X Properties (EN) E-Book

• Herausgeber: EECLECTIC
• Kategorie: Wissenschaft und neue Technologien
• Serie: Berliner Hefte zu Geschichte und Gegenwart der Stadt
• Sprache: Englisch

Seitenzahl: 190

Veröffentlichungsjahr: 2023

Beschreibung

Berlin’s real estate market is still booming, neighborhoods are “developed”, people are forced out of their living environments. Residential, work and commercial spaces become investments for real estate corporations, trust funds, and anonymous owners, while a politicized tenants’ movement demands the right to the city for all. But who are the real players behind the eco­nomic exploitation of urban space? What allows them to act the way they do – and how can their actions be politically and societally monitored, controlled, and thwarted? X Properties examines the impact of financial capital on the social and cultural production of the city, its forms of relationality and subjectivity. The book is published on the occasion of the homonymous research and event project at neue Gesellschaft für bildende Kunst (nGbK). It combines case studies from Berlin with global perspectives on the de-/financialization of the city.

Leseprobe

Berlin Journals—On the History and Present State of the City #11

X Properties

Joerg Franzbecker, Naomi Hennig, Florian Wüst (Eds.)

Berlin’s real estate market is still booming, neighbor­hoods are “developed,” people are forced out of their living environments. Residential, work and commercial spaces become investments for real estate corporations, trust funds, and anonymous owners, while a politicized tenants’ movement demands the right to the city for all. But who are the real players behind the economic exploitation of urban space? What allows them to act the way they do­—and how can their actions be politically and societally monitored, controlled, and thwarted?

X Properties examines the impact of financial capital on the social and cultural production of the city, its forms of relationality and subjectivity. The book is published on the occasion of the homonymous research and event project at neue Gesellschaft für bildende Kunst (nGbK). Texts by Christian (Syndikat collective), Christoph Casper, Jana Gebauer, Kathrin Gerlof, Katrin Lompscher, Louis Moreno, Raquel Rolnik & Isadora Guerreiro & Paula Freire Santoro, and Pheli Sommer, together with photographs by Kim Bode, combine case studies from Berlin with global perspectives on the de-/financialization of the city.

... something significant has changed in the way capitalism has been working since about 1970. (David Harvey, 1989)

Table of Contents

Joerg Franzbecker, Naomi Hennig

What Is Financialization to Us?

Kim Bode

Practices of Commoning

Image Gallery I

Image Gallery II

Image Gallery III

Florian Wüst

Steglitzer Kreisel

Naomi Hennig

Pandion/DWS at Kreuzberg’s Prinzenstraße

Interview with Christian (Syndikat collective)

Syndikat bleibt!

Christoph Casper

Benefits of the Freedom of Information Act

Research on the Berlin Real Estate Portfolios of Albert Immo 1–6 S.à.r.l. and Victoria Immo Properties I–VIII S.à.r.l.

London Walk with Louis Moreno

A Tour from Euston to King’s Cross/St Pancras

Naomi Hennig

Preface to the Texts of Louis Moreno and Raquel Rolnik, Isadora Guerreiro & Paula Freire Santoro

Louis Moreno

Always Crashing in the Same City: Real Estate, Psychic Capital, and Planetary Desire

Raquel Rolnik, Isadora Guerreiro, Paula Freire Santoro

Housing Policies between Financial Extractivism, Needs, and Rights

Jana Gebauer, Kathrin Gerlof, Naomi Hennig, Katrin Lompscher, Pheli Sommer

Thinking and Making the Non-financialized City?

A Conversation about the Possibilities of Escaping Financialization and Creating Alternatives

What Is Financialization to Us?

Joerg Franzbecker

Naomi Hennig

In the last days of December 2019, rumors began circulating about the commercial building at Oranienstraße 25 having a new owner. Within a few days, a letter from the property management office confirmed that Berggruen Holding, whose corporate practices had already strained tenants and local residents, sold the building to a so-called Victoria Immo Properties V S.à.r.l. based in Luxembourg. It came as little surprise that the company was registered in another country because the idea of a real-life, local landlord had long since become obsolete. However, the new owner of the building was no conventional real estate company. Instead, it was part of a centrally managed corporation in which each party owned real estate while the actual owners remained undisclosed. From the onset, the research pointed to a so-called real estate Spezialfonds1 limited to a term of ten years.

