“The hoapplying crisis is now as huge a threat to the EU as Russia,” Jaume Collboni, the mayor of Barcelona, recently declared. “We’re running the risk of having the working and middle classes conclude that their democracies are incapable of solving their hugegest problem.”
It is not hard to see where Collboni is coming from. From Dublin to Milan, residents routinely find half of their incomes swallowed up by rent, and home ownership is unconsiderable for most. Major cities are witnessing spiralling houtilize prices and some have jaw-dropping year-on-year median rent increases of more than 10%. People are being pushed into ever more precarious and cramped conditions and homelessness is rapidly rising.
As Collboni asserts, hoapplying lies at the heart of surging political disfranchisement across mainland Europe. The crisis is fuelling the far right – linked, for example, to the support for Alternative für Deutschland in Germany and the recent victory of the Dutch anti-Islam Freedom party. Hoapplying has become a primary engine of inequality, reinforcing divisions between the asset-haves and have-nots and disproportionately affecting minority groups. Far from offering security and safety, for many in Europe hoapplying is now a primary cautilize of suffering and despair.
But not everyone is suffering. At the same time it is robbing normal people of a comfortable and dignified life, the hoapplying crisis is lining the pockets of a compact number of individuals and institutions. Across Europe in recent decades the same story has unfolded, albeit in very different ways: power has shifted to those who profit from hoapplying, and away from those who live in it.
The most striking manifestation of this shift is the large-scale ownership and control of homes by financial institutions, particularly since the 2008 global financial crisis. In 2023, $1.7tn of global real estate was managed by institutional investors such as private equity firms, insurance companies, hedge funds, banks and pension funds, up from $385bn in 2008. Spurred by loose monetary policy, these actors consider Europe’s hoapplying a particularly lucrative and secure “asset class”. Purchases of residential property in the euro area by institutional investors tripled over the past decade. As a London-based asset manager puts it: “Real estate investors with exposure to European residential assets are the cats that obtained the cream,” with hoapplying generating “stronger risk-adjusted returns than any other sector”.
The scale of institutional ownership in certain places is staggering. In Ireland, nearly half of all units delivered since 2017 were purchased by investment funds. Across Sweden, the share of private rental apartments with institutional investors as landlords has swelled to 24%. In Berlin, €40bn of hoapplying assets are now in institutional portfolios, 10% of the total hoapplying stock. In the four largest Dutch cities, a quarter of homes for sale in recent years were purchased by investors. Even in Vienna, a city widely heralded for its vast, subsidised hoapplying stock, institutional players are now invested in every 10th hoapplying unit and 42% of new private rental homes.
Not all investors are the same. But when the aim is to create money from hoapplying it can mean only one thing: prices go up. As Leilani Farha, a former UN special rapporteur, points out, investment funds have a “fiduciary duty” to maximise returns to shareholders, which often include the pension funds on which ordinary people rely. They therefore do all they can to increase prices and reduce expconcludeiture, including via “renoviction” (applying refurbishment as an excutilize to hike rents), under-maintenance and the introduction of punitive fees. When the private equity giant Blackstone acquired and renovated homes across Stockholm, it increased rents on some of the homes by up to 50%, the economic geographer Brett Christophers found. “Green” retrofits in the name of sustainability are also an increasingly common tactic.
The corporate capture of our homes has not sprung out of thin air. Decades of hoapplying market privatisation, liberalisation and speculation have enabled the financial sector to tighten its grip on European houtilizeholds. From the 1980s in places such as Italy, Sweden and Germany, government-owned apartments were transferred en masse to the private market. In Berlin, for example, vast bundles of public hoapplying were sold overnight to large corporations. In one single transaction, Deutsche Wohnen purchased 60,000 flats from the city in 2006 for €450m; just €7,500 per apartment.
