Emergence of Institutional Investors In Post-Crisis Housing Markets
1
Table of Contents Abstract
3
Introduction
4
The Course of Capitalism: The Right to (Buy) Housing
6
Financialisation of Housing: A Brief History
6
The State and Financialised Urban Production
8
Novel Institutional Investors in Post-Crisis Housing Markets
9
De-territorialisation of Extraction
11
The Course of Capitalism: The Right To Buy Rent
13
Authority of The Common: Formation of Manchester City Council
14
Rescaling Governance: City Pride, MIDAS, and Marketing Manchester
14
The Manchester Model
15
Mobilising the Manchester Model
17
Movements Towards Institutional Investors
18
Legislative Architecture: Formulating PRS Housing as a Novel Asset Class
18
Legislating for Institutional Investors Post-Crisis
20
Global Landlords in Post-Crisis Manchester
22
Manifestations of Institutional Investors
27
Utilisation of Institutional Literature for Build-to-Rent Identification
27
Build-to-Rent Formula
28
Cotton Field Wharf: Build-to-Invest
31
Conclusion
37
Bibliography
39
Appendix
45
2
Abstract
This dissertation argues that the emergence of institutional investors in post-2008 housing markets has generated a novel architectural typology re-defining the geographies of extraction. These architectural materialisations disguise a vast network of financialised service infrastructures as a sociotechnical object which, through deployment of neo-marxist theories of urbanisation and political ecology, are uncovered as mechanisms for renewed cycles of capital accumulation via case study methodology (Yin, 1981). These architectural materialisations capitalise on housing dispossession through reinvigoration of the Private Rented Sector, which has grown continuously since the neo-liberal Thatcher era. (Rolnik, 2019) These novel asset classes in the Private Rented Sector signal an acceleration of financialised urban (re)production by further disintegrating housing as a public good and commodifies communities for the maximisation of profit.
3
Introduction
As the Mancunion skyline continues to elevate, a lifetime resident of Manchester recently remarked upon the starkness of Beetham Tower upon its construction in 2006. Contemporary urbanisation of Manchester now integrates the formerly singular skyscraper into a variegated skyline consisting of monolithic steel and glass towers. The motivation for writing this dissertation arose from my personal experience of living and renting in Manchester, tracking the gradual changes in and around the city have suddenly materialised in a skyline unimaginable by residents 10 years prior as neighbourhood regeneration continues to sweep through formerly disused and derelict districts. The city begins to resemble London as these monoliths pierce the brick and mortar fabric, replacing narrow streets with open boulevards lined with bright commericality, continuing to enclose the city as they rise, binding urban programmes through intensified categorisation and hierarchisation. For some, the emergence of these skyscrapers are a sign of the city’s success yet but this perceived success is achieved through dispossession and displacement of previous socioeconomic orders. Should city governance result in the erasure of its own fabric in favour of finance? And what is the true cost of unceasing urbanisation? As finance continues to dominate, and mediate our daily experiences, to what end should we be investigating the sources of finance propelling contemporary urbanisation? Deploying a case study for the consolidation of global theories pertaining to neo-marxist urbanist thought and political ecology, the locale of Manchester and more specifically Ancoats, is utilised due to the architectural contrast of pre and post-crisis development. In addition, the formation of Manchester Life exemplifies actions of a Capitalist State in perpetuation of financialisation and reveals the alamaringly undemocratic processes that a public body are practicing in order to pursue an agenda of ‘success’. The case study is Manchester Life, a Public - Private Partnership between Manchester City Council, and Abu Dhabi Royalty, Sheikh Mansour Bin Zayed Al Nahyan, owner of the Manchester City Football Club since 2014. (Jupp: 2014). This actor’s prevalence in the financialisation of Manchester was starkly revealed on the
4 anniversary of the Peterloo massacre in 2019, where: “Council officials had contacted the event organisers about references to the city having been “bought” by the United Arab Emirates. The performance went ahead without the lines: “Our housing, our streets, our silence on human rights — you can’t keep selling if you’re
already
selling
out.
The officials’ intervention revealed the city leadership’s sensitivity about the Gulf state. Peggy Manning, who helped to write the script, said it was “concerning” that Manchester’s municipal leaders were choosing “to self-censor or avoid commenting on human rights abuses taking place in the United Arab Emirates due to business partnerships.” (Collins, 2019:online) Post-crisis financialisation radicality is demonstrated through tracing a particular financial actor who has already permeated the cultural landscape of Manchester, and has begun capitalising on contemporary Manchester’s booming urbanisation. Methodologically traced through the use of government legislation reports, reports authored by grassroots organisations, UK HMRC data, newspaper articles, Manchester City Council policy documents, and demographic data. These sources are used to reveal the numerous shells of operation that contribute to emergence of institutional investors generally, and specifically for this actor. Global theories are introduced in the literature review, followed by the first chapter of the empirical section, introducing Manchester through the formation of the Manchester City Council. In the proceeding second empirical chapter, post-crisis national legislation is introduced and Manchester City Council’s movements toward institutional investment is charted. Finally then, a specific building is then investigated fully realising connection of global theories, enabling the reader to approach and critically analyse their own context for the identification of institutional investors.
