Real Estate Funds and the Privatization of Public Property
In 2004, the municipality of Berlin sold its largest housing association, GSW, which comprised 66,000 apartments, for €2.1 billion to a consortium from the U.S. mutual fund Cerberus and Whitehall, an investment company belonging to U.S. investment bank Goldman Sachs. During the same year, Germany’s Federal Insurance Institute for Salaried Employees (BfA) sold its Gagfah housing association, with 81,000 apartments, to U.S. investment company Fortress for a sum of €3.5 billion. In 2006, the city of Dresden became the first German municipal authority to sell their entire municipal housing stock, likewise to Fortress. In all, more than half a million apartments once having belonged to community or municipal housing companies have been sold in the Federal Republic since 2000, the majority to international real estate funds.
These instances of municipal property being sold to private, profit-oriented investors cannot be explained only on a local level, as an attempt on the part of the municipal authorities to obtain quick debt relief for their budgets through the sale of public utilities companies and municipal housing. They belong to a globally changing economic structure, to a new finance-dominated configuration of capitalism that is characterized by a striving for new utilization possibilities through an exceptional international expansion of a redeployment of investment capital. Yet this “internationalization of capital” would not have been possible without the massive liberalization and deregulation policies having emerged since the nineteen-eighties, primarily in Anglo-Saxon regions to begin with, for example regarding the privatization of public services, education, but also natural resources. For this capital yielded from privatization through capitalization, new investment opportunities are now regularly being sought worldwide. David Harvey describes this process as part of a political-economic strategy for developing new fields of accumulation in those areas that had previously beenconsidered inaccessible vis-àvis profitability calculations. (1) The privatization of all kinds of public services (water, telecommunications, transportation), social welfare (social housing, health care, pension system), public facilities (universities, research labs, prisons), even of warfare and their related commodification and transfer to company ownership is central to the neoliberal project. This is the context in which the sale of once publically owned housing must also be viewed, considering that especially the real estate market presents an opportunity for funds to invest large amounts of capital and to draw equally high profits.
(1) For an introduction, see David Harvey, Räume der Neoliberalisierung: Zur Theorie der ungleichen Entwicklung (Stuttgart, 2005).
Oliver Clemens and Sabine Horlitz
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