Environment and Planning A: Economy and Space

Mortgage innovations and New Deal agencies facilitated lower priced loans for prime borrowers and minimum price disparities across US regions. In the 1980s deregulation removed price restrictions on banks' mortgages and also removed geographic distance restrictions on lending, opening the subprime industry. Global and local Moran indices identified interregional price disparities based upon proportions of subprime mortgage originations. A cluster of high-priced mortgage originations was found along the Gulf States both before and after the subprime collapse of 2007. Local banks, perceived to have special underwriting knowledge about their markets, and who were more likely to offer preferred prices, were compared with nonlocal banks and independent mortgage companies on their spatial distributions of mortgage pricing. During the boom and bust years from 2005 to 2008, the regional patterns of proportions of subprime mortgages for each mortgage institution type were similar, adversely impacting borrowers in the Southern Gulf region. These spatial patterns suggest that nonlocal banks and independents made the same underwriting conclusions about borrowers in regional markets as the local bank specialists.

There is a strong case that mortgage-backed securities were at the root of the 2007–09 financial crisis. Even though geographers have convincingly demonstrated that loan origination is strongly locally rooted and that the fallout from the subprime mortgage crisis clearly had spatially circumscribed effects, securitization is still generally perceived as a universal, private, and purely market-based financial technique. In this paper we use a description of the securitization chain in the Netherlands to contest these perceptions. Building on and adding to Thomas Wainwright's analysis of securitization in the UK, we first argue that securitization in the Netherlands has taken a form which reflects Dutch corporatist institutional arrangements, implying that both geography and states do matter for the supposedly aspatial process of securitization. Second, we argue that the Dutch state has been very much implicated in the construction of the securitization market in the Netherlands. Third, we suggest that this can best be seen as an effect of ‘cognitive closure’ rather than of ‘regulatory capture’: that is, Dutch pro-banking regulation is not so much an effect of bankers hijacking regulators but, rather, more the result of bankers seducing regulators with their stories. This paper is a detailed case study of the workings of financialization and adds to the growing body of work which seeks to analyze the different ‘varieties of financialization’ and the variegated geographies of the financial crisis.

This paper engages recent arguments regarding the transformation of credit (default) risk within US mortgage markets. With the growing integration of mortgage lending into volatile circuits of finance, emergency interventions during financial crises have become productive moments for credit risk, securing the broader norms of risk taking by selecting out problematic loans—a distinctive orientation to risk that I characterize as the financial exception. I develop this argument by focusing on emergency interventions during two signal moments in the recent history of US mortgage markets—the late 1980s banking crisis and the post-2007 mortgage crisis. In both cases the regulatory practices of isolating system-threatening risk-segmented borrowers into distinct market spaces, deepening and extending particular forms of credit risk inherited from the New Deal financial system.

Over the past few decades, the institutional logics of the capitalist market and the bureaucratic state have been pushed into association at an increasing rate through processes we have come to know as ‘globalization’ and ‘financialization’. The power of financial markets threatens governments around the world, from the communist to the most conservative. In response, governments have sought ways of realizing their interests in a rapidly changing economic environment. Nothing illustrates this phenomenon more than the rise of sovereign wealth funds (SWFs); governments have been using these special-purpose vehicles to invest assets in private financial markets at an increasing rate, independent of their variety of capitalism. While SWFs are an implicit acceptance by the state of the power of finance, they are, however, also an attempt by the state to leverage finance and filter the transformative forces of global capitalism. Drawing on institutional theory and economic geography, I conceptualize the impetus behind the existence of SWFs, and conclude that SWFs exist to preserve local autonomy and state sovereignty by harnessing the power of finance.

Sovereign wealth funds (SWFs) have grown rapidly in recent years both in value and in number. Despite a great deal of popular debate, very little scholarly attention has centered on the ‘strategic use’ of SWFs by states, that is, as tools to promote national development. Using a ‘network mapping’ approach, I investigate two case studies involving extensive strategic SWF investment: Qatar, Abu Dhabi, and Dubai's use of SWFs to promote the development of their aerospace sectors; and the deployment of the China Investment Corporation as an instrument of Chinese raw materials and energy policy. Strategically oriented SWF investment can be seen as a state-adaptive strategy under contemporary conditions of globalization and financialization. The viability of such a strategy, however, hinges on the manner in which it feeds into the strategies of firms and states at the receiving end of investment.

A partial static competitive equilibrium theory is presented and the corresponding constrained logit model specified for a given scenario of policies, which yields the expected equilibrium locations, prices of schools, and students' school choices. Rational students differentiated by socioeconomic cluster demand vacancies at different schools after assessing the school quality, price, and transport costs. Students also interact among them by their valuation of who attends each school (a consumer externality). Schools and vacancies are supplied by different suppliers: private and private-subsidized providers choose school locations and type (quality, capacity, prices); public schools provide free education to fulfill demand under fixed total budgets. Producers face production economies. The Nash demand–supply equilibrium is studied with regard to the existence and uniqueness of the solution, which is solved by a fixed-point algorithm to find a unique solution. The model is applicable to assess different scenarios of regulations and subsidies, as is shown in a test example using data from Santiago, Chile.