5
The Course of Capitalism: The Right to (Buy) Housing
Financialisation of Housing
“The home becomes a fixed capital asset whose value resides in its expectation of generating more value in the future, depending on the oscillations of the (always seemed) rise of real-estate prices.” (Rolnik, 2019: 21) Financialisation is a term originating in academia describing processes in which financial intermediation governs exchange. Housing financialisation as a political policy during the Thatcher era oversaw the dismantling of the UK’s welfare state through marketisation of public housing stocks and creation of new credit-based housing access programs (mortgages), reforming housing from a public good to an asset. (Rolnik, 2019) In addition, responsibility of new housing construction was shifted from government (local and national) to private (corporate) entities, realigning housing towards “supply rather than demand.” (Rolnik, 2019:20) This deregulatory style of governance integrated Fordist modes of production is named neoliberalism. (Rolnik, 2019) However, due the strategic application of neoliberalism to “specific institutional configurations, particular socio-political power constellations, and pre-existing spatial configurations” (Rolnik, 2019: 19), the effects reveal that the politics of finance are “an eminently unequal process.” (Rolnik, 2019:19) To summarise processes of Neoliberalisation; it must be comprehended as two processes in parallel, as the “partial destruction of what exists and of trend creation of new structures.” (Rolnik, 2019: 19 emphasis added) Financial intermediation of housing was therefore achieved through trend creation through development of complex financial instruments seeking “to delink the actual value of that asset (house) from the contract that was to be used in the high-finance circuit. It meant developing a series of complex steps, numbering up to fifteen.” (Sassen, 2018:109) so, upon the sale of the contract, “the actual value of the home and the mortgage payments did not matter.” (Sassen, 2018:109) The envelopment of housing by finance formulated a “peculiar form of value storage” (Rolnik, 2019:17) where the use value of a home (e.g. as a residence) is superseded by its
6 exchange value (defined by the use value + profit potentiality). (Harvey, 2014) In housing, the Conservative government of the 70’s and 80s “went beyond that of a mere ‘facilitator’” (Rolnik, 2019:28) and “actively deconstructed housing and urban policies and deregulated monetary and financial markets - a destruction of the previous order.” (Rolnik, 2019:28) The initial wave of housing financialisation placed these novels assets within the financial realm, where: “The source of profit for the investor is not the payment of the mortgage itself but the sale of the financial package that bundles hundreds or thousands of mortgage slices. This particular feature of the instrument enables lenders to make a profit from the vast potential market represented by modest-income households.” (Sassen, 2018:110 emphasis
added)
Had finance remained in place to service this ‘modest-income’ market, able to offer credit for housing access through reliable fixed term mortgages, perhaps September 2008 would have been relatively uneventful. However, tracing the realities of housing financialisation to the propelling ideological mechanisms reveals a core contradiction of capitalism - its requirement for both ‘fixity’ and ‘motion.’ (Harvey, 2014) Marx identifies capital’s “need of a constantly expanding market for its products” (Marx and Engels, 1977:83) where, if the barriers to capital accumulation cannot be overcome, “capital can be devalued and in some instances even physically wiped out.” (Harvey, 2008:25) These crises of capital are “a structural feature of the deregulated, interconnected, and electronic financial markets” (Sassen, 2018:123) where as “the more nonfinancial economic sectors experience financialisation, the more susceptible they become to a financial crisis.” (Sassen, 2018:123) In the case of the 2008 financial crisis (referred to as the sub-prime mortgage crisis hereafter), financial institutions simply expanded into riskier markets (after conquering the ‘modest-income’ market), reapplying financial instruments to splice sub-prime mortgages in with ‘more secure’ mortgages in order to retain profitability. (Sassen, 2018) “In short, the so-called subprime crisis was not due to irresponsible households taking on mortgages they could not afford [...] Rather, the mounting foreclosures signaled to those investors who had bought credit default swaps, that it was time to cash in their “insurance,” but the money was not there, because the foreclosures had also devalued the swaps.” (Sassen, 2018:112)
7
The devaluation of property following September 2008 “transformed the subprime and mortgage crisis into new business opportunities for financial investors.” (Rolnik, 2019:63) As the eradication of capital’s existing spatial fix was immediately followed by the generation of a new one, an essential characteristic of capitalism identified by Marx and Engels as “through the more thorough exploitation” (Marx and Engels, 1977:86) of devalued markets, opening “new territories for a new cycle of accumulation.” (Rolnik, 2019:63) Where the existing spatial fix of “unsold projects, foreclosures, or ‘remnants’ of public stocks” (Rolnik, 2019:63) became “undervalued and empty” (Rolnik, 2019:63).
The State and Financialised Urban Production
The State’s role in the integration of space “into the modernized mode of capitalist production” (Lefebvre et al., 2010: 187) redefines the domain of spatial planning as a practice of economic planning. (Lefebvre et al., 2010) The State, as a product of space (at the territorial scale) thereby produces social relations in space through introspective transformation of “its own historical conditions and antecedents” (Lefebvre et al., 2010:225), imposing its own rationality with “space as its privileged instrument”. (Lefebvre et al., 2010:225) State Spatiality redefined economically, (e.g. flows and stocks) are deployed, and the State becomes responsible for their coordination. (Lefebvre et al., 2010). The realisation of State involvement in the financialization of the housing sector has created, both domestically and internationally, the full realisation of a capitalist mode of urban production, evolving from “abstract space that is a reflection of the world of business on both a national and international level, as well as the power of money and the politique of the state.” (Lefebvre et al., 2010:187) Thus mechanics of housing financialisation can be attributed to an internal transition of capitalism appropriating space as a means of production of surplus value, (Lefebvre et al., 2010). Despite disparities in the materialisation of financialised urban production, commonality is evident in “new systems of governance that integrate state and corporate interests [...] through the application of money power” (Harvey, 2014:38). Where the State is responsible for the construction of circulatory infrastructures for servicing abstract spaces for capital circulation,
8 ensuring continuity of flow, “a primary condition of capital’s existence.” (Harvey, 2014:59) The State shapes the direction and force of capital flow through “the socio-legal regulatory infrastructure that allows it.” (Halbert and Attuyer, 2016:1351) Urbanisation, as the “design, construction, exploitation and ownership of the urban built environment” (Halbert and Attuyer, 2016:1347) becomes financialised when processes are designed for “interactions with, and anticipations of” (Halbert and Attuyer, 2016:1350) financial actors. “The co-constitutive relationship between finance and urban space” (Beswick et al., 2016:322) directed by the State, obeys financial logics hence perpetual motion is materially translated through the development of novel asset classes and pursuit of “new financial and investment strategies”. (Beswick et al., 2016:322)
Novel Institutional Investors in Post-Crisis Housing Markets
In the US, single family homes have “long been a significant part of the rental market” (Goodman and Kaul, 2017 cited in Fields, 2019: 2) but the landlord-investor relation was small scale with “fragmented ownership patterns” (Fields, 2019:2) hence resistant to securitization, but as the sub-prime mortgage crisis regurgitated: “Large supplies of discounted property, constrained mortgage credit, and increased rental demand [...] [this] presented an opportunity for private-equity-backed investors to assemble large, geographically dispersed portfolios and issue securitizations backed by rental income flows.” (Mills et al., 2017 cited in Fields, 2019:2) The sheer volume of supply available post-crisis was not restricted to the US, as the emergence of ‘Global Landlords’, a.k.a., Institutional Investors, is traced by Beswick et al., who identify key characteristics of financial actors emerging post-crisis “drawn from “the initial findings of an ongoing international research project investigating the growing transnationalisation of housing systems.” (Beswick et al., 2016: 322) Gathering international data for identification and problematization of these institutional investors leads Beswick et al., towards a three point formula, which is summarised as follows; (1) The opaque-ness of these non-publicly listed companies which, when combined with “light-touch regulation” , (Beswick et al., 2015:324) make these firms less accountable “to both investors and people on the ground, such as
9 tenants.” (Beswick et al., 2015: 324). (2) The abilities of these actors to raise “capital from large institutions such as pension funds and insurance companies” (Beswick et al., 2015:323), with an ability to leverage further loans from financial institutions, and (3) this access to large pools of capital enables the acquisition of large property portfolios, restricting furthering insecure forms of tenancy through monopolisation of rental markets. (Beswick et al., 2015) These institutional investors are “predatory “formations”, a mix of elites and systemic capacities with finance a key enabler, that push toward acute concentration.” (Sassen, 2018:16-17). The novelty of post-crisis financialisation is found in “the nature of the flows of capital which characterise
the
post-crisis
context.”
