Which actors build housing markets? A recent book looks at the transformations of Parisian real estate at the end of the XIXe century, showing how the craze for stone has changed the relationship with the city.
In this book, Alexia Yates traces the commodification of housing between 1870 and 1914 in the Parisian context. More than a new look at the urbanization of the capital or the construction cycles, the book sheds light on the real estate market as a social construction carried by a broad configuration of actors: public authorities, banks, builders, owners and real estate agents. Treating housing as a commodity is not self-evident: Christian Topalov even called it an “impossible commodity”. At the crossroads of economic history and urban history, Selling Paris is also of interest to the sociology of markets, which has so far paid little attention to the case of housing.
The real estate boom in fin-de-siècle Paris
The real estate market had experienced several phases of growth before 1870, for example with the sale of national assets during the Revolution or, of course, under Haussmann, prefect of Paris from 1853 to 1870. The expansion under the Third Republic was of an even greater magnitude. More buildings were built during the boom of the 1880s than during the prosperous years of Haussmannization. There were many ruptures: construction responded less to a general design than under the Second Empire, real estate companies changed in nature (most often, a company was founded for a given operation), construction sites took place in new districts and were more dispersed. Republican officials judged the public spending of the previous regime severely, while being aware that real estate was a driver of urban and economic growth. Not only did the construction sector create many jobs, but it was also seen as the barometer of the city’s prosperity.
The private players in this real estate expansion are less well known than those who, like the Pereire brothers, embodied Haussmannization. Paul Fouquiau, one of the main speculators of this period, has not gone down in history. An architect and entrepreneur, he founded no fewer than 12 companies during the boom of the 1880s, notably in Montmartre, and embodies this category of speculators, players in urban development who can be seen as the precursors of the real estate developers of the second half of the 1800s. XXe century. Real estate companies develop a speculative relationship with real estate, which becomes an investment product in competition with securities. They also contribute to a relative concentration of ownership, even if the majority of buildings belong to rentiers. These call on intermediaries for rental management, who become essential cogs in the market.
In this context, the public authorities intend to rely on private initiative for development. However, the owners fail to embody the general interest and urban modernity, while the city’s experts (urban planners, public works engineers, etc.) are gaining in power. The limited success of the owners’ associations provided for by the 1888 law reveals the contradiction between the reduction of real estate to its investment status, a condition for real estate expansion on the one hand, and the constraints represented by engagement in local development on the other. In the same way that Hélène Michel has shown the relatively weak political influence of real estate owners in relation to their social and economic weight, Alexia Yates thus underlines the limits of their role in the creation of the urban, beyond residential buildings.
The social construction of the market
The springs and brakes of this expansion are well documented and exposed in convincing developments that mobilize both an abundant historiography and diversified sources. They form the backdrop of the analysis of the social construction of the market, which constitutes the main originality of the work.
The activity of real estate speculators requires objectifying market trends through the dissemination of price indicators, the multiplication of press titles devoted to real estate announcements and news, the publication of evaluation manuals or maps giving average values of the price per square meter. This confirms the vision of an impersonal market whose mechanisms are naturalized, a vision that remains widely shared today, while contributing to the representation of housing as a commodity in its own right, and of the real estate market as a place of permanent exchanges, like the stock market.
At the same time, these market instruments also construct the specificity of real estate in relation to securities by making location the primary criterion for evaluation, and sometimes also by defending the idea of an “intrinsic value” of buildings that persists beyond cyclical fluctuations. As a result, builders admit restrictions to their ability to transform urban space and recognize that they must respond to a pre-existing and localized “demand” for their enterprise to be successful. The discourses conveyed in professional construction circles are therefore not very far from the analyses of the sociologist Maurice Halbwachs for whom collective trends are realized through the actions of speculators:
The evocation of the “neighborhood needs” testified to a vision of urban space as a historical and material force that imposes itself on actors and cannot be directed by speculative maneuvers. (…) The city cannot be reduced to the market and speculators are fallible. (…) Halbwachs would have easily recognized this desire of speculators to fit into the natural trends of urban development rather than trying to guide them. (p.96)
The development of a market culture goes beyond calculation and measurement instruments. Real estate market intermediaries contribute greatly to this. They are experiencing very strong development at the end of the XIXe century, particularly in response to the changes in the ownership structure mentioned above, which encouraged owners to delegate the search for tenants to professionals. However, historians had until then neglected these intermediaries. The sector is highly competitive, particularly due to the opposition between real estate agents and business agents (with more generalist activities), and encounters the hostility of established players such as notaries. Professional organizations only really became structured in the XXe century, after the First World War. This situation fueled aggressive commercial practices and led to a strong expansion of real estate advertising. The intermediaries gave their agencies the form of department stores, showcasing the abundance of supply and the continuous flow of opportunities to be seized on the market.
The very content of the classified ads, whose author shows great interest in urban history, induces a certain relationship to the market, to housing, and even to the city. There are few references to home and privacy, unlike what has been observed in other countries. On the contrary, the tendency to include apartment plans is seen as a way of showing what is hidden behind the facade of buildings. It is an invitation to a new type of exploration of the city that inaugurates the fashion for real estate tourism and apartment hunting. This new practice of the city extends in many ways the urban experiences of modernity described by Walter Benjamin, and many others after him, through figures such as the flâneur. Such experiences also refer to an entry of consumption into the domestic sphere.
Unbridled competition between real estate agents, each claiming to outperform the others, dragged the world of real estate assets into the consumer culture of the end of the 19th century. XIXe century. (p. 173)
However, these developments were not carried through to completion and did not lead to the creation of a central place for all current offers on the market, and even less of an exchange allowing a listing of rents and prices, such that the generalization of real estate advertising was far from being confused with the transparency of the market conceived by neoclassical economic theory. The obstacles to the extension of the commercial sphere find their reason in a certain ambivalence in the relationship to property, illustrated by the separation between real estate property law and commercial law in the Napoleonic codes.
The Napoleonic code enshrined the association between landed property, notability, and social order. Its treatment of real estate was tinged with an anti-commercial ethos that did not aim to facilitate the expansion of credit and debt. (p. 125)
In a stimulating epilogue, Alexia Yates reminds us that this process of commodification of housing is neither spontaneous nor inevitable. She extends her analyses in an original way to the interwar period. Public intervention in the market disrupts the frameworks put in place by real estate professionals during the Belle Epoque, but also responds to their inadequacies. Rent control, which limits the dispersion of prices, measures against “illicit speculation” (1919 law), and efforts (unsuccessful) to gather vacant housing offers on the municipal territory can be seen as moving in the direction of a greater centralization of the market. Beyond this expansion in the 1920s, Selling Paris thus opens up avenues of research on public action as an actor in the construction of the market, and not only as a corrector of its excesses.
It is regrettable that the book does not provide sufficient detail on the wealth strategies of the players (rentiers and real estate companies) and the logic that governs their investment and management choices. But its interest lies both upstream of this question, in the study of the methods of transforming housing into an investment product, and, downstream, in the analysis of the articulation between the commodification of housing and the relationship of city dwellers to urban modernity.