Amongst the hypothesized beneficial impacts of sprawl on urban quality of life is a decrease in commuting times. Unfortunately, empirical evidence to substantiate the commuting time benefits of sprawl is scant. To address this void in the urban planning literature, a multilevel approach is adopted to study how sprawl affects the duration and length of private-vehicle commutes. Using microdata from the 2001 National Household Transportation Survey for individuals and microdata on various measures of sprawl for metropolitan areas, multilevel models of commuting times and distances are estimated for a subsample of private-vehicle commuters. Results somewhat support the hypothesis that sprawl decreases commuting times for private-vehicle commuters—employment decentralization is associated with shorter commuting times. However, this finding is based on the statistical significance of one of the sprawl measures; not on its practical significance in explaining commuting times which is, in fact, negligible. Coupling this with the finding that the multilevel model only explained about 5% of the variance in private-vehicle commuting times suggests that there is considerable room available for improving the model specification.

Many localities that are politically committed to tackling the causes and consequences of climate change have faced obstacles in getting results, even though they were successful in implementing other environmental policies in the past. What makes implementation of climate policy different from other local environmental policies, such as air pollution control? This paper makes a comparison between the implementation of two environmental policies in Mie Prefecture in Japan. The first was the successful reduction in local air pollution (1960s–70s). The second was the more recent policy with mixed results to control the emissions of greenhouse gases (1990s–2000s). The research found several factors that can explain the differences between the implementation effectiveness of the two policies, such as immediacy and political legitimacy, the autonomy and capacity of local governments, the capacity of organized civil society and the role played by technology. Local governments still have a strong role to play, and some institutions built in the past are still effective. However, climate change asks for different approaches to local policy implementation and new institutions need to be built to fill the implementation gap.

The paper explores the diversity of gentrification, which involves various types of agents and processes in driving Houston's urban renaissance. The research advances a technique that enables a broader analysis of gentrification, consistent with the approaches of Damaris Rose, Robert Beauregard, and Eric Clark to studying this process. A principal components analysis and a K-means cluster analysis revealed a grouping of fifty-four tracts in Houston, consisting of some 75 km² just within the 610 loop (Houston's urban core), experiencing similar levels of upgrading. A qualitative analysis was developed around three case-study neighborhoods, captured from this one cluster, identifying similar scales of gentrification, but showing the internal diversity of the process: the ‘chaos' and the ‘complexity’ of gentrification. The authors explore different mechanisms of redevelopment, used in different combinations throughout the city by different types of agents, in driving reinvestment and displacement throughout Houston's urban core and surrounding neighborhoods. The research suggests that no one income group in Houston is secure in maintaining its socio-economic neighborhood composition, including the rich.

This paper focuses on the mobility of Scottish Gypsy Travellers as a part of their way of life. It considers both the imaginative and corporeal travel of these people within northeast Scotland. The paper uses Heidegger's conceptual thinking to understand their being on the move. It emphasises the primacy of the process of movement before signification and coding and offers thinking through affectivity, emergence, and potentiality to recognise multiple ways through which travelling people sense place and movement. Through an investigation of the mobile living practices of Scottish Gypsy Travellers and their belonging-together, the paper argues for a relational logic which can attend to the complexity of their involvement with the world.

Empirical support for models of internal labour migration are usually based on observed patterns of net flows into local labour markets with relatively low unemployment and relatively high real wages. The inference drawn from such evidence is that internal migrants move to enhance returns to their labour. However, major surveys in the USA (Panel Study of Income Dynamics, and the Current Population Survey), the UK (British Household Panel Survey) and Australia (Household, Income and Labour Dynamics in Australia) all show that less than a third of internal migrants are motivated primarily by employment reasons. This paper explores this apparent disconnect between net flows and motives using the Survey of Dynamics of Motivation and Migration, which has recorded in detail the reasons why over 6000 individuals moved within New Zealand over the two-year period 2005 and 2006. The survey confirms that only a minority of working-age migrants move between local labour markets primarily for employment reasons. Far from increasing returns to their employment, most migrants do not experience a rise in income or believe their employment prospects improved as a result of their move. Rather than being motivated by having their employment enhanced by internal migration, the majority of internal migrants of working age appear to be motivated by other goals. Employment remains important, but in most cases only insofar as the new destination enables its continuity.

There is growing interest in the use of gridded population models which potentially offer advantages of stability through time and ease of integration with nonpopulation data sources. This paper assesses the accuracy of models of the type introduced by Martin in 1989. Population counts for census output areas (OAs) are reallocated to a 100 m grid and then compared with true 100 m cell population counts uniquely available from the 2001 Northern Ireland Census. This analysis is novel, being the first large-scale assessment of gridded population models against true gridded population counts. We find evidence that kernel width and cell size are more important than the distance-decay parameter; that local mass preservation approaches are more appropriate in urban areas; but that the spatial scale of input data is more important than model parameters. It is suggested that more attention needs to be given to the varying spatial structures of population between places and that incorporating this information through geostatistical approaches could yield further insights.

The development of transport networks requires public investments, in terms of government expenditure, on several types of (road, rail, port, airport, and urban public transport) infrastructure, including their operational and maintenance services. This paper develops and implements a system-wide spatioeconomic model to analyze the expenditure competition among different types of investment in the Greek transport sector. The suggested approach can offer valuable insight into the economies of scale and synergies associated with a particular transport investment. It is also extended to consider how such investment determinants as population concentration, economic growth, and political considerations at the prefecture level affect expenditure allocation to different types of transport infrastructure. The results indicate the statistical significance of scale effects of transport investment, substitution effects of road investment on other types of transport investment, and political factors on different types of transport investment. Airport investment relates to the most significant synergistic effects on expenditures in other types of public transport facilities. Thus, policy makers must take these fiscal externalities into account for the strategic planning and evaluation of infrastructure supply, and coordinate or subsidize public transport projects with significant positive externalities.