For a considerable time now, we have all been—permanently and without consent—confronted with various actors and products from the financial sector, as residents, tenants, persons saving for retirement, those with inheritances, the precarious, the destitute, workers, employees, free­lancers, and media and other consumers living in the city. However, in many cases, we only have a vague understanding of their logic and dynamics, redistribution mechanisms, and the political framework that gives substance to so-called financialization.

Prompted by the sale of Oranienstraße 25, our nGbK project group X Properties began its quest to understand the distortions and contexts of this financialization—without, however, the pretense of providing concrete answers. Even now, we can only formulate questions better; we can only focus on the livable city for all as a goal and remain vague on the stages of its transformation. For now, we pursue the specific question of ownership in the urban landscape; we continue to deal with hegemonic and common infrastructures; we ask how the increasing financialization of life, work, and everyday existence affects our (understandings of) bodies, relationships, and movements.

In doing so, we align ourselves with numerous other tenants’ and neighborhood initiatives that have dealt with the concrete and structural upgrading of urban spaces and the displacement of lively localneighborhoods in recent years and decades. Ever since the tenants around Kottbusser Tor joined in 2011 to form Kotti & Co and became experts on housing issues, we realized the impact that both research into the so-called Mieten­wahnsinn2, conducted by civil society, and broad protest movements can have. Moreover, with the onset of the referendum on the public incorporation of large housing companies—Deutsche Wohnen & Co enteignen3—a completely new, broad-based discursive, political, and juridical dimension was developed.

As residents, business owners, and users, the question arises why we are concerned with notions of rent-controlled housing, the financial market, and investment funds—rather than focusing our already finite resources on the survival, connection, and sharing within inclusive and diverse communities. In other words, why don’t we directly nurture a communal, livable city for all without the detour of wanting to understand financialization?

Through various experiences, we realized that there is a dire lack of knowledge about financialization, especially among political decision makers—that is, among those who enable its free development structurally and promote it politically. As will subsequently become apparent, those of us who strive for a common city are not only affected by its financialization, but are also co-opted by it, maintaining it through our actions. That is why we must first understand it to overcome it.

What has happened so far

From many others, we learned that the financial sector pri­marily accumulates its profit through trade in financial products and speculative transactions in the financial market rather than through trade or the production of commodities. The term financialization refers to the increasing importance and interaction of financial motives, financial markets, financial actors, and financial institutions in national and international economies.4 It is all about—irrespective of the commodity invested in, and betting on the rise or fall of its value over time—the return on investment, i.e. the effective interest rate of the revenue measured in percentage points. In the psychotic world of competition, the percent­­age increase in revenue is perhaps even more important than the real increase in value.

Furthermore, we learned that it was first through the liberalization and de­regulation of the financial market that financial players could engage in a global network. This state of affairs, which today is well-known as neoliberalism, began to emerge at the end of the 1930s, when the economist Louis Rougier invited a group of economists to Paris to discuss Walter Lippmann’s theories on collectivism and a planned economy.5 As a departure from this, the state-supported mechanism of market value was to become the driving economic force. Later, Friedrich von Hayek and the Mont Pèlerin Society elaborated on these notions. It took forty years for this school of thought, which long wallowed in the drawers of wayward ideas, to fully gain momentum, and fixed exchange rates were abandoned in monetary policy with the collapse of the Bretton Woods Agreement in 1973. In the face of a broader accumulation crisis, the governments of the United States and United Kingdom, headed by Ronald Reagan and Margaret Thatcher, respectively, began privatizing state-owned assets, breaking the organizing power of wage workers, and deregulating the economy, especially the financial economy.

With network-based technological development, financial trading accelerated with virtually no limits to its uncontrolled expansion. Global infrastructures, trading centers, deregulation, and new legal frameworks facilitate international investments in countless jurisdictions—worldwide and at high speed. Moreover, sovereign wealth funds and central banks are pumping additional liquidity into the financial sector, decisively contributing to the transformation of the financial economy. Once serving the real economy of production by providing credit, finance became the driving force of a globally operating economy. We will continue to see that the so-called free market depends, and can count on political support from states. Painful at best, it demonstrates that the prevailing political order is obviously not interested in sustainable development and promoting a common welfare.

