Paper presented at the Panel Real estate finance and society, Conference Intersections of finance and society, the panel on Real estate finance and society, 14-15 September 2023, Vrije Universiteit Brussel
Real estate development in Romania evolved as a site of capital accumulation in the context of the country’s integration as an emergent market into the already financialized global economy. The state, fostered by transnational actors, played a crucial role in this process through facilitating the two major transformations that put Romania on the path to capitalism: economic restructuring via deindustrialization and the reconstruction of the financial system. Privatization triggered both, as the promotion of the private sector in productive economy, housing, and banking were essential for changing the state-socialist political economy. In addition, dependent development defined their evolution while Romania opened to the transnational flux of investments, playing a role in the spatial fix of capital from global capitalism’s core countries. Nonetheless, the place-based economic formations underlay by vernacular political arrangements, have produced various instances of how deindustrialization and financialization have jointly shaped the forms and trends of local real estate development.
This paper contributes to an urban political economy of real estate and finance by linking the analysis of the increasing role of financial actors in real estate development (Aalbers, Fernandez & Wijburg, 2020) with an examination of how deindustrialization influences these processes. We investigate these connections at specific geographical locations, which embody instances of unequal development in semiperipheral Romania; thus, our proposal is to complete the focus on the temporality of financialization (Christophers & Fine, 2020) with the perspective addressing its spatiality. Our comparative lens highlights the variegated local formations of global processes that are also dependent on distinct land ownership patterns. It brings together the case of a second-tier regional city (Cluj-Napoca) with a robust service and IT sector, which exhibits characteristics of advanced financialization appealing to foreign real estate capital; and a third-tier town (Târgu Jiu) illustrating a case of delayed deindustrialization, in which the coal-mining industry continues to play a significant economic role and domestic real estate businesses are provided with investment opportunities. The paper is based on the findings of the REDURB research project entitled “Class formation and re-urbanization through real estate development at an Eastern periphery of global capitalism” conducted with the support of the Romanian UEFISCDI program.References: Chapters 2 and 17 of The Routledge International Handbook of Financialization, edited by P. Mader, D. Mertens, and N. van der Zwan, 2020