With the role of welfare states in hoapplying provision dismantled, many countries reached for demand-side interventions such as liberalising mortgage credit. This fuelled widespread speculation, pushed up houtilize prices and encouraged extreme levels of houtilizehold indebtedness. The resulting financial crisis of 2008 provided fresh opportunities for investors. Countries such as Spain, Greece, Portugal and Ireland became a treasure trove of “distressed” assets and mortgage debt that could be scooped up at bargain prices. Despite the widespread devastation cautilized by the crisis, Europe’s depconcludeence on the financial sector for hoapplying solutions only intensified in the years that followed.
As power has shifted to investors and speculators, and governments have become ever more reliant on them, so it has been withdrawn from residents. In order to incentivise or “de-risk” private investment, governments across Europe have weakened tenant protections, slashed planning regulations and building standards, and offered special subsidies, grants and tax breaks for entities such as real estate investment trusts. One group in particular has borne the brunt of this: renters. Renters have seen their rents skyrocket, living conditions deteriorate and their security undermined. In Europe, some investment funds have directly driven the displacement of lower-income tenants and overseen disruptive evictions.
Powerful financial actors have done a great job at framing themselves as the solution to, rather than the cautilize of, the prevailing crisis. They have incessantly pushed the now-dominant narrative that more real estate investment is a good thing becautilize it will increase the supply of much-requireded homes. Blackstone, for example, claims to play a “positive role in addressing the chronic undersupply of hoapplying across the continent”. But the evidence suggests that greater involvement of financial markets has not increased aggregate home ownership or hoapplying supply, but instead inflated houtilize prices and rents.
The thing is, institutional investors aren’t really into producing hoapplying. It is directly against their interests to significantly increase supply. As one asset manager concedes, hoapplying undersupply is bad for residents but “supportive for cashflows”. Blackstone’s president famously admitted that “the huge warning signs in real estate are capital and cranes”. In other words, they required shortages to keep prices high.
Where corporate capital does produce new homes, they will of course be maximally profitable. Cities such as Manchester, Brussels and Warsaw have experienced a proliferation of high-margins hoapplying products such as micro-apartments, build-to-rent and co-living. Designed with the explicit intention of optimising cashflows, these are both unaffordable and unsuitable for most houtilizeholds. Common Wealth, a considertank focapplying on ownership, found that the private equity-backed build-to-rent sector, which accounts for 30% of new homes in London, caters predominantly to high-earning single people. Families represent just 5% of build-to-rent tenants compared with a quarter of the private rental sector more broadly. These overpriced corporate appconcludeages are a stark reminder of the market’s inability to deliver homes that fit the requireds and incomes of most people.
While hoapplying lies at the heart of political disillusionment today, it is for the same reason becoming a primary trigger for mobilisation across Europe. In October 2024, 150,000 protesters marched through the streets of Madrid demanding action. Some governments, including Denmark and the Netherlands, are introducing policies to deter speculators. But real estate capital continues to hold the power, so it continues to receive its way – including by exploiting loopholes, and lobbying against policies that put profits at risk. In 2021, Berliners voted in favour of expropriating and socialising apartments owned by stock-listed landlords. But under pressure from the real estate lobby, politicians have stalled this motion. That same year Blackstone – Spain’s largest landlord with 40,000 hoapplying units – opposed plans to impose a 30% tarreceive for social hoapplying in institutional portfolios. Struggles against the immense structural power of real-estate interests will be hard fought.
In recent decades we have been living through an ever-intensifying social experiment. Can hoapplying, a fundamental required for all human beings, be successfully delivered under the machinations of finance capitalism? The evidence now seems overwhelming: no.
As investors have come to dominate, so the power of residents has been systematically undermined. We are left with a crisis of inconceivable proportions. While we can, and should, point the finger at corporate greed, we must remember that this is the system working precisely as it is set up to do. When profit is the prevailing force, hoapplying provision invariably fails to align with social required – to generate the types of homes within the price ranges most desperately required. In the coming years, hoapplying will occupy centre stage in European politics. Now is the time for fundamental structural modifys that reclaim homes from the jaws of finance, re-empower residents and reinstate hoapplying as a core priority for public provision.
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