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The political economy of mortgage securitization and the neoliberalization of housing policy in Canada

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  • Alan Walks
  • Brian Clifford

Abstract

The Canadian case represents a distinct variety of financialization under capitalism, one conditioned by the structure of its mortgage markets and the dominant role played by the state in the process of mortgage securitization. Securitization has been a key component of the neoliberalization of housing policy, with new state roles in the insuring, directing and funding of residential mortgage-backed securities both undergirding and justifying the federal shift from the provision of social rental housing toward supporting a rental market increasingly characterized by private sector individualunit landlord-investors. It was primarily the state's control over, and utilization of, the securitization process that maintained the solvency of the financial system in the face of the global financial crisis. However the resulting rapid uptake of liabilities on behalf of both the state and households brought forth new contradictions, necessitating new policy experimentation and reregulation, to which securitization was once again directed and which now articulate the political economy of housing in the country.

Suggested Citation

  • Alan Walks & Brian Clifford, 2015. "The political economy of mortgage securitization and the neoliberalization of housing policy in Canada," Environment and Planning A, , vol. 47(8), pages 1624-1642, August.
    • Handle: RePEc:sae:envira:v:47:y:2015:i:8:p:1624-1642
    DOI: 10.1068/a130226p
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    References listed on IDEAS

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    1. Peck, Jamie, 2012. "Constructions of Neoliberal Reason," OUP Catalogue, Oxford University Press, number 9780199662081.
    2. Alan Walks, 2014. "Canada's Housing Bubble Story: Mortgage Securitization, the State, and the Global Financial Crisis," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 38(1), pages 256-284, January.
    3. Lawrence B. Smith, 1981. "Canadian Housing Policy in the Seventies," Land Economics, University of Wisconsin Press, vol. 57(3), pages 338-352.
    4. Schembri, Lawrence L., 2014. "Housing Finance in Canada: Looking Back to Move Forward," National Institute Economic Review, National Institute of Economic and Social Research, vol. 230, pages 45-57, November.
    5. Engelen, Ewald & Erturk, Ismail & Froud, Julie & Johal, Sukhdev & Leaver, Adam & Moran, Mick & Nilsson, Adriana & Williams, Karel, 2011. "After the Great Complacence: Financial Crisis and the Politics of Reform," OUP Catalogue, Oxford University Press, number 9780199589081.
    6. Rocco Huang & Mr. Lev Ratnovski, 2009. "Why Are Canadian Banks More Resilient?," IMF Working Papers 2009/152, International Monetary Fund.
    7. Engel, Kathleen C. & McCoy, Patricia A., 2011. "The Subprime Virus: Reckless Credit, Regulatory Failure, and Next Steps," OUP Catalogue, Oxford University Press, number 9780195388824.
    8. Lawrence L. Schembri, 2014. "Housing Finance in Canada: Looking Back to Move Forward," National Institute Economic Review, National Institute of Economic and Social Research, vol. 230(1), pages 45-57, November.
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    Cited by:

    1. Pablo Mendez & Noah Quastel, 2015. "Subterranean Commodification: Informal Housing and the Legalization of Basement Suites in Vancouver from 1928 to 2009," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 39(6), pages 1155-1171, November.

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