(Beswick
et
al.,
2016:
329):
“In short, diverse facets of the financial-real estate complex are being concentrated in one set of global actors who are gaining control of both direct property assets and financial assets linked to property.” (Beswick et al., 2016: 329) The entrance of these actors dually defines post-crisis financialisation radicality of housing by (1) the dimensions, which are “proportionate to the massive concentration and availability of global financial capital today” (Rolnik, 2019:267), and (2) “the velocity, directly derived from technological revolution, of value representation, in online and real-time interactions, in increasingly abstract circuits that no longer have any connection to the social works embedded into built space.” (Rolnik, 2019:267 emphasis added) Where “[r]ental properties have emerged as a major new ‘asset class’ for the new breed of investor” (Beswick et al., 2016:329) in postcrisis financialised housing landscapes.
De-territorialisation of Extraction
Dimensionality and velocity of post-crisis financialisation are evidenced in Fields’ study which argues that the transformation from ownership models of housing to rental hegemonies were
10 realised through invention of novel financial instruments facilitating mass acquisition and management of foreclosed properties for rental adaptation. Automated property management operations “relied on logistical extractive digital interventions” (Fields, 2019:5), adopting Fordist production logics for the deployment of a new asset class, where “this model ensured access to a steady supply of raw materials (mortgages) for the mass production of financial assets, eliminated middlemen, and enabled rent extraction [...] throughout the process.” (Goldstein and Fligstein, 2017 cited in Fields, 2019:5) Post-crisis Fordist modes of vertically integrated housing production enabled firms to internalise “supply chains and scale economies [for the] production of financial instruments” (Fields, 2019:8) using “information technology platforms”. (Fields, 2018:9) Creation of novel instruments for capital accumulation couples the materialisation of capital for financial extraction with the reformulation of housing markets from owner-occupier to rental hegemonies. (Fields, 2019 Rolnik, 2019) In Fields’ study, digital advancements for mass property
acquisition
and
management
emerge
revealing
de-territorialised
tactics
of
accumulation nessicating an analytical inclusion of: “forms or modes of existence of capital rather than on “structures” [which] allows us to supersede subject-object dualism, and henceforth capture the universal content that is expressed through the unfolding processes through their concrete manifestation in the situated, affective fabrics of human and non human existence”. (Arboleda, 2020: 15) During the post-crisis “era of increasing dominance of rent extraction over productive capital” (Rolnik, 2019:16), these vast networks of financial servicing infrastructures facilitate capital extraction “from a set of activities, forms of cooperation and from the obligations of a future capacity to labour.” (Mezzadra and Neilson, 2017:578) Requiring expanded definitions of ‘extraction’ and ‘extractivism’ as: “[c]urrent and developing technologies of extraction have extended the terrain of extraction beyond the limits of what we consider extractive industry and transformed it in ways that require rethinking the materiality, spatiality, and temporality of extraction” (Labban, 2014:561) Incorporating revised definitions of ‘extraction’ and ‘extractivism’ informs the methodology of this dissertation through concentration upon the modes of capital operation materialising discrete architectures formulated as post-crisis housing solutions, where these ‘solutions’ act as sites of
11 extraction. These “global apparatus of extraction” (Arboleda, 2020:14) evident in Fields’ study of technologically activated logistic advancements inform “polarizing tendencies of uneven geographical development [that] are no longer exclusively confined to the international political relations of the nation-state” (Arboleda, 2020: 23). Financial liberation of global financial actors through nation-state de-regulation enables global property acquisition where financial extraction becomes the primary mode of operation for housing provision. Reconfiguration of the housing market as a financially extractive industry therefore mutates the house into a site of extraction, or ‘mine’. “Understanding the mine as an interconnected system of spatial technologies and infrastructures allows for superseding the superficial appearance of spaces of extraction as exclusively exclusively fragmented and sclerotic.” (Arboleda, 2020: 21) Additionally, commenting upon methodological nationalism (Arboleda, 2020) the “dynamics of primary-commodity production” (Arboleda, 2020:21) become isolated from world-systems theories and “more adequately conceptualized as the fetishized form of expression of a process whose content transcends an interstate system of political actors with apparent autonomy”. (Arboleda, 2020:21) Dually retaining theories of State involvement with partial abandonment of nation-state significance, the empirical chapters detail transformations of cityregional political ecology establishing new de-territorialised financial circuitry. Emphasis is placed upon immaterial architectures serving these infrastructures, as “the consumption of the city cannot be analytically separated from its production.” (Pierce and Hankins, 2019: 1530)
The Course of Capitalism: The Right To Buy Rent
Summarising the literature review, the first wave of housing financialisation which cemented homes as assets resulted in the sub-prime mortgage crisis of 2008. Resulting in the devaluation of an existing spatial fix, dispossessing millions. (Harvey, 2014) As mortgage credit became constrained, rental hegemonies emerge as housing accessibility is restricted by ever-rising housing prices. (Rolnik, 2019) Following the accumulation of vast property portfolios by institutional investors, acquiring homes for financial extraction, the infrastructures required to support novel modes of accumulation are constructed de-territorialising these extractive
12 financial operations. Magnifying towards the case study of Manchester, the presence of institutional landlords were not significant until the post-crisis coalition government became “seriously engaged in promoting their entry” (Rolnik, 2019:274) through the publishing of ‘the Montague report’ (Rolnik, 2019) which proposes a series of recommendations for increased deregulation of the Private Rented Sector. This model of housing delivery encouraged by the coalition government is referred to as the ‘Manchester Model’ (Peck and Ward, 2002) as demonstration of this partnership has been proven ‘successful’ in several neighbourhood regeneration projects in Manchester since the 1992 Hulme Regeneration project. (Peck and Ward, 2002)
13
Authority of The Common: Formation of Manchester City Council
Despite being a founding globaliser during the 19th century, Manchester has “found itself on the receiving end of new and ostensibly more intense forms of global economic restructuring.” (Peck and Ward, 2002:15) Notable neoliberal urbanisation strategies involved the reimagination of the city through city-centre consolidation, development of sporting economies, and the airport in order to encourage a “consumer” (Peck and Ward, 2002:37) and “high-tech base” (Peck and Ward,
2002:38).
