. 3, pp. 363â392) and is publicly accessible through the journalâs DOI 10.1017/S0003975622000315. The work is distributed under a Creative Commons CC BYâNCâND 4.0 licence, allowing nonâcommercial sharing with attribution.
Core Argument
The paper argues that the rise of agglomeration economies in âsuperstarâ citiesâNew York, London, Paris, and Berlinâdrives massive housingâprice inflation. Highâpaying jobs and superior amenities concentrate skilled workers who are willing to pay premium prices, turning urban housing into a lucrative asset class. Financial investors respond to this trend, further accelerating price growth and deepening affordability pressures.
Key Quantitative Findings
- Housing price growth since 2000: New York +300 %, London +170 %, Paris +160 %, Berlin +195 %.
- Priceâtoâincome ratios (2019): New York 9.4 (Manhattan 11.4), London 12.75, Paris 13.5, Berlin 6.3.
- Labour market expansion (1990â2019): New York added ~4.5 million jobs, London ~1.5 million, Paris ~2.0 million, Berlin ~0.5 million, with serviceâoriented sectors dominating.
- Financialization of mortgage markets: Global mortgageâbacked securities grew from under $15 trillion (1990) to over $65 trillion (2017). Institutional investors now allocate roughly 20 % of portfolios to realâestate assets.
Mechanisms of Financialization
The study details how securitisation, shadow banking, and capitalâmarketâbased funding channels convert residential properties into tradable securities. Institutional actorsâincluding sovereign wealth funds, pension funds, and private equityâhave increased allocations to housing, especially after the 2008 crisis. In Europe, the EUâs Capital Markets Union and Franceâs âSimple, Transparent, Standardisedâ securitisation framework have facilitated this shift.
Social Implications
The concentration of wealth in core urban locations intensifies class stratification. Homeownership in these areas becomes a primary determinant of social status, while lowerâincome households face rising rents and limited access to affordable housing. The paper notes that the pandemic did not materially alter these dynamics; highâincome remote workers continued to demand spacious homes near city centres, sustaining price pressures.
Policy Context and Recommendations
The author highlights that national housingâfinance regimes (e.g., depositâbanking in the UK, mortgageâbacked markets in the US) shape the speed of financialisation but cannot alone curb price inflation. Effective mitigation requires coordinated regional and national policies, such as:
- Expanding supply through relaxed zoning and higherâdensity construction.
- Implementing rentâcontrol measures in the most unaffordable districts.
- Strengthening socialâhousing provision to offset marketâdriven price spikes.
Relevance for Sustainable Housing in Europe
For a panâEuropean audience focused on sustainability, the paper underscores that unchecked financialisation undermines social equity and hampers the transition to inclusive, resilient urban housing systems. Integrating affordableâhousing mandates into climateâadaptation plans and aligning financial incentives with lowâcarbon building standards are essential to address both the housing crisis and environmental goals.
Further Reading
The article cites extensive literature across political economy, urban sociology, and housing finance, providing a comprehensive bibliography for scholars and policymakers seeking deeper insight into the interplay between labour markets, price dynamics, and financial actors in Europeâs most influential cities.

