Financialization and the third sector: Innovation in social housing bond markets

The recent global financial crisis has seen investors turn away from real-estate bonds, given their role in distributing risk during the crisis. However, since 2009, a new type of real-estate bond market has grown in London, enabling social housing groups to issue bonds. This could be viewed as further evidence of the extension of financialization practices into new spaces, beyond those of traditional capital markets and associated intermediaries. In this paper, we examine how financialization has begun to permeate the third sector, reordering the priority of housing associations' values, displacing social value creation with the economic. We highlight how reduced state funding has led social housing providers to become more reliant on capital market intermediaries, and explore how locally orientated social housing associations have become embedded within wider financial networks. While policy makers have viewed financial markets as a panacea to fund social housing developments in an age of austerity, tensions have emerged, requiring localized social housing organizations to become more commercial in their activities, jeopardizing their ability to protect vulnerable communities through social value creation.