In order to understand post-crisis developments in Manchester, notably the advent of the Manchester Life Development Company, the focus of the case study, it is firstly imperative to trace the consolidation of a central Manchester authority conflating formerly disparate local authorities into a single ‘territory’ for the marketisation of a ‘singular’ Manchester for the attraction of global urban investment following the city’s industrial decline. (Peck and Ward, 2002) These moments of shifting governance in partnership with the explosion of the IRA bomb in 1996 coalesced into a form of formalised financialised urban production detached from democractic processes.
Rescaling Governance: City Pride, MIDAS, and Marketing Manchester
Following the formation of the Manchester City Council in 1972, with the Local Government Act, Manchester’s “seventy-two units at different spatial scales” (Peck and Ward, 2002: 117) were replaced by “one consisting of ten modernised local governments.” (Peck and Ward, 2002: 117) However, during the 1980s, the focus of the conservative government acted in opposition to metropolitan unity. Instead metropolitan deconstruction became the modus operandi, resulting in “a tangled web of task-specific, locally-focused and loosely coordinated agencies” (Peck and Ward, 2002: 118) responsible for managing Manchester’s urbanisation. The centralisation of power in Greater Manchester to a single body (Manchester City Council) was ”a tactical
14 response to the loss of local-government power and the centralising neo-liberalism of the Conservatives nationally.” (Peck and Ward, 2002:12) Through dismantling a solid political body, the 1980s became a decade in which “local authority fiscal retrenchment meant that most were marginalised from key axes of strategic decision-making within the conurbation (Hebbert and Deas, 2000 cited in Peck and Ward, 2002:118) Successive attempts to roll out regeneration resulted in the newly formed Manchester City Council facing difficulties in the administrative boundaries as “Greater Manchester is more highly fragmented administratively than any other British conurbation (Peck and Ward, 2002:42)”. These difficulties triggered the City Pride initiative of 1994 which sought to synchronise regeneration efforts across the ten districts, in addition to the neighbouring authorities of Salford and Tameside, simultaneously seeking to “bolster urban competitiveness, which thereby contribute to the national economic wellbeing.” (Williams, 1998 cited in Peck and Ward, 2002:121) “City Pride responded to these concerns by providing another exhortation for the formation of public-private partnership, but more significantly by encouraging the disparate network of actors involved in developing and implementing urban regeneration initiatives to agree a longer-term strategy within which to frame their efforts.” (Peck and Ward, 2002:121)
The Manchester Model
Stemming from the perception “that longstanding regionally-based investment efforts had proved insensitive to the distinctive needs of sub-regional areas generally, and to Manchester in particular” (Peck and Ward, 2002:124) Marketing Manchester company was formed in 1996 and tasked with raising the “international standing of Manchester” (Peck and Ward, 2002:128) As a public - private enterprise (Manchester Airport donated £1million of the £2.5 million budget for the first three years) (Peck and Ward, 2002), Marketing Manchester’s primary task was cementation of a cityregional collective city identity through reinvigoration of Manchester’s core, arguing that the transformative effects of investment within the city core resulted in successful conurbation of Manchester’s periphery. (Peck and Ward, 2002). The key successes of the Marketing Manchester Company were; (1) the fixing of the position of Manchester City Council
15 as a key political actor in the intermediation of financialised urban reproduction, centrally and across the wider cityregion, (2) the absorption of both Tameside and Salford into the identity of the City of Manchester, and (3) the articulation of common urban objectives across the central core and the satellites. (Peck and Ward, 2002) Following the consolidation of core authorities, a “new inward investment body MIDAS” [Manchester Investment and Development Agency Service] (Peck and Ward, 2002:131) was established to achieve the initial goal of synchronising urban regeneration across the newly consolidated City of Manchester. (Peck and Ward, 2002) City Pride, Marketing Manchester and MIDAS’s centralisation achieved a key aspiration of “policy elites in Manchester” (Peck and Ward, 2002:132) by creating a system where “entrepreneurial functions are now leading the institution-building process, rather than being grafted on to existing agencies.” (Peck and Ward, 2002:132 emphasis added) and “their ascendance represents the temporary victory of (often undemocratic) voluntaristic networks over formal structures.” (Peck and Ward, 2002:132) Consolidation to a central authority with creation and implementation of financially mediated urban production is currently used as the framework for regeneration projects across central Manchester and its satellites. (Peck and Ward, 2002) These various task forces developing a singular Manchester were iterations of the ‘Manchester Model’ of development, a public-private partnership which has an: ”Avowedly semi-autonomous arm’s-length relationship with local authority and is serviced by a dedicated team of officers usually seconded from relevant council apartments. The company owns no assets, but draws together key players from the relevant agencies that can deliver elements of the regeneration programme. (Peck and Ward, 2002: 39)
Mobilising the Manchester Model
16 On the 15th June 1996, “two IRA members planted the UK mainland's biggest bomb since World War Two outside a Manchester shopping centre. The explosion ripped the heart out of the city centre but remarkably no-one was killed. In fact, the blast is now credited by some as kick-starting the city's regeneration.” (Jahangir, 2016:online emphasis added) The severity inflicted upon the central retail zone of Manchester presented an opportunity for a radical demonstration of the Manchester Model for urban (re)production, which Manchester City Council (MCC hereafter) used “to extend its hegemony over Manchester politics.” (Peck and Ward, 2002:136) Limiting discourse of regeneration strategies to consultations, MCC’s “hegemony of the entrepreneurial mode of development was never really challenged.” (Peck and Ward, 2002:138) In addition to the reconstruction of the wrecked Arndale centre, MCC sought to reconfigure the city centre’s utility beyond retail and toward housing. Prior to 1996, 76 people resided in the city centre, 20 years after this had increased to 24,000. (Smithers, 2016) “Manchester’s political ‘revolution’ has almost exclusively relied on the hope that a new ‘architecture’ - a new form of governance, a new quality in the built form, and a newly restructured image - will of itself provide the seeds for radical and progressive change.” (Peck and Ward, 2002:153) The reconstruction of the city centre post-bombing revealed the efficacy of MCC’s approach to urban renewal through ‘partnership’. A centralised political body directed conversations towards design outcomes, excluding questions pertaining to the process, successfully leading to the rollout of regeneration projects across central Manchester. (Peck and Ward, 2002 Silver, 2018) As Silver notes, “This process has been encouraged through specific measures guiding housing and wider urban development.” (Silver, 2018: 4) With the contextualisation of MCC in hand, the subsequent chapter details legislative operations of MCC in the formation of the Manchester Life Development Company.
