From the State to the Shareholder: Rent and the Production of Shareholder Value in Real Estate

Following the 2008 global financial crisis, the use of real estate tax credits to generate shareholder value for investors increased significantly. While tax credits are lauded as crucial to the delivery of social goods like affordable housing, the multiplier effects they supposedly generate fail to account for the hollowing out of the state that occurs as public funds are transferred to shareholders. Through a detailed case study of the historic tax credit industry in the United States, this research shows how many of the banks and financial institutions investing in tax credits have come to rely on overly engineered forms of landownership, deeply discounted credit pricing, and a wave of stock buybacks to boost their corporate profitability. This paper therefore develops a theoretical framework to understand taxation as a financialised accumulation strategy where the state serves as an important—if not problematic—source of real estate profit.