Urban financialisation and grounded mutations: Income strip financing and local government-intermediated hotel development

The contemporary co-occurrence of burgeoning financial capital and public sector funding constraints draws into consideration the interaction between financial institutions and local authorities. Financialisation-in-motion seeks to capture the dynamics involved. Within this conceptualisation, advocacy narratives designed to support new financial instruments materialise, whether rolled out during direct communication or manifesting in more indirect and diffuse ways. One outstanding uncertainty is the potential for financial instruments to mutate as they shift from a generalised advocacy-based form to a project-specific grounded form. By implication, advocated benefits, costs and risks may evolve during financialisation-in-motion. This paper investigates income strip financing and the promotion of ‘win-win’ solutions where financial institutions access long-term, contractually secure, indexed income streams and local authorities benefit from profit rent and long-term property ownership. To consider how generalised benefits translate to ground level realities, attention focuses on three income strip hotel developments in London. All three were promoted by third parties, incorporated local government as intermediary actors and involved out-of-area investments. The examples evidence how financialisation dynamics can manifest in instrument mutation and variability, plus the transfer of additional risks and potential costs to local government.