17
Movements Towards Institutional Investors
Legislative Architecture: Formulating PRS Housing as a Novel Asset Class
Published under the post-crisis Conservative-Liberal Democrat coalition Government, the report: ‘Review of the barriers to institutional investment in private rented homes’, also known as ‘the Montague report’ was developed in consultation with a number of financial institutions, housebuilders, and local authorities for State strategy generation to encourage institutional investment in the Private Rented Sector. (Montague, 2012). Despite an increase of 1.6 million renters since the early 1980s (Montague, 2012:4) The Montague report stipulates further measures taken by Government ensures continual growth and maintenance of “real momentum” (Montague, 2012:3) in the PRS, which was: “Inhibited by constraints affecting the supply of stock, by the treatment of rented housing schemes under the planning framework and by the need to create greater confidence among investors in the availability of good projects showing acceptable, secure returns.” (Montague, 2012:3) Identifying characteristics of the existing housing market preventing expansion of the PRS housing market, it notes that Build to Rent (BtR) developments aren’t differentiated within the planning system. This legislative indifference vastly reduces profitability as Section 106 of the Town and Country Planning Act of 1990, requires all new housing developments to include a minimum of 20% affordable housing. (Silver, 2018) The Montague Report repeals these stipulations as: “In many cases, it will be appropriate for authorities to waive affordable housing requirements in relation to schemes for private rental, or to the private rental component of larger schemes.” (Montague, 2012:20)
18 As discussed in the literature review, the involvement of the State in housing financialisation extends space “into the modernized mode of capitalist production.” (Lefebvre et al., 2010:187) where the radicality of post-crisis housing financialisation is revealed in that formulation of postcrisis housing policies bases itself upon the previous order, where: “the opportunity cost of an investment in housing is the price it could achieve on sale to an
owner
(Montague,
occupier, 2012:16
not
another emphasis
investor.” added)
During the first wave of financialisation directed economic flows towards a new frontier (owneroccupier housing), where post-crisis radicality is demarcated by the reversal of this sequence where finance leverages the State to formalise, legislate, and enforce its own logics for activation of urbanisation for capital accumulation. The Montague Report evidences that sufficient pressure exerted upon the State by financial institutions results in the deployment of formal legislative frameworks, (the planning system) to crystallise new asset classes for renewed cycles of capital accumulation. This new radical wave of financialisation isn’t just problematic in the existing perception of housing as a form of value storage, it additionally perpetuates a condition in which dispossession becomes the driving mechanism for accelerated financial
accumulation.
To summarise the legislative adaptations of housing for institutional investment mentioned in the report, the key strategy for increasing national influxes of institutional investment is through the re-categorisation of PRS projects in the planning system, creating new sub-categories for a novel housing solution maximising profitability through reduction of housing accessibility. The novel asset class emerging post-crisis from the economic restrictions triggered by the sub-prime mortgage crisis is Build-to-Rent. This asset class achieves financial viability through recognition that the housing market becomes unreachable for those younger than 37, the average age for first-time buyers post-crisis (Klingholz, 2020:online), and designed as longer term assets which generate financial value through rent collection, rather than value generated from the sale of an asset (as was the case for mortgages pre-crisis).
Legislating for Institutional Investors Post-Crisis
19
As owner-occupier models of housing provision were recognised as inaccessible due to their financial inviability, the recommendation for disregarding affordable housing materialised in the following 2013 amendment to Section 106 of the Town and Country Planning Act of 1990: “Unrealistic Section 106 agreements negotiated in differing economic conditions can be an obstacle to house building. The Government is keen to encourage development to come forward, to provide more homes to meet a growing population and to promote construction and economic growth. Stalled schemes due to economically unviable affordable housing requirements result in no development, no regeneration and no community benefit. Reviewing such agreements will result in more housing and more affordable
housing
than
would
otherwise
be
the
case.”
(Department for Local Government and Communities, 2013:2) Silver reports upon the ramifications of affordable housing repeals, noting that ‘viability assessments’ have become the primary mode for obligation avoidance, (Silver, 2018). Highlighting the importance of Section 106 obligations for equitable urban (re)production: ”Planning obligations under Section 106 of the Town and Country Planning Act 1990 are a mechanism which make [sic] a development proposal acceptable in planning terms, that would not otherwise be acceptable. They are focused on site specific mitigation of the impact of development such as providing local services and facilities, environmental improvement and public realm works.” (Silver, 2018:6) Viability assessments are “supposed to show the rate of return and the viable amount of contributions that should be expected by Local Authorities through both affordable housing provision and Section 106 agreements.” (Silver, 2018:7) but if developers are able to prove that the inclusion of affordable housing reduces profitability below an expected minimum, this obligation is voided. Yet the documents submitted as evidenced are shrouded by commercial confidentiality, preventing policy-makers, planning officers, and the public from investigating the data provided by housing developers. (Williams, 2018) In Manchester, the use of viability assessments resulted in no affordable housing units built between 2015 - 2017, despite 15,000 new homes being constructed and local council policy
20 requiring housing developments which contain greater than 15 units should contain 20% affordable units. (Williams, 2019) Beyond S106 avoidance, Silver points towards financial aid granted to institutional investors in the form of “various loans provided by local or national government [sic] to stimulate construction.” (Silver, 2018:6) This financing amounted to “£215 million [...] from Greater Manchester Housing Fund (GMCF) which has provided a series of loans to developers over the last three years [2015-2018].” (Silver, 2018:12) With a separate £50 national government loan, the total “amounts to £265 million, supporting the construction of 5,330 units with average financial support at £29,719 per unit, none of which are designated for affordable or social housing.” (Silver, 2018:12) As national government conditions for financing GMHF disallows the use of local government loans for the construction of affordable housing. (Silver, 2018) Instead, financing was directed towards the Build-to-Rent (BtR hereafter) sector, following the demise of the owner-occupier market, where “the number of residential units in the [owner occupier] development pipeline reached a high of over 4,000 units in 2006 before dropping to less than 500 units in 2010, 2011 and 2012.” (Silver, 2018:5) BtR projects have therefore “emerged from the local and national government focus on remaking the private rented market [...] institutionally friendly” (Silver, 2018:5). The Manchester Model of production reconfigures housing as a spatial fix and a site of extraction (Rolnik, 2019) through providing State guarantees to entice and secure institutional funding. Where the effectiveness is evidenced through an investigation of a specific institutional arrangement, Manchester Life Development Corporation, and the transformation of a formerly derelict neighbourhood of north Manchester, Ancoats.
