Global/local geographies of risk and return: examining South Africa’s housing finance regime in a context of subordinated financialisation

Keywords: Subordinated financialisation, South Africa, housing finance, apparatus
Session Type: Virtual Paper Abstract
Day: Tuesday
Session Start / End Time: 3/1/2022 08:00 AM (Eastern Time (US & Canada)) - 3/1/2022 09:20 AM (Eastern Time (US & Canada))
Room: Virtual 50

Abstract

Akin to many countries, housing loans increased significantly in South Africa in the period leading up to the 2008/09 GFC. Yet, this lending boom did not trigger a subprime crisis, as housing finance in South Africa is characteristically conservative. Geared toward minimising risk/maximising profit, banks often engage in practices like redlining to assess the creditworthiness of bond applicants. As such, they tend to reiterate historical modalities of space-based and race-based exclusion. Indeed, housing financialisation in South Africa operates by ‘staying away’ from poor households and stigmatised neighbourhoods (Migozzi, 2020). This paper seeks to interrogate the security and financial apparatuses (Foucault, 1980) South Africa’s housing finance regime. An apparatus is made up of heterogeneous elements – discourses, institutions, laws, scientific statements – arranged in such a way to enhance the functioning of a system. In global finance, this apparatus works to secure the optimal circulation of capital. Yet, risk is by no means a neutral concept: it is informed by political conceptions of danger that tend to favour certain populations and territories. This paper interrogates how this apparatus mediates South Africa’s subordinated position in the international monetary hierarchy and the implications this entails for housing finance. It aims to ‘re-politicise’ the racial and geographical assumptions of risk and creditworthiness that constitute the infrastructures through which financialisation unfolds globally and locally. The concept of financialisation, therefore, enables us to illuminate how global financial markets unfold 'on the ground', and the various ways it can be challenged to democratise housing finance.