David Graeber and also Joseph Vogl emphasize the role of financial capital and credit systems, whose social and economic function was already established before the era of industrial capitalism based on manufacturing.6 Markets for exchange, securitization, and speculative bubbles already existed in the pre-capitalist Middle Ages. As early as the fifteenth century, powerful trading dynasties like the House of Fugger profited from what is now known as arbitrage trading, a practice that continues to be central to the business of financial institutions and securities traders. It takes advantage of local or temporal price differentials to create value—an income source that historically preceded that of exploiting wage and factory labor. The earliest joint-stock companies, the Dutch East India Company and the British East India Company, were seventeenth-century global colonial trading enterprises. Their massive equipment and facilities were only made possible by investments of wealthy merchant houses, who shared risks and profits proportionately.

As a form of credit and financial instruments, the functions of accumulated trading capital have historically been liquidity, temporal and spatial elasticity, and so-called leverage. Those who have greater financial resources at their disposal have the power to afford larger projects: equipping fleets, establishing colonies, building skyscrapers, or similar ventures. The burden of debt outweighs the promise of speculative returns. Those who do not have access to credit do not become (colonial) entrepreneurs—at least not on a grand scale. Little has changed in this respect since the fourteenth century when the Spanish crown raided the New World, funded by the financial conglomerates in Augsburg, Genoa, and Seville.

Therefore, a hierarchy between “true” productive capital and “fictitious” financial capital—the latter as a parasite of the productive sector—seems neither historically nor currently accurate. However, the transition between these two forms and the peculiar “liquefaction” that increasingly accompanies financialization would need to be investigated, a process whereby things and (exchange) activities are first commodified and, in the next step, made to resemble financial capital. A key to understanding this structural change lies in the analysis of urban development policies and public budgeting.

A historic moment, which may be considered the Big Bang of public sector financialization, was in 1975 when New York City, threatened by impending bankruptcy, sold off its own debt.7 Because investors initially expressed little interest in the municipal bonds, local unions were coerced into repurposing their members’ pension funds to buy up the municipal bonds. The feat was accomplished and the imminent threat of bankruptcy averted. The banks, to whom the city was already heavily indebted, rejoiced. No default and no burst credit bubble. However, the debts were merely secured by new debts. Only this time, the indebted party was different: the workers, employees, and citizens of New York City.8

Subsequently, this model was multiplied globally. Fiscal crises prompt the privatization of municipal property and further deregulation of the financial sector. This is how those states, local governments, and public treasuries that transferred their debt, public services, infrastructures, or citizens’ savings to the global financial market became hostages of its volatility.

In Germany, the liberalization of the housing market was made possible by abolishing the Wohnungs­gemeinnützigkeits­gesetz9 of 1990. Intense debate about reinstating non-profit public housing has again emerged, and it was endorsed by the coalition agreement between the newly elected parties of the German federal government in 2021. This shows that even those politicians explicitly hostile to the needs of tenants have become aware of the disaster of displacement. The study Neue Wohnungsgemeinnützigkeit, published in 2017 by Andrej Holm, Sabine Horlitz, and Inga Jensen, lays out a foundation for how this non-profit status of public housing may be revised.

The expansion and differentiation of the financial market were further made possible by the four-step revision of the Financial Market Promotion Act from 1990 to 2002, which would also include the financialization of the real estate market, especially since the financial crisis of 2007–08.

At the same time, the state of Berlin sold off municipal real estate assets on a grand scale. The revenues (meager, from today’s perspective) were primarily used to compensate for budget deficits in the wake of the so-called Berlin Bank Scandal in 2001. For well-financed investment funds and emerging real estate groups, the tranches offered by the Berlin Senate in the form of thousands of apartments, in some cases entire residential areas, opened the floodgates of the city.

In the meantime, the great surge of privatization has come to a halt. Those bundled properties and real estate packages comprising of hundreds or thousands of housing units, and favored by large investment funds, have become rare. Financial actors are left to seek more complex strategies of value-adding, with the aim of generating profits along the entire chain of residential services. Increasingly, large real estate companies diversify “vertically,” by providing centralized management or janitorial services to residential units through affiliate subsidiary companies.

