The good, the bad and the data: digitalization of the rental market and social sorting in South Africa

Authors: Julien Migozzi*, Ecole Normale Supérieure de Paris
Topics: Economic Geography, Urban Geography, Social Theory
Keywords: rent, South Africa, housing, market, credit, data, digital, segregation, stratification
Session Type: Paper
Day: 4/7/2020
Start / End Time: 5:35 PM / 6:50 PM
Room: Director's Row E, Sheraton, Plaza Building, Lobby Level
Presentation File: No File Uploaded


Situated in Cape Town, an emerging city of the Global South, this paper investigates the rise of the rental market in South Africa and its impact on social stratification and neighborhood change. I combine in-depth field research conducted among the real estate industry with spatial analysis of property transactions.

Historically stratified on race and class during the colonial and the apartheid capitalism, structured on the ideology of homeownership, the South African housing market is transformed by a dual process of digitalization and quantification. Findings highlights how the development of credit scoring technologies, property valuation systems, online property portals and automated payment platforms discursively and materialistically constructed a new rental market segment. Investment firms collect georeferenced data on property values and fine-grained socioeconomic variables to construct business models and identify "high potential areas" within the post-apartheid city. Through these digitalized market structures, both small-scale landlords and corporate landlords such as REITS a) extract value from the growing middle-income groups priced out from the buyer's market and b) develop new housing products that trigger urban change.

In parallel, credit bureaus develop massive database whose algorithm help investors and landlords classifying "good" and "bad" tenants: these market-based, data-driven categories renew the patterns of social sorting. Despite the state's continuous attempts to promote homeownership in the name of restorative justice, the South African urban society is increasingly structured along a new rentier model, which extends from low-income, segregated townships to the newly-built, racially mixed secured estates from the urban edge.

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