Housing financialization as a self-sustaining process. Political obstacles to the de-financialization of the Dutch housing market

Abstract

The 2007–2009 financial crisis exposed the risks of housing financialization. Yet the political dynamics shaping post-crisis efforts to de-financialize housing have received surprisingly little analysis. The financialization literature posits that de-financialization policies have been hampered by a policy consensus on the desirability of the pre-crisis status quo. I examine this claim through a detailed analysis of Dutch macroprudential policy reforms, which aimed to mitigate housing-related systemic risks. It finds a fragmented rather than coherent policy community, with the central bank and financial conduct authority pushing for ambitious policies. While they influenced reforms during the housing bust (2008–2013), the government ensured that these financial supervisors would remain peripheral to the future determination of these policies. As the subsequent housing market recovery reduced the urgency to reform, supervisors were unable to impose further de-financialization policies. Housing financialization thus appears self-sustaining, by making mortgage-related policies politically too important for the government to consider a significant empowerment of the actors that might challenge it.

Keywords:

• Housing policy
• de-financialization
• post-crisis reforms
• macroprudential policy
• financial stability

Acknowledgements

I would like to thank Matthias Thiemann (Sciences Po Centre d’études européennes) for inviting me to join his research project on post-crisis macroprudential reforms, which allowed me to do the empirical research for this article. I am really grateful to Gertjan Wijburg for his comments and suggestions on an earlier draft. I also want to thank all my respondents for their willingness to help me with this research. Finally, I would like to thank the editors and five reviewers for their suggestions during the review process.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 All quotes from the interviews and from Dutch sources are the author’s translation.

Additional information

Notes on contributors

Bart Stellinga

Bart Stellinga is a senior research fellow at the WRR. He is also a lecturer at the Institute for Interdisciplinary Studies of the University of Amsterdam (UvA). He studied political science (MSc) and philosophy (MA) at the UvA. He obtained his doctorate at the UvA in 2018 for his thesis ‘The financial valuation crisis’, addressing the politics of post-crisis financial reform in the European Union. He has published in leading political science journals, including Journal of Common Market Studies, Review of International Political Economy, Regulation & Governance, and Business & Politics. At the WRR, dr. Stellinga has contributed to publications on the privatization of public sector activities, food policy, financial supervision, and monetary policy.