Effects of the Financialization of Housing Discourse: Evidence from the San Francisco Bay Area

Building on recent findings establishing the differential rise of finance culture in American households based on household socioeconomic status, this paper examines finance culture in everyday understandings of the residential built environment. Using qualitative data from 31 in-depth interviews of residents of the San Francisco Bay Area, this paper inductively finds that two logics dominate non-professional accounts of what forces construct the city: 1.) economic, or 2.) incidental. These two logics have different political and distributional implications. When the economic logic is dominant housing is treated as a commodity and an asset, while when the incidental logic is dominant housing is treated as a right. 

Rapidly rising rents and property values in the Bay Area reveal the social impact of the spread of finance culture to housing. Firstly, the intensity and vitriol of the debate surrounding gentrification can be accounted for on the basis of the cultural mismatch between individuals who see housing as a commodity versus those who see it as a right. Individuals generally require conditions of housing duress, such as what is currently experienced in the Bay Area, to articulate the political implications of their implicit understandings of the built environment. As the housing situation persists and communications between these two cultural camps continue to fail, the divide grows between those assimilated to neoliberal finance culture, and those left behind.

Secondly, because shelter is a human necessity, the inability for greater numbers of Bay Area residents to afford local housing prices represents a new level of individual subjugation to neoliberal subjecthood. To be able to afford to live decently in the Bay Area requires more and more strict adherence to the demands of neoliberal discipline and behavior. Only individuals who can compete on a global scale, either directly through international firms or indirectly through globally agglomerated industries such as the technology sector, can now sustainably live in the Bay Area. To survive in the neoliberal era increasingly means one must be a good neoliberal subject.

Thirdly, conceptualizing housing as an economic object invites moral judgement on those who can afford less. This therefore represents a double domination of those at the lower end of the income distribution: both economic and moral. Individuals are simultaneously priced out of the localities within which they sustain themselves, and condemned for failing to “deserve” the right to live in a certain place despite recognized structural inequalities. This moral condemnation is also another way individuals are punished for nonconformity to neoliberal subjectivity.

Finally, the spread of finance culture to housing promotes speculative behavior on the part of property buyers, thereby linking community and individual residential stability to market volatility. As the Great Recession has shown, micro-acts of speculation in aggregate can lead to the decline of national economies. This lesson is just as applicable to local markets and regional economies. Together, these findings demonstrate the both normatively and materially negative effects of the rise of finance culture in the United States, and its spread to everyday understandings of the built environment.