From Financial Markets to Austerity Policies through the Assetization of Public Real Estate. The case of the Italian Investment Fund “Fondo Immobili Pubblici”

Authors: Ludovic Halbert*, Université Paris-Est, Félix Adisson*, Université Paris-Est
Topics: United States
Keywords: assetization, financialization, debt, Italy, public real estate
Session Type: Paper
Day: 4/10/2018
Start / End Time: 8:00 AM / 9:40 AM
Room: St. Charles, Marriott, River Tower Elevators, 41st Floor
Presentation File: No File Uploaded

This research analyses the design and implementation of an Italian public real estate investment fund, named Fondo Immobili Pubblici, in order to explore the interdependencies between austerity policies and the financialization of the urban environment. Initiated by the department of finance in 2004, this policy instrument links the properties of several central administrations of the welfare and fiscal states to financial markets’ capital, intermediaries and calculative practices. As such, it leads to the assetization of public real estate understood, in a Veblenian perspective, as the transformation in the way properties are conceived, i.e., as capitalizable income streams. The qualitative research inquiry made of semi-structured interviews, corpus analysis, and mapping, enables a detailed understanding of the complex fund’s organization and workings. The literature has so far insisted on how financial markets play a key role in the adoption of austerity policies. Our investigation demonstrates that, in
turn, austerity policies rely on financial markets’ capital and instruments when public real estate is used to extract value in the perspective of managing public debt. This does not only result in the assetization of public properties: since those properties are transferred into a private equity fund and later sold mainly to different large-scale institutional investors, it extends the so-called investable real estate asset class, thus further supporting the financialization of the urban environment.

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