Forthcoming in Antipode 47(2) in early 2015, and available online now, Susanne Soederberg’s Subprime Housing Goes South: Constructing Securitized Mortgages for the Poor in Mexico offers a timely analysis of the rise of asset-backed mortgage securities in Mexico. Despite its significance to questions of development, there has been no critical analysis on the social implications and power dimensions of residential mortgage-backed securitization with regard to low-income housing in Mexico.
This essay fills this gap by demystifying the technical (‘apolitical’) nature of securitization and explaining how and why state-sponsored schemes subsidize financial and construction interests in the name of expanding home ownership for the poor. In so doing, the analysis employs a historical materialist approach that places residential mortgage-backed securitization within the contradictory nature of capital accumulation processes in Mexico and relations of class-based power therein, viewing it as an integral feature of housing policy that is inextricably linked to the credit system.
Susanne reveals three trends in the expansionary strategies undertaken by capitalists, neoliberal governments, and international development agencies under the rubric of housing justice for the poor:
[i] the promotion of asset-backed securitization as a viable tool for global development finance;
[ii] the imposition of marketized solutions to the endemic lack of adequate housing, particularly for the urban poor;
and [iii] the increasing, yet largely invisible, concentration of wealth and power of the construction sector, especially with regard to low-income housing.
All three trends are evident post-2015 Millennium Development Goals discourses, most notably the UN-Habitat’s Cities Prosperity Index and its Slum Upgrading Facility.
Within the wider struggles for housing justice, Susanne argues, these trajectories – including their interconnections – should be exposed to public scrutiny and radical democratization: “We need to detonate the flawed, yet powerful, assumptions underpinning the three trends, that is, that the lack of public funding has necessitated a greater reliance on the market. Scholars, social justice NGOs, and activists need to continue to demand viable alternatives based on collective and publicly-funded initiatives (e.g. public housing and co-operatives), not individualized and privatized forms of ownership based on forms of financial speculation.”
Susanne Soederberg is a Professor and Canada Research Chair in the Department of Political Studies at Queen’s University in Canada. As well as several single-authored books – including Debtfare States and the Poverty Industry (Routledge, 2014) and Corporate Power and Ownership in Contemporary Capitalism (Routledge, 2010) – Susanne has published in Antipode (on The US Debtfare State and the Credit Card Industry: Forging Spaces of Dispossession), Globalizations, the Socialist Register, and New Political Economy, among many other places. She has also been invited to discuss her research in venues as diverse as NATO’s Defense College in Rome, the European Network on Debt and Development (EURODAD) in Brussels, and the Institute for Global Dialogue in Pretoria.
Susanne is currently working on a five-year project (2014-2019) focused on housing rights for low-income families residing in some of the world’s largest slums and informal settlements in Mexico City, Manila and Mumbai; the project examines the on-going marketization of housing rights and its connection to wider questions of power and social reproduction, informality, climate change adaptation, and the juncture between public and private modes of governance.