An article by Olsson, a recipient of the Best Article Prize in 2018 from the International Journal of Urban and Regional Research (IJURR), presents a case of financialization of urban governance from Helsingborg, Sweden. In a context of urban fiscal policy, the term financilization refers to a greater level of involvement of financial sector capital in urban service provision–from debt instruments for public infrastructure and development projects, financial intermediation and contracts, or provision of public goods such as housing, education, or drinking water through capital infusions from the financial sector. (For additional details, see articles on urban governance financialization from Torrance (2008), Weber (2010), and Ward (2017).) While access to capital finance by local governments in the US is relatively well developed (and studied–see a detailed summary in PBF by Hildreth and Zorn (2005) about municipal financing in the US), Olsson argues that a practice of converting public lands to development projects steered by”private” firms at the local government level in Sweden runs against established approaches to “state-led housing production, which had both a productive and a redistributive purpose .“
Olsson writes that:
“…this article demonstrates how the redistributive aspect of the municipal land instrument has been dissolved under neoliberalization, and discusses why the use of this instrument is problematic from both a democratic and ethical point of view. Based on a case study in Helsingborg, the article argues that, in using public land to leverage private investment in urban development, local decision makers adopt an interest in supporting rent extraction from tenants and housing owners, while subsidizing investment costs for developers. The dual role that municipalities assume as landowner-developers and planning authorities enable them to facilitate urban development effectively, but it is also problematic because it transgresses the public– private law divide inherent to Swedish law. Assuming this dual role, municipalities place themselves in a biased position that risks undermining the legitimacy of governmental actions in general, and the planning system in particular.”
Judging by the findings in several articles published in 2017 as part of a Symposium on financialization of housing, Sweden is not the only country in Europe moving in this direction.