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Hardly a day goes by without another dooming headline on property investors taking over our cities. Yes, we do live in the age of financialisation. And yes, financial motives have crept into our governing institutions. But the situation is extremely complex. Blaming one actor group in urban development is the easy way out, not a solution.

A surge in global foreign investment into residential property, corporate buying, extensive luxury housing production, and an affordability crisis: Scholars such as Saskia Sassen (2015) have indicated an emergent new phase for cities. As Fredrik Gertten, the director of the award-winning 2018 documentary PUSH, which explores the connection between global finance and housing, explained: “the housing crisis is now affecting middle class families across the world. Without a doubt, it is going to be the biggest political challenge in the next coming years.” 

Gertten is probably right. Issues of housing affordability are no new struggle for many lower income groups and evidence on the effects of gentrification, exclusion and segregation is vast. But now is the middle class increasingly affected: families are unable to purchase homes, and qualified starters in the workforce and keyworkers (nurses, teachers, police officers or fire-fighters and the like) face massive competition to access housing in many cities. As a result, the housing crisis has moved to the centre stage of our collective awareness. Public outcries are often perplexed and dismayed – and the prime focus is property investors.  

Few differentiations, many generalisations

From the field of social psychology, we know that humans tend to process information by categorising and classifying their social environments. Cognitively, categories help us to make sense of the complex world around us. And it is no secret that the media is prone to blunt generalisations. However, what may come as a surprise is the superficiality with which property investors are perceived in much of the existing Urban Studies literature. The predominantly critical literature slowly diversifies, with some new scholarly work inviting us to understand the dynamics of property markets better (Campbell et al. 2014), as well as the diversity of the actors within the property industry (Adams and Tiesdell 2012), and even to ‘see like an investor’ (Raco et al. 2019). Nonetheless, our understanding of property investors remains limited.

Property investors are frequently presented as a homogenous group with a unified interest. In fact, contrasting the explanatory Property and Real Estate Studies literature, very few academic papers exist in Planning and Urban Studies in which property investors are internally differentiated or sub-categories discussed. Even more unsettling, the terminology of property investor is often interchangeably used with that of property developer. Ask anyone actually working in the property industry with genuine interest, and you will likely be able to find both obvious and subtle differences between investors, developers, companies, branches, and individual colleagues. 

This lack of differentiation becomes particularly problematic in the critical literature that exhibits a rather generalised understanding of property investors as ‘the bad guys’ without sufficient supporting evidence. In actuality, neither the property industry nor public sector actors can be generalised under such bold categories, due to the extreme diversity of actors and actor behaviours at play, as well as the very different decision-making roles and positions that exist in both fields. 

Many of our students will acquire jobs in public office. But an equal amount will work in the private sector. What about the recent graduate of the MSc Urban and Regional Planning programme who starts his or her first job in a real estate investment firm? What messages are we conveying to our students? How do we teach them to do a better job in this market-dominated planning field? We need to stop thinking in dichotomies. It is not the good and the bad. And it is not the one public versus the one private. 

Disentangling complexities 

We are by no means denying the impact that property investors have in increasingly financialised urban development settings, and the consequences incurred in terms of housing production and affordability. But investors did not miraculously emerge or siege our cities. Instead, they continue to play a variety of important roles in them. As such, the 2019 Open Research Area for the Social Sciences/ORA-funded WHIG Project (“What is Governed in Cities: Residential Investment Landscapes and the Governance and Regulation of Housing Production”) aims to examine the inter-relationships between contemporary investment flows into the property markets of major metropolitan centres (Amsterdam Metropolitan Area, Greater London, Greater Paris) and the governance arrangements and public policy instruments that are designed to regulate them.

In the 1990s, Susan Fainstein in her book The City Builders was one of the first critical Urban Studies scholars who placed property developers central in her analysis of urban development practices in London and New York. Today, the property industry is far too complex, too internally stratified and too sophisticated to be approached from a broad developer vs. investor perspective. Therefore, the WHIG project was initiated to provide new insights into the diversifying and rapidly-changing relationship dynamics between property market and public sector actors. 

Disentangling complex inter-relations between actors, organisations and institutions in contemporary property development can be overwhelming at times, but it should not allow us to settle on convenience. By singling out and scapegoating one umbrella actor category such as property investors, we ignore the human factors of the property industry. If for example markets solely operated according to rational and predictable principles, economists would be out of jobs. We need to understand interactions between these actors, their formal and informal relations, decision-making processes, objectives and investment priorities, and different ways of thinking. The gap in knowledge is deep, and the list goes on. 

By demanding a more nuanced understanding of property investors, we are neither complicit in supporting market-driven urban development practices or even practices of manipulation and corruption, nor are we siding with powerful actors. On the contrary, we believe that knowledge is power to change the status quo. It should be clear by now that when it comes to property investors, there is room for improvement in Urban Studies: We have to push the frontiers of existing knowledge with critical research which – instead of making bold claims based on shallow data and generalisations – is based on fair and thorough empirical evidence.

Tuna Tasan-Kok is Professor of Urban Governance and Planning, and Co-Principal Investigator of the WHIG Project (“What is Governed in Cities: Residential Investment Landscapes and the Governance and Regulation of Housing Production”).

Sara Özogul is Postdoctoral Researcher in, and Project Manager of, the WHIG Project in Amsterdam. The 3-year ORA-funded (Open Research Area for the Social Sciences) project started in March 2019 and is affiliated to the Centre of Urban Studies.