Global Landlords in Post-Crisis Manchester
Deployment of the Manchester case study through revelation of operative shells ignites an analysis of a specific institutional arrangement which reinforces claims of post-crisis radicality of
21 housing financialisation. So far, charting the emergence of institutional investors has revealed their emergence from conditions formalising capitalist urban (re)production by neoliberal governance. This case study of Manchester Life Development Company exemplifies how these conditions materialise as a crystallised, state-backed housing ‘solution’ perpetuating extractive rental hegemonies. This case study has been chosen due to the visibility of the legislative procedures and manipulations, in addition to the clarity of the architectural materialisation. The Manchester Life Development Corporation (henceforth referred to as Manchester Life) was founded by Abu Dhabi royalty, Sheikh Mansour Bin Zayed Al Nahyan, and then leader of MCC, Sir Howard Bernstein in 2014. (Jupp, 2014) The partnership employs a property-led regeneration approach to create a ‘flagship’ neighborhood revival scheme in Ancoats, (Silver, 2018) strategically announced as The Eastlands Regeneration Framework, involving the construction of “more than 6,000 new homes.” (Jupp, 2014:online) “A planning consultant described this [using regeneration frameworks] as “the Manchester way”. He claimed that to fast-track desired developments, the council tended to include controversial proposals in regeneration frameworks, which are not subject to the same scrutiny as local plans.” (Collins, 2019:online) Controversy nessicating tactics for scrutiny avoidance arises from the involvement of Manchester Life’s partner, Abu Dhabi United Group (ADUG henceforth), which was “originally formed as the investment vehicle for the takeover of [Manchester] City [FC] in September 2008.” (Jupp, 2014:online) Tracing the organisational structure using financial reports via Companies House reveals the first financial maneuver performed, as the controlling shareholder of Manchester Life is a subsidiary of ADUG named Loom Holdings holding a 51% share. Majority ownership of Manchester Life by Loom Holdings, a limited company, (Manchester Life Development Company 2, 2020) grants financial benefits through commercial confidentiality clauses (Silver, 2018) despite the fact that a democratically elected public body is supposedly an equal partner. Writing in 2019, Collins states: “Manchester Life has developed six big blocks in Ancoats and New Islington, and is building three more. The total value of the schemes will be about £330m-plus, according to property experts. Manchester Life said it did not recognise that number and that the valuation was commercially sensitive. Abu Dhabi invested £165m in building the first six
22 blocks.” (Collins, 2019:online) In addition to domestic commercial confidentiality, Loom Holdings is registered as an offshore company domiciled in Jersey, (Manchester Life Development Company 2 Limited, 2020) hence granted further financial benefits applicable for laterally traded assets. This financial tactic results in avoidance of three substantial tax payments to HMRC (Her Majesty’s Revenue and Customs): (1) Capital Gains Tax (CGT), which “is paid on the profit made due to the difference in the price of buying and selling an asset.” (Bower, 2018:online emphasis added) (2) Stamp Duty Land Tax, which “is payable in England on residential property costing over £125,000, and rates range from 5% to up to 15% for properties over £2 million.” (Bower, 2018:online) And (3) Inheritance tax, “which currently stands at 40%” (Bower, 2018:online). Using Collin’s acquired valuation data for the current Manchester Life property portfolio, a conservative estimate for avoided tax calculated on Stamp Duty alone amounts to £49.5 million (see appendix for calculation). Please note that this calculation assumes the sale of the entire property portfolio at once, and is being used to demonstrate potential financial gains through deployment of financial apparatus. Connecting Manchester Life to global theories which propel the central argument of post-crisis housing financialisation radicality, financially motivated institutional investors reconfiguring housing as a mode of capital existence “vastly transcends the territoriality of extraction and wholly blends into the circulatory system of capital, which now transverses the entire geography of the earth.” (Arboleda, 2020:14) Connecting usufructuary land rights to geographies of extraction, and acknowledging State complicity in the development acquisitional infrastructure, as: “The acquisition of foreign land is not a lone-wolf event. It requires, and in turn stimulates, the making of a vast global market for land. It entails the development of an also vast specialised servicing infrastructure to enable sales and acquisitions, secure property or leasing rights, develop appropriate legal instruments, and even push for the making of new laws to accommodate such purchases.” (Sassen, 2018:73) Sassen’s argument is evidenced in the primary evidence presented thus far, as the tracing of institutional investment (and marketisation of public land) has been enacted through legislative revisions, prominently materialising leasing securitisation under the stewardship of Manchester
23 Life. The Manchester Model of delivery has thus pushed proposed alterations to legislation to the nth degree. On the marketisation of land, the Montague report recommends a planning system revision “to ensure that new homes remain in the rental sector for a fixed period of years” (Montague, 2012: 20) where the report recommends 20-30 years, (Montague, 2012) Manchester Life are leasing public land for almost a millenia. In 2015 the Weaver’s Quay site was sold “for £420,000 to a company owned by Loom [Holdings] on a 999-year lease. The plot is now worth £44m.” (Collins, 2019:online) Despite clear profitability, there is no inclusion of affordable housing in any of their schemes, in response to an enquiry sent by Collins, Manchester Life states: “None of the schemes would have been “financially viable” had Manchester Life been obliged to meet standard requirements on affordable housing or financial contributions.” (Collins, 2019:online) Despite their own guidance states “that 20% should be a “starting point”” (Collins, 2019:online) Additionally, no Section 106 contributions were made and viability assessments proving inviability remained closed to the public, despite the financial involvement of a democratically elected body. Regarding claims of ‘financial unviability’, the entire Manchester Life property portfolio generates “up to £10m a year in rent” (Collins, 2019:online) of which MCC “receives none of the income”. (Collins, 2019:online) Funnelling rental income towards tax havens further reveals the reformulation of post-crisis housing beyond a spatial fix and towards a site of financial extraction. These sites of extraction, or ‘mines’, are typically identified with traditional industry but are re-defined by Arboleda as: “not a discrete sociotechnical object but a dense network of territorial infrastructures and spatial technologies vastly dispersed across space.” (Arboleda, 2020:14) Within these dense networks, further expansions of post-crisis financialisation can be extracted through the organisational structure of Manchester Life itself, self-marketed as “the Investor, developer, landlord, agent, and manager” (Manchester Life, 2020:online) Notably, the Montague report states that transitioning “to a long-term residential investment market dependent only on income returns is therefore likely to require higher rents, or lower land, construction and management costs.” (Montague, 2012:15)
24 The operation of Manchester Life activates all these criteria through marketisation of above average rent, automation of rent collection, and self-integration into construction and property management processes. (Manchester Life, 2020) All of which financially optimises the extraction process through centralisation (Fields 2019). Drawing parallels with Fields’ research on Single Family Rentals in the US post-crisis, the organisational structure of Manchester Life utilises Fordist approaches to housing marketisation, (Fields, 2019) where availability of units, lease length, and additional rental features (e.g. bike and car parking) can be accessed and selfcompleted using their online platform. (Manchester Life, 2020) Whilst Fields’ research centres upon the use of automated processes for the acquisition of property from the investor side client side deployment similarly optimises capital extraction processes through centralisation (Fields 2019), albeit at a smaller financial scale. Yet still perpetuating capitalist modes of urban (re)production by “centralising the means of production” (Marx and Engels, 1977:85), and concentrating property ownership. (Marx and Engels, 1977)
Manifestations of Institutional Investors
Utilisation of Institutional Literature for Build-to-Rent Identification
The Montague report details legislative operations of BtR schemes, but limits direct design guidance as architectural characteristics impinges upon a developers ‘brand’ (Montague, 2012) the sole recommendation of architectural materialisations is that: “the market would benefit from
25 a clearer understanding of what tenants should have the right to expect as regards: ●
the quality of the accommodation and the standards of construction,
●
the level of energy efficiency and sustainability of the building,
●
the building owner’s promises as regards the maintenance and refurbishment of the premises, and
●
the professionalism of the management service.” (Montague, 2012:28)
Purposeful limitation of governmental architectural guidance has resulted in a vast pool of literature offering general guidance for BtR profit maximisation, therefore institutional advice has been leveraged to formulate a checklist for BtR identification in Manchester. The following articles have been used to construct these criteria: ●
‘Optimising Build to Rent Returns’ authored by Klingholz, of International architectural and engineering firm, AECOM;
●
‘What is ‘Build-to-Rent’ or ‘PRS’ and how can developers capitalise on’ by International architectural and master planning firm, by Cook and Barton of Chapman Taylor and;
●
‘The 8 Ingredients for the Perfect Build to Rent Recipe’ by Donati, of North American finance magazine, Forbes.
