Throughout Europe, the financial sector has raised housing prices. It’s a political time bomb | Tim White

“ tNow, his housing crisis poses as great a threat to the EU as Russia. “Barcelona Mayor Jaume Collboni Announce. “We take the risks of work and middle class to conclude that their democracies cannot solve their biggest problems.”

It is not difficult to see where Collboni comes from. From Dublin to Milan, residents often find half of their income swallowed up by rent, and most people’s home ownership is unimaginable. Major cities are witnessing Spiral room price Some people have increased their median year-on-year rent More than 10%. People are forced to fall into more instability and narrow Conditions and homelessness are Rapidly rise.

As Collboni asserted, housing is at the heart of the continent’s political disenfranchisement. The crisis is Come on the far right – for example, support with alternative fürdeutschland supporting Germany and more recently The victory of the Dutch Anti-Islamic Liberal Party. Housing has become the main one Inequality Enginestrengthen the division between beekeeping and North Disproportionately affect minorities. For many in Europe, far from providing security and security, it is now the main cause of suffering and despair.

But not everyone is suffering. Meanwhile, it is robbing ordinary people and living a comfortable and dignified life, and the housing crisis is the pocket of a few individuals and institutions. Passed through Europe The same story has unfolded in recent decades, albeit in a very different way: the power shifts to those who make profits from housing and away from those who live in it.

The most striking manifestation of this shift is the massive ownership and control of housing by financial institutions, especially since the 2008 global financial crisis. In 2023, $1.7TN The management of global real estate is managed by institutional investors such as private equity firms, insurance companies, hedge funds, banks and pension funds, up from $38.5 billion in 2008. These participants stimulated loose monetary policy, which viewed European housing as particularly profitable, particularly profitable “asset level”. Institutional investors buy residential properties in the euro zone Double in the past decade. As an asset manager in London explain: “Real estate investors exposed to European residential assets are cats that get cream”, homes produce “risk adjustments higher returns” than any other sector.

The scale of institutional ownership in some places is shocking. In Ireland, almost half All units delivered since then 2017 was purchased by an investment fund. Throughout Sweden, the share of private rental apartments for institutional investors as landlords has expanded twenty four%. In Berlin, €40 billion Now housing assets are in the institutional investment portfolio. 10% Overall housing inventory. Among the four largest Dutch cities One quarter In recent years, investors have purchased homes for sale. Even in Vienna, a city that is widely evident for its massive, subsidized housing stock, institutional participants are now investing Every 10 Housing units and 42% New private home.

Not all investors are the same. But when the goal is to make money from housing, this may just mean one thing: the price rises. As former UN Special Rapporteur Leilani Farha pointed out, investment funds assume “trust obligations” to maximize returns to shareholders, which usually include pension funds that ordinary people rely on. Therefore, they do everything possible to increase prices and reduce spending, including through “renovation” (leasing rents under the pretext of renovation), under-maintenance and the introduction of punitive expenses. When private equity giant Blackstone acquired and renovated a home in Stockholm, its rent on certain homes increased by up to 50%, economic geographer Brett Christophers Established. “Green” transformation in the name of sustainability is also becoming increasingly common Tactics.

Our corporate capture of homes is not pending. Decades of privatization, liberalization and speculation in the housing market have allowed the financial sector to tighten control over European households. From the 1980s, government-owned apartments were transferred to private markets in places such as Italy, Sweden and Germany. In Berlin, for example, a large amount of public housing was sold to large companies. In a deal, Deutsche Wohnen purchased 60,000 apartments from the city in 2006 450 million euros;Only 7,500 euros per apartment.

With the role of welfare states in demolishing housing regulations, many countries have adopted demand-side interventions, such as free mortgage credit. This has intensified widespread speculation, raised housing prices and encouraged the highest levels of household debt. The resulting 2008 financial crisis provides investors with new opportunities. Countries such as Spain, Greece, Portugal and Ireland have become treasure houses of “bad” assets and mortgage debts that can be snapped up at cheap prices. Despite the widespread damage caused by the crisis, Europe’s reliance on housing solutions only increased in the following years.

As power shifts to investors and speculators, the government is increasingly dependent on them, so it has been withdrawn by residents. To incentivize or “reduce risks” private investment, European governments have weakened tenant protection, cut program regulations and construction standards, and provided special subsidies, grants and tax relief to entities such as real estate investment trusts. Especially a group of people are the first to be hit: renters. Tenants saw their rents soaring, living conditions deteriorate, and safety was damaged. In Europe, some investment funds directly drive displacement and supervise subversive evictions by low-income tenants.

Strong financial players do a great job of building their own frameworks, not the causes of general crises. They continue to push the now-dominated narrative that more real estate investment is a good thing as it will increase the supply of much-needed homes. For example, Black Stone Propose Play an active role in “solving the chronic supply of housing across the continent.” but There is evidence The greater participation in the financial markets does not increase overall ownership or housing supply, but increases housing prices and rents.

The truth is, institutional investors are not really producing housing. Significant increase in supply directly violates their interests. As an asset manager admitthe lack of housing supply is not good for residents, but it “supports cash flow.” The President of Blackstone is famous admit “The big warning sign for real estate is capital and cranes.” In other words, they need a shortage to keep prices high.

Where corporate capital does generate new homes, they will certainly be the biggest profit. Cities such as Manchester, Brussels and Warsaw have experienced a flood of high-definition housing products such as micro-isolation, construction rentals and shared living. Design with clear intention Optimize cash flownone of these can be afforded and not suitable for most families. Common Wealth, Focus on the Wisdom of Ownership, Established Private equity-backed rental sectors account for 30% of new homes in London, primarily adapting to high-income singles. Family representative fairness 5% Tenants who build tenants are more extensive than one-quarter of the private rental sector. These overpriced company attachments are a clear reminder of the market’s inability to provide a home that suits the needs and income of most people.

Although housing is at the heart of today’s political disillusionment, for the same reason, it is the main trigger for mobilization across Europe. In October 2024, there were 150,000 protesters procession The streets passing through Madrid demand action. Some governments, including Denmark and Netherlandspolicy is being introduced to stop speculators. But real estate capital continues to hold power, so it continues to move forward – including through exploitation Vulnerabilitylobbying policies that put profits at risk. In 2021, Berliners voted in favor of expropriation and social apartments, owned by stock-listed landlords. But below The pressure on real estate hallspoliticians stagnated the motion. That same year, Blackstone – Spain’s largest landlord owns 40,000 homes, opposing plans to implement a 30% social housing target in an institutional portfolio. The struggle against the huge structural forces of real estate interests will be difficult.

In recent decades, we have been living through an ever-increasing social experiment. Is it a fundamental need for all humanity to deliver houses successfully under the conspiracy of financial capitalism? The evidence now seems overwhelmed: No.

With investors’ dominance, the power of residents has been systematically destroyed. We are facing an unimaginable crisis. While we can and should point our fingers at the company’s greed, we must remember that this is a system that works exactly as well as set up. When profits are universal troops, housing regulations are always unable to align with social needs – to produce the most urgently demanded housing types within the price range. Housing will occupy the center stage of European politics in the coming years. Now is the time for fundamental structural changes from finance, regaining residents and restoring housing as a core priority of public regulations.