Capitalizing on the Urban Debtscape: The Political Economy of Real Estate Investment Trusts and the 'Resolution' of the Irish Property Crash

A burgeoning literature demonstrates how the inter-dependent relationship between the financial and real estate sectors has intensified boom-bust dynamics within urban property markets. Following the 2008 financial crisis,... [ view full abstract ]

A burgeoning literature demonstrates how the inter-dependent relationship between the financial and real estate sectors has intensified boom-bust dynamics within urban property markets. Following the 2008 financial crisis, this articulation of financial risk within cities has created an “urban debtscape,” referring to the socio-spatial outcomes and relationships linked to the speculative deployment of debt in the city. In the housing market, this ‘debtscape’ is most visible in the patterns of reckless mortgage lending, defaults and home foreclosures that have occurred in Subprime America and Peripheral Europe. However, while the geographies of the ‘debtscape’ and its economic, social and political impacts are increasingly understood, knowledge is less developed regarding how the link between finance and the built environment is being re-established. How are financial circuits being promoted back into crisis-hit housing markets? How are distressed housing assets being redeployed back into financial circuits? What is the State’s role in rebooting the real estate-financial complex and what are the political-economy implications? In response, this article explores the development of the Real Estate Investment Trust (REIT) market in Ireland as part of the State’s efforts to deleverage the country’s failed banking sector and attract global, yield-seeking capital into the moribund property market. Despite their location at the nexus between financial and real estate, REITs have not figured highly in critical geographic discussion of the financialization of the built environment. This article addresses this gap by (1) contextualising the history, politics and geography of REITs and by stressing their urban dimensions; (2) highlighting the State’s role in establishing the legislative, institutional and regulatory pathways that support the financialization of distressed property debt; and (3) examining how REITs are contributing to processes of urban transformation and displacement in the neighbourhoods in which they invest, as well as creating new contestations in the Dublin housing market.