Financialization and the rescaling of large developers: the built environment and national business groups

Abstract

This chapter departs from the premise that in recent years a ‘distinctive investor class’ has emerged, such as hedge and private equity funds capable of centralizing capital (Harvey 2020), whose investment decisions have had an effect not only on the actions of national and local states but also of all economic agents, including traditional real estate developers. Capital accumulation has transformed the scale, size, and power of firms involved in space production. And this rescaling of capital undoubtedly challenges urban sociologists who intend to critically analyze cities' built environment.Within this framework, studies on real estate financialization have shown that various financial mechanisms drive capital centralization that is poured into the built environment (Aalbers 2019, Aalbers, Fernandez, & Wijburg 2020). For scholarship in the field, financialization promotes the repetition of certain urban patterns (like large scale urban projects, ‘modern’ iconic high-rise office towers, big multifamily apartment complexes, and shopping malls, among others) while transforming developers' rationalities, strategies, and capacity for action. These trends undoubtedly put any debate on ‘local power’ in cities into question. Nevertheless, the modes in which financialization shapes cities are diverse and variegated (Aalbers 2017), giving rise to an enormous heterogeneity of firms' trajectories, product specializations, articulations, and relationships.