A Typology of Neighborhood Ownership Financialization–Where, When and For Whom it Matters (2000-2020).

• In Event: Spatial Inequality

Abstract

Since the Great Recession, there has been growing interest in how ownership financialization—a shift from individual “mom-and-pop” owners to formalized, large-scale, or nationally-oriented owners—shapes inequality. While studies find that some types of ownership financialization benefit residents by revitalizing commercial districts, providing revenue, and upgrading distressed properties, others link financialized owners to displacement, disinvestment, and shrinking local entrepreneurship. The full implications for spatial inequality remain unclear in part because no national study across multiple ownership types exists. In this paper, I construct a novel database combining comprehensive parcel records with a national business directory to ask how the profile of property and business ownership in neighborhoods have changed in three time periods (2000, 2010, 2020). I developed a typology to characterize all urban, suburban, and rural neighborhoods according to the level of scale and formalization of its owners. I combined this with neighborhood demographics to examine correlates of neighborhood ownership type and to identify processes of stratification. Preliminary findings suggest a widespread drop in local independent businesses and rise in corporatized landlords from 2010 to 2020. Residential financialization growth exhibited a stark racial geography with the largest property investors consolidating in neighborhoods with the highest proportions of disadvantaged Black residents. While most ownership types remained stable, a novel neighborhood type emerged post-crisis, characterized by high financialization in housing ownership but sparse corporate investment in the commercial sphere. These neighborhoods were high-cost, high-inequality places with the largest populations of Hispanic and foreign-born residents. Residents in this new neighborhood type might experience distinct pressures, where they are subjected to the extractive processes of financialization through paying high rents but do not benefit from streams of revenue and reinvestment that can accompany commercialized investments. The findings of this paper contribute to the literatures on real estate financialization, neighborhood change, and racial capitalism.

Author

• Renee Louis, Stanford University