Build-to-Rent Formula
All three articles stress “the most successful BtR schemes are in urban locations” (Klingholz, 2020:online) with “easy access to good transport nodes,” (Cook and Barton, 2020:online) as “the location needs to be right to support the density and sustain the community.” (Donati, 2018:online) Emphasis of urbanity in development reveals the expected demographic of BtR schemes, as “[i]ndustry reports indicate today’s typical BTR tenants are young professionals” (Cook and Barton, 2020:online) as “[t]he average age of people looking to move into a first home in the UK was between 25 and 35 years old in 2016”. (Klingholz, 2020:online) This demographic is currently underserved in the post-crisis housing markets “as most new home developments across the UK are 3-4-bed houses.” (Klingholz, 2020:online) To counter the current market offering, “[l]eases and designs should allow flexibility for tenants, and potential future changes in living trends, such as moves towards more co-living or micro units.” (Cook
26 and Barton, 2020:online) Further securitisation of income through diversification is encouraged through combining housing with “retail space or other commercial uses. It can be part of the ‘co’ revolution with co-working and co-living creating outward facing communities.” (Donati, 2018:online) The provision of a range of tenures is identified as a safer investment as tenant requirements change in accordance with their lifecycles. A BtR scheme can therefore be identified if buildings are (1) mixed use (e.g., ground floor retail space with housing above) or (2) contain a blend of apartment types to cater to a range of lifestyles. Additional amenities encourage residents to mix with one another as “[s]tudies show that people who know one other person in a building are 75% more likely to renew their tenancy. For people who know two other people, this rises to 90%.” (Klingholz, 2020:online) these amenities “should be factored in as part of initial proposals and ongoing operational assumptions.” (Cook and Barton, 2020:online) These ‘secondary amenities’ are mentioned in the Montague report as ‘brand specific’ configurations of BtR schemes (Montague, 2012) where “[a]dded amenities, such as a concierge, are part of the BtR lifestyle formula, and this is where BtR distinguishes itself from the Build-for-Sale sector.” (Cook and Barton, 2020:online emphasis added) These “facilities might include workspaces, a club room, communal lounges, roof terraces and gyms.” (Cook and Barton, 2020:online) Evidently, these amenities encourage longer term rents through maximisation of the building use and fostering ‘community’, crucially distinguishing BtR from other forms of housing provision. To effectively manufacture profitable communities “200 units is deemed to be the minimum ‘critical mass'’” (Klingholz, 2020:online) but “most operators/investors seem to target 250” (Donati, 2018:online) therefore prescribing an architectural massing of a BtR project as medium or high density.
(Klingholz,
2020)
In addition to critical mass making financially viable secondary amenities, construction quality is increased as these long term assets retain their value through minimisation of operational costs. “BTRs with reduced fixed running costs will offer investors a greater chance of delivering expected returns over the development’s lifetime.” (Cook and Barton, 2020:online) To achieve predicted returns “finishes need to be high-quality, robust, easily maintainable, readily accessible and designed to last.” (Klingholz, 2020:online) As a novel asset class, “BTR is particularly suited for modern methods of construction, such as volumetric modular. This has a range of benefits, including faster build rates so investors can open up rental income streams sooner”. (Donati, 2020:online)
27
As recommended by the Montague report, the expected lifespan of a BtR scheme is one of “long-term sustainable thinking” (Cook and Barton, 2020:online) where, “[t]o maximise returns, developers and investors should work with operators to ensure that the product is built and designed specifically for BTR use.” (Cook and Barton, 2020:online) Clearly the strategies of institutional investors have extended beyond Fields’ study of technologically activated mass property acquisition and towards automated “building management [which] enhances and protects the long-term value of a development.” (Klingholz, 2020:online) Distinguishing itself from the traditional PRS, BtR offers tenants the opportunity to “customise, paint, fix items to the walls and personalize the space. [As] [t]he more they can make it feel like their home the longer they are likely to stay.” (Donati, 2018:online) Whilst advice suggests that BtR schemes provide “a comfortable and affordable place to stay for a secure length of tenure.” (Klingholz, 2020:online) Here inclusion of theories of extraction are paramount in the problematization of BtR schemes for housing provision, as ‘communities’ are manufactured by institutional investors for profit where internal interactions are mediated through finance (activated by apartment lease purchase). Yet, as revealed by Collins, the revenue generated from these ‘communities’ are not retained in the local economic sphere, instead wired to the heights of finance. (Rolnik, 2019) Commodifing social relations through manufacturing communities upon the precipice of finance. Commodification of The Urban is “best understood as a performative discursive act that attempts to frame away the characteristics of subjective urban participation that are essentially experiential and that thus require a history of participation to “possess”” (Pierce and Hankins, 2019: 1533) Where the performative act of utilising BtR amenities centralise performances of financially extractive operations alienating geographically adjacent communities through construction of extractive infrastructures coalescing as a architectural materialisation.