Gendered equity

Once again, I’m standing in the wrong line at the checkout in a branch of the Rossmann drugstore chain. As my gaze aimlessly wanders, it catches sight of the magazine shelf. Next to My Style, Brigitte, and Meine Familie und Ich, something new peeks out: Finanzielle: von emotion.10 On the cover, a bleached-blond model promises investment tips. Yes! I grab this new exotic hybrid of a women’s financial magazine, pay for my remaining, mostly unnecessary and plastic-waste-producing drugstore items, and hurry home for my investment studies. At first glance, it becomes clear that most articles aim to introduce the interested potential investress to so-called ETFs (exchange traded funds) and other investment instruments. These are primarily for people with relatively low stakes and an even lower affinity to risk. So, nothing for speculatresses. Right?

Saving 2.0 is presumably the motto. Smarter—and more fashionable—saving. Not like Grandma with her old stockings or Mom with the zero-interest savings account, where foul inflation slowly but steadily eats away the hard-earned savings. At the same time, it’s not about a “real” retirement pension, such as buying real estate or the so-called Riester11 pension, but more about small savings, starting at 50 or 100 € per month. This form of saving can easily be scaled up once a certain level of financial literacy is reached. When they have us hooked “because money is fun.” When our fingers start tingling as soon as we read about impact investment, Ethereum, NFTs, and guaranteed dividends.

Finanzielle introduces the next sphere of this world of opportunity: successful women who made a career in or through the financial sector. Motto: Invest in yourself—the universal paradigm for the construction of subjects in neo­liberalism.

Make sense, be profitable!

But also, on the surfaces of urban space, on walls, displays, and billboards, we are constantly being seduced. Increasingly, fin-tech services use public façades and billboards in subway stations to suggest to us: this is a huge consumer thing! As big as lace underwear or astral bodies in sportswear. This is so great that it even suits the grimy façade behind Berlin’s S-Train ring.

Digital asset managers or financial service providers, such as Scalable, so-called robo-advisors, or neo brokers, are platforms for trading and managing assets of cryptocurrencies, derivatives, funds, ETFs, and stocks. Even at Berlin’s subway station Kottbusser Tor, “ethical investing” is prominently advertised. It’s not (just) whether you look like the bleached-blond model; it’s about how you manage your portfolio. The financial economy can even tap into your meager, precarious spare cash. You make it available to the financial market for someone else to borrow, in order to mine rare metals, build e-cars, and fight wars.

We could also consider these new accessible opportunities for capital investment as a form of democratization. The return of the financial capitalist as a departure from and upward mobility of low-paid wage labor. Accordingly, we would all be invited to participate in rentier capitalism. However, this invitation is, at the very least, double-edged. Sociologist Michel Feher argues that wherever there are investments, there are always “investees.”12 In other words, those in whom investments are made. And they are not free to make their own decisions.

For example, I become an investee at the moment I sign a student loan agreement with a specialized financial company because I have no other means of enrolling in a university. The amount of my loan reimbursement is inextricably coupled with my future income. Those who invest in these funds do so with a speculative vision and a belief in the high-income careers of their student borrowers. Hard to imagine what the prospects for securing funding are for, say, a degree in art or philosophy.

In Germany, private creditworthiness—a substantial aspect of my economic identity—is certified by the credit rating institution Schufa, which, for example, is an essential requirement for renting an apartment. Schufa is not even a government agency but a joint-stock company whose shares are predominantly held by commercial and savings banks. Schufa, therefore, is a kind of rating agency on whose judgment we are continually dependent in our everyday activities. And anyone with a poor rating, i.e. no creditworthiness, is doomed. This is true for citizens and cities as well as states in crisis.

Financialization and the associated debt economy are governing instruments that enforce behavior and create dependencies that conform with economic and social systems. Both are based on the fragmentation and abstraction of property and ownership titles, breaching into widening spheres of the corporeal and the social. Financial capitalism is a system of domination that further divides our bodies by appropriating spaces of the social.

(Ir)responsibilization

A frequently conjured example of that which is considered responsibilization13 is the financialized retirement pension.14 My (hypothetical) financial advisor recommends that I invest in a private pension plan; thus, I endow a financial company of my choice with my modest funds for investing in the financial market. Effectively I become—(hypothetically) brokered through my pension plan—an investor. I take personal responsibility. And I am not alone: in the face of deteriorating state pension systems, this is happening to millions worldwide. Through constant injections of savings assets, these institutional providers, pension funds, and insurance companies have mushroomed to such proportions that there is talk of a “wall of money.”15 This fictitious monetary tsunami is also a product of suggestive power in neoliberalism: take responsibility for your own social security and retirement provision instead of relying on the shrinking welfare state, which will steer you into old-age poverty. Invest in yourself. And if you’re too fat or sick, you’ve missed out or done something wrong and will have to pay extra for medical expenses. Under this irresponsible doctrine, which goes hand in hand with dismantling collectively organized social welfare, it is no longer the community, but solely the individual that takes responsibility for his or her social security.

