Financializing nursing homes? The failure of REIT investment in the context of rising home-based welfare

Authors: Natacha Aveline-Dubach*, CNRS/University Paris 1 Panthéon Sorbonne
Topics: Economic Geography, Urban Geography
Keywords: real estate, financialization, REIT, nursing homes, long term care
Session Type: Virtual Paper
Day: 4/9/2021
Start / End Time: 1:30 PM / 2:45 PM
Room: Virtual 38
Presentation File: No File Uploaded


Ageing countries are facing growing pressure to increase the provision of long-term care facilities for
older people as the baby boomer generation reaches high levels of care-dependency. Some governments
have sought to mobilize finance capital by creating a new segment of long-term investment vehicles for
nursing homes and medical facilities known as “Health Care REITs” (HC-REITs). This article compares
the development of HC-REIT markets in France, the United Kingdom and Japan, placing them in the
wider context of their respective aging populations and welfare systems. It highlights the weak
development of HC-REIT investment structures due to their dependency on the supply of properties by
care providers. To expand their business against the background of shrinking public welfare support,
care providers seek to extract value from older residents’ home equity. Based on a framework
that combines research on comparative welfare provisioning and home-based welfare, the paper shows
that Anglo-American type (“Beveridgean”) welfare systems are more likely to encourage the extraction
of value from home equity and the development of financial supports as a substitute for public funding.
It therefore raises serious concerns that housing-as-pension policies will aggravate inequalities among
older populations in need of care (with subsequent effects on housing related intra-family transfers) and
will expose them to intensifying house-price volatility. As a result, although the paper supports
Christopher's (2015) contention that financialization has empirical limits, the experience of HC-REIT
development nevertheless sheds light on the increasing influence of institutional financial intermediaries
and home equity in the later life cycle.

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