Are Today’s Frontiers Inside Cities? A Lecture by Saskia Sassen

By Doruntina Zeneli

On Tuesday April 30, Saskia Sassen joined the Initiative of Cities to speak about increased competition for housing, rising rent and how housing is deemed as a commodity for financial firms. Sassen first highlighted the capabilities society has today, “we have capabilities that are rather simple, but how can we make them less destructive?” She provided an example of the Aral Sea in Uzbekistan and how it has dried up over the years. She emphasized how we consist of negative capabilities and we must explore ways to be less destructive and use our intelligence to produce positives.

Moreover, Sassen switched her focus and uncovered the parallel story of modern housing and how it is being used as asset-backed securities for financial firms. She introduced data on the rising credit default risk in our markets and how it has nearly doubled each year from 2001 to 2007. In 2001, default risk totaled $919 billion and it has now amassed to $62 trillion in only a few years. “This is more than the global GDP of all the countries in the world” Sassen stated. The larger issue according to Sassen, was that housing was beginning to be seen as a material element in our modern world.

Sassen continued to explain that extractive sectors like high finance have begun to to extract value from modest households. The buying of property has allowed firms to use housing as a financial instrument. Currently, the top 100 cities are acquiring existing buildings and the value of these purchases totaled $600 billion in the US in 2015 and reached $1 trillion in 2016. Sassen highlighted that a large portion of British buildings we see today are actually owned by foreign entities. For example, Qatar officials own more of Central London than the Queen of England.

In addition, Sassen posed the question of “what are the urban formats of cities in the future?” Currently, poor people are being expelled from their land and there is a dramatic shift towards luxury towers. In many cities worldwide, modest homes are being acquired and people are forced to move into slums. Overall, Sassen underlined the importance of this issue and how it is a defining feature of cities today. She goes on to state that the past few years have been “extreme” and housing is no longer seen as a house, but as a commodity for global financial firms.

If you are interested in watching Sassen’s full lecture, please click here. To download her slides, please click here