It’s complicated

Powered by algorithms and flanked by seemingly out-of-control laws or their loopholes, financialization is too powerful, diverse, fluid, and for us, lacking transparency, to be left abstract. For Manuel Aalbers, financialization is a “vague and chaotic concept,”16 a multilayered transformation of the economy and of consumption, difficult to summarize. Louis Moreno talks about the siphoning off of value created by human capital. At the same time, the increasingly flexible labor required to do so perpetually spawns new urban infrastructures such as co-working spaces or urban labs.

The financialization of everyday life and the commodification of subjects are made possible by the proliferation of seductive digital portals. These offer new infrastructures for shaping personal lifestyles, self-images, and investment biographies. Beyond mere consumerism and with our manifold actions and needs, we ourselves are steadily co-opted to become co-producers of financialization.

Indeed, it is presumptuous to assume “we” as a homogeneous form of subjectivation—there never was and never will be. Also, standing between you and me and financialized subsumption, there are still a few important things like community, resistance, and collectivity. Is that not so?

They are everywhere

The financial sphere and its accomplices not only determine the production of the city but also shape the production of the self and its future.

Sociologist and dancer Randy Martin describes how financialization became a significant and troubling factor in political and cultural life from a US perspective;17 Wendy Brown analyzes the soft power of post-neoliberal governmentality, its discourses, narratives, and self-images, as it gives value to human capital.18 Thus, in pursuing agency and responsibility in a financialized world, we should reactivate an expanded understanding of our urban bodies in their flesh and living form. According to Ross Exo Adams, this animates a future world brimming with love, intimacy, agency, and consequence, through which we may aspire to a new, somatic horizon of our coming political resistance. However, even for Ross Exo Adams this remains a mere glimmer. Referencing Ildefons Cerdà, the nineteenth-century Catalan urban planner, he considers urbanización and the associated platform urbanism as a perpetual grip on the body. It is an “expansive site of extraction” and “a vessel that directly transforms its physical, psychological, biological, and ecological relations to space and time into capital.”19 Thus, in 2017 Ross Exo Adams had already spoken out against a resilient urbanism in which “the blurring of bodies, natures, and infrastructures reveals a power-in-space built not on standards, norms, or the rule of law, but as a means to engage crisis as its ‘reality.’”20 It is a crisis that feeds on the flexible, growing, and constantly reinventing social matrix of the urban. The financialization of the city, in the form of fictitious capital, appropriates the potential of this social growth and shapes it in the image of itself. Hardly optimistic, Ross Exo Adams concludes: “This [urban] body, made visible in its eco-cybernetic urbanization, is no longer a site of infrastructural control, but infrastructure itself—a shift which profoundly inscribes crisis into the experience of everyday life. In this space, the modern urgency to accelerate toward a universal, predestined future gives way to a static anxiety of an endless and totalizing present in which ‘stewardship’ substitutes for political agency.”21

In despair

Financialization is the new absurd formula of capital, a spirit summoned by industrial capitalism and its political apparatus to battle sales crisis and resource depletion. It is the attempt of a system, inherently designed for growth, to transform and repair itself, to bring ever new material and immaterial goods of exchange to the market. It is the new growth phase of a service and extraction economy embarking on a mission: toward the new frontier of our cognitive, social, and global resources and their social manifestation in urban space.

Financialization seems to be a freewheeling, restless, increasingly dehumanized machine. A system in which everyone competes with each other, maximizing oneself while setting back the other. An endless struggle, profoundly antisocial and destructive, in which at some point, we are forced to siphon off the last remaining scraps from others, spiraling downward in pursuit of our own survival.

With X Properties we engage with the effects of financialization on living and housing, and the urban transformations of daily life. We search for approaches to examine these changes in terms of their causes and for opportunities of self-determined social and economic alternatives.

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