Private equity firms have remade family rental homes into portfolios of financialized asset classes

Evidence

However, as noted above, the present conjuncture has witnessed important new developments that redeploy asset-backed securitization techniques, and this has included the remaking of geographically-dispersed family homes for rent as portfolios of investable assets for global property companies (Fields, 2018). Beginning in the US with the purchase of foreclosed suburban homes by private equity firms (but now prevalent elsewhere, especially in cities such as London and Berlin), ‘this refinancialization of housing’ to realize ‘a new asset class’ combines an array of sovereign legal provisions and ‘shared understandings, standards, and practices’ (e.g. market data, bond ratings) that are consistent ‘with the needs and requirements of capital markets’ (p.120, 128). This is an assetization process that draws wider sustenance from the tightening of mortgage markets since 2008, growing demand for rental homes, and declining rates of owner-occupation as a housing tenure for families. As such, it is also contributing to furthering the uneven distribution of compounding asset wealth from housing, and thereby serving to intensify the inequalities of contemporary financialized capitalism. — Paul Langley, Assets and Assetization in…, 41

Categorization

• XREF: Connects to the reader’s finance background on asset-backed securitization and to assetization theory as the current logic of capitalism. — connects to: Homeowners turned houses into assets for renovation and checking accounts for daily bills. — Neil Fligstein & Adam Goldstein, The Emergence of a Finance Culture in…, 133; Private equity asset-stripping is feudal rent extraction, not wealth creation — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 434; Private equity acquisitions follow a debt-loading, asset-stripping, cost-cutting extraction cycle — Andrew deWaard, Derivative Media: How Wall Street…, 249

Related

• Private equity asset-stripping is feudal rent extraction, not wealth creation (similarity 0.82)
• Homeowners turned houses into assets for renovation and checking accounts for daily bills. (similarity 0.81)
• Housing asset ownership now structures class and inequality more than occupation does. (similarity 0.80)
• Upper-middle households increasingly treated homes as leverage assets. (similarity 0.78)

Broader Connections

• Private equity asset-stripping is feudal rent extraction, not wealth creation #corroborates (0.85) — Yanis Varoufakis, Technofeudalism, 434
• Private equity acquisitions follow a debt-loading, asset-stripping, cost-cutting extraction cycle #expands (0.80) — Andrew deWaard, Derivative Media, 249