How austerity “worked”: the Portuguese case on post-crisis financialization and repoliticization of the city

Authors: Ana Drago*,
Topics: Political Geography, Urban Geography, Europe
Keywords: urban financialization, housing crisis, austerity, politicization, Euro crisis
Session Type: Paper
Day: 4/6/2019
Start / End Time: 9:55 AM / 11:35 AM
Room: Capitol Room, Omni, East
Presentation File: No File Uploaded

A decade after the global crisis, capital accumulation strategies have returned to the property market almost with a vengeance, sparking a profound socio-urbanistic transformation in European cities, inflating housing prices and evicting traditional dwellers from city centers.

We use the Portuguese case to discuss how this urban/housing crisis was created by austerity policies aiming to respond to global financial crisis, and how it fostered a repoliticization of the urban around issues of property, uses of the city, and impacts of transnational financial investment.

Within the Euro crisis, Portugal resorted to a European financial bailout in 2011. That “help” imposed an agenda of harsh cuts in public expenditure, social policies and wages, but also a detailed strategy for boosting the housing market: rental liberalization; attracting foreign investment towards real state; and establishing minimal taxation for short-term tourism rentals. Almost ironically, within a global crisis triggered by the bursting of a property bubble (sub-prime), this was the only economic strategy of austerity that “worked”: city tourism boomed; transnational gentrification emerged; building’s renovations multiplied; housing and rental prices rocked. Real state became central to Portuguese economic recovery since 2014.

But new conflicts arose: popular classes began being evicted from city centers, and some middle classes segments found themselves unable to access housing. Our aim is to discuss how this transformation of the city – its new financial and economic “function” in the post-crisis Portugal – is transforming public policies and fostering new political divides around issues of access to property and the city.

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