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theses

ETD doctoral

This dissertation investigates the growing integration between global capital markets and municipal finance. In the United States, financial activities make up an increasingly large proportion of overall economic activity, an expansion which is often referred to as financialization. One of the primary ways that financial markets have grown is through the transformation of various income streams into new financial instruments. In recent decades, financialization has drawn land, local governments and the built environment into relationships with capital markets in unprecedented ways. I examine a key and under-explored moment in the financialization of urban governance: the first experiments in municipally-sponsored property tax lien securitization beginning in the 1990s. Most cities that engaged in this form of financial engineering quickly abandoned it, with the notable exception of New York City, which has continued its tax lien securitization program for almost two decades. My study considers the experiences of these cities, how and why they undertook securitization, and the results of their efforts. Examining qualitative and quantitative data including ratings agency documents, private placement memoranda for tax lien backed securities, and the New York City Department of Finance annual lien sale lists, I contend that municipalities' varying experiences with this practice can reveal important insights about what this form of financial engineering offers to local governments. Analyzing tax lien securitization transactions, I show how financial intermediaries relied on the accounting and legal idiosyncrasies of asset-backed securitization to adapt the technique for municipal sponsorship. However, given high transactional costs, tax lien securitization failed to provide viable policy and financing solutions for most local governments. This study suggests that the practice endured in New York City in part because it served to reconfigure the local government's capacities and institutions in ways that met its particular needs for centralized administrative control and regulatory arbitrage.

ETD_5909

doi:10.7282/T3MK6FHX

Ph.D.

Includes bibliographical references

by Irene Tung

The author owns the copyright to this work.