The Global Urban Festival celebrates the urbanisation of capital.

Last spring the stars of a Finnish film, Fallen Leaves, took to the stage at the Cannes Film Festival to receive the Prix du Jury award on behalf of the world-renowned but elusive director, Aki Kaurismäki. This spring another Finnish star will grace audiences at the French Riviera. The Nordic country’s former social-democrat prime minister, now Strategic Advisor at the Tony Blair Institute, Ms. Sanna Marin, is to deliver the keynote speech at Mipim, one of the world’s largest real estate fairs starting on March 12^th.

Organised annually since 1990, Mipim, short for Marché international des professionnels de l’immobilier, is a place for developers, brokers and service providers to do business with institutional investors, private equity funds, real estate investment trusts and asset managers. The event also goes by the somewhat more universally appealing title The Global Urban Festival. But if Mipim is a festival, then what is the reason for festivities? And how is the headline performer planning to address her audience?

Capital goes to town

If anything, Mipim is a celebration of the growing importance of the built environment for the circulation of investment capital. At the end of the year 2022 the total value of the world’s property stood at $380 trillion. Of thatalmost $290 trillion was tied up in residential real estate. Residential real estate has been one of the highest performing asset classes in recent history. Altogether, global real estate is worth more than the global equity and bond markets combined and it is four times the size of the entire global GDP.

The development of cities is an undisputed key driver of the global economy, one arguably increasingly pivoting on rentierism or the ownership of assets and value extraction rather than production. Real estate fairs such as Mipim are where winnings from the rentier economy are further divided. Last year Mipim hosted over 6500 investors in all and 76 of the world’s top-ranking 100 real estate investors. The combined value of assets managed by the participating top 100 asset managers rose to nearly four trillion USD. What’s not to feel festive about?

Cities go to Mipim

With such a deep pool of money looking for profitable opportunities, it is no surprise that these days city representatives the world over also increasingly flock to Cannes to pitch their hometowns as the next big thing in investment. During recent years “local authorities have increasingly colonized this marketplace, where they exhibit land and real estate opportunities located in their jurisdiction”, writes Antoine Guironnet, researcher at the Parisian university Sciences Po.

Guironnet’s work explores Mipim as a key node in what he and many other scholars in recent years have called urban and housing “financialisation”, or the increasing role of houses and the built environment as financial assets. Guironnet explains how cities themselves are now present at Mipim, competing who is most willing to open their built environment for the circulation of global finance capital. The most desired hit product at the Mipim marketplace is the city itself.

But as cities compete for capital investments and try to market themselves, they also subject our common urban lives to commodification. This urban commodification also comes with a social price tag. Risking the festive hubris, perhaps in her keynote address Ms. Marin will consider highlighting the social price of urban commodification and financialisation. She might even raise some of the following issues.

The social price-tag

In recent years and particularly after the 2007-8 subprime crisis, critical researchers and activists have been very outspoken and rather unequivocal about the fact that the increasing tethering of our homes to global finance is at the root of the explosive rise in rents and house prices in urban areas. The push to render immobile, local property into liquid, global capital is often coupled with states rolling back regulatory measures and tenant protection to favour the wishes of the development industry.

These changes in turn are reflected for many households as social problems related to housing precarity. Housing precarity has to do with various issues such as displacement pressure, overcrowding, housing inadequacy, and poor facilities. All have serious implications for living standards, health, quality of accommodation and accessibility. The threat of being dispossessed of your home and forced to leave your community is cause of major uncertainty and precarity. Not to speak of the actual violence of displacement and evictions.

Perhaps Ms. Sanna Marin plans in her talk to recognise that housing is not merely an economic concern and commodity, but a complex resource that is linked to individuals’ sense of ontological security, right to stay put, personal relationships, communities and social reproduction. This would be a great opportunity to discuss the responsibilities of local authorities and the investment world in the way they engage with our urban commons.

Gentrification as urban strategy

The sales director at Mipim, Emmanuel de Tissot, calls the event a “one-stop-shop, where you have the entire value chain of the real estate from political decision makers, to the investors, the brokers, until the actual event [of development]”. Regarding promising value chains, in addition to new development, a recurring topic of interest at Mipim are the opportunities for regeneration of existing built environments.

Urban renewal is a major element of the real estate game in the post-industrial era and developers are keen for cities to open territories such as waterfront areas and working-class neighbourhoods as new frontiers of circulation, accumulation and value extraction. One global trend is for asset management companies to buy up apartments in disinvested working-class areas with this exact motif. The business model is simple. Buy housing, renovate it, refinance it, and then sell it or rent it at a substantial profit to please the investors.

Asset manager Blackstone for instance has been purchasing units in the old Swedish million programme estates where they believe higher land values could be extracted with minimal investments. The result is the pushing out of low-income tenants and their replacement by more affluent ones or what Swedish scholars have called renovictions.

Maybe Ms. Sanna Marin is going to use her time on the podium to remind the audience how the narrative of urban regeneration and renewal is often used to mask unrestrained gentrification as a global urban strategy. And how gentrification is a cause of displacement, disrupts communities and forces working-class households to move out of their neighbourhoods into less expensive locations thus exacerbating urban segregation.

A global festival for the few

Finally, here is an opening for Ms. Marin to also raise a question about participation, transparency and democracy related to urban development. This so called Global Urban Festival is only that in name. In reality, Mipim is a highly exclusive event of carefully selected urban development elites and authorities. It is a networking occasion for real estate professionals, international investment capital, decision makers and urban influencers.

Participation fees alone, starting at eight hundred euros and rising to well over three thousand euros, are prone to leave the average urbanite outside the doors of exhibition halls, luxury yachts, hotel rooms and restaurants, where decision makers and developers withdraw to rub shoulders and make deals with investors. But real estate fairs like Mipim have real world consequences and affect the lived realities of the residents of cities and urban commons everywhere.

The lack of opportunities for representation at the event is glaring. Will Ms. Marin use this occasion to raise the important question to the organisers of Mipim and the city authorities present, why such an essential aspect of the development of the built environment as its financing is discussed behind physical paywalls, excluding the very urban residents whose lives are being affected?

About the author: Mika Hyötyläinen is post-doctoral fellow at the Institute for Housing and Urban Research. His research focuses on land use and housing policies and urban inequality in the Nordic welfare state context. He was a visiting researcher at the School of Architecture, UFMG – Federal University of Minas Gerais (Belo Horizonte, Brazil) in 2023.