Cotton Field Wharf: Build-to-Invest
Image: (Hydrock, 2020:online) Previous chapters have investigated novel legislative identification of BtR projects. This final section focuses upon the building, where all previously discussed knowledge is condensed upon a single scheme for the connection of global theory to a supposedly discrete sociotechnical object, which is revealed as a confluence of invisible infrastructures vampirically extracting value through provision of ‘sufficient’ accommodation. The development in focus is Cotton Field Wharf, a Manchester Life project in the heart of Ancoats. The inclusion of a self-proclaimed BtR project (Manchester Life, 2020) is used to connect global theories of neo-marxist urbanism and political ecologies to specific typologies, providing another lens in which to critically analyse material architectures to identify, and problematise, the immaterial architectures required to construct and sustain post-crisis ‘solutions’ to housing. With this in mind, Cotton Field Wharf is selected due to its use by Manchester Life as a ‘flagship’ canal-side development. (Manchester Life, 2020) Aligned with
the BtR identifiers discussed in the previous section, Cotton Field Wharf is revealed to qualify, cementing the claims and theories in this dissertation.
Figure 01: Ancoats In Context of Greater Manchester Source Image: (Google Maps, 2020:online)
Figure 02 Proximity of Cotton Field Wharf to City Centre Source Image: (Google, 2020:online)
Shown in Figure 02, Cotton Field Wharf is located 10 minutes walk from Manchester’s main transport hub, Piccadilly Station, and 12 from the main retail district, Market Street, Cotton Field Wharf (CFW hereafter) additionally has access to New Islington tram stop which offers services to the outer limits of Manchester’s conurban, e.g., Bury, Wythenshawe.
The efficacy of
demographic targeting in the redevelopment of Ancoats through is illustrated using data published by Manchester City Council using Mosaic, “a population segmentation tool that uses a range of data and analytical methods to provide insights into the lifestyles and behaviours of the public in order to help make more informed decisions.” (Manchester City Council, 2016:1) Ancoats is identified as a ‘Class J41’ neighbourhood, where Class J41 is defined as ‘Rental Hubs’ with “Educated young people privately renting in urban neighbourhoods (typical age 2630)” (Manchester City Council, 2016:2), constituting 35.87% of the Ancoats and Clayton population, above Manchester’s average of 26.94% (Manchester City Council, 2016). As figure 03 shows, the weighting of these households is geographically uneven, with vast swathes of Class J households residing on the city centre periphery. Understanding concentration of a singular demographic is explicable by the efficacy of Manchester Life’s portfolio which caters to this targeted audience.
Figure 03: Class J41 Concentration at City Centre Periphery Source Image: (Manchester City Council, 2016:online)
Figure 04: Apartment Typologies of Cotton Field Wharf Image: (Manchester Life, 2020:online)
Figure 04 shows the mix of apartment typologies which reveal the programmatic flexibility which, in addition to ground floor commercial spaces, provides revenue securitisation through diversification. (Hydrock, 2020) Externally are canal-facing bars opening onto public space,
whilst internal amenities include: “clubroom, gym and fitness studio, 128 parking spaces, secure cycle storage.” (Hydrock, 2020:online) with “on-site maintenance, high speed internet, and a 24h concierge.” (Manchester Life, 2020:online) All of these secondary amenities are made financially viable as critical mass in this development is exceeded. The 302 apartments are constructed using a structural system consisting of slender floor plates and “blade columns, to minimise floor thickness and maximise the size of the apartments.” (Hydrock, 2020:online) Further high quality architectural features are environmentally friendly internal fixtures and fittings, shown by the EPC (Energy Performance Certificate) which measures a scheme's environmental impact. However, the guise of ‘responsible’ construction is a thin veil, as the partnership with a billionaire with vast oil reserves have facilitated Cotton Field Wharf’s ‘environmentally friendly’ construction. (Manchester Life, 2020) Additionally, evident is profitability motivating the achievement of a B EPC rating (Stroma, 2017) As: “It is estimated that, compared to dwellings rated G, dwellings rated F sell for nearly 6% more, dwellings rated D and E sell for approximately 6% and 8% more, C rated dwellings sell for around 10% more and dwellings rated A or B sell for approximately 14%
more.”
(Department of Energy & Climate Change, 2013:18) Figure 05: Cotton Field Wharf Apartment Typologies Image Source: (Manchester Life, 2020:online)
Summarising the architectural analysis of Cotton Field Wharf, figure 06 illustrates the operations of a traditional mine, which figure 07 maps onto the Manchester Life case study. As an extractive industry, PRS BtR schemes are an exploratory route of capitalism for gaining access
to capital, for extraction to financial institutions (who finance the initial excavation). As previous iterations of housing financialisation have shown, the specialist servicing infrastructures of housing financialisation are as varied as the tactics. The initial wave of financialisation connected domesticity to the financial heights, where mortgages were the mode of operation of capital. Cotton Field Wharf represents the materialisation of a far darker reality; where sociality, a key component of the human condition, becomes a ‘design feature’.
Figure 06: Summary of Mining operations Figure 07: Summary of Case Study Images: Author’s own, Mining Labels: (Encyclopædia Britannica, 2020)
Conclusion
Connecting two theoretical strands pertaining to contemporary capitalism, this dissertation seeks to contribute to existing debates surrounding the role of finance in urban (re)production, highlighting the emergence of institutional investors and their centrality in the formulation of financially extractive housing ‘solutions’. Post-crisis architectural typologies de-territorialise political economies through invention and activation of financial infrastructures formalised by a capitalist State. Drawing attention to the shells of operation, this dissertation reveals that these specific architectural typologies are both a formality, and finality, as Build-to-Rent schemes are revealed as infrastructural confluences, where a sociotechnical object is revealed as a product of expanding global capitalism. An effective response to financialised urban (re)production therefore requires revisions to perceptions of resistance which disregard urban contestation as a “historical (and thus potentially winnable, or closable) conflict between oppressed and oppressors” but “as a pluralist, always ongoing (irreconcilable) contestation of terms and aims” (Laclau and Mouffe, 1987 cited in Pierce and Hankins, 2019:1530) The Manchester Life Development Company is an extreme crystallisation of capitalist urban (re)production, and independent newspaper ‘The Meteor’ published numerous articles on other materialisations in Manchester. (Bower, 2018). Unfortunately the restrictions imposed by the 2019-2020 Coronavirus Pandemic resulted in a lack of primary information which would have contributed to the architectural analysis of Manchester Life’s property portfolio. Despite this, the wealth of online information gathered allowed for an analysis which well connects global theories to specific materialisations of institutional investors. To continue the research questions posed by this dissertation, further case studies would be gathered and integrated into architectural analyses to create a fluid methodology for typological identification of Build-to-Rent schemes. A stem of further research could involve typological investigations regarding financiality of schemes through dissemination of specific programmatic configurations to calculate precise financial values of specific components included in Build-toRent schemes.
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Appendix
Calculation of total avoided Stamp Duty Tax if entire Manchester Life portfolio (2020) was to be traded at once: Property portfolio value * Tax on selling of assets valued above £2 million, 15% = Total Stamp Duty avoided 330 000 000 * 0.15 = 49,500,000
