The rise of the corporate tenant: legal relations, rent extraction and the management of risk in niche temporary housing markets

Abstract

Sub-contracting (rent-to-rent) emerges as a key model that enables non-owning real estate actors to benefit from property and extract exploitative and speculative rents from properties. This is particularly present in niche housing and the different segments of the short-term rental market. We name this phenomenon the rise of the “corporate tenant” and describe how non-owning real estate actors employ the law to carve out niches in the housing market. Thereby, reshaping tenant-owner relations.

Recent critical urban studies have argued that short-term platform real estate (Wachsmuth & Weisler, 2018) coupled with the expansion of global corporate ownership following the 2008 global financial crisis (Beswick et. al 2016) have become major drivers in the transformation of cities, housing, and rent relations. These accounts suggest that landlord-tenant relations and processes of renting out, accessing, managing, and maintaining the property are increasingly mediated, automated, and professionalized (Cocola-Gant et al. 2021; Fields, 2019; Sadowski, 2020). While it is commonly agreed that the crucial role that digital technologies play in these processes little attention is paid to the legal foundations of these mediations. Focusing on niche temporary housing (i.e., interim, fixed-term, and on-demand housing) in Zurich, and drawing on expert interviews, the paper outlines the legal arrangements through which real estate actors engage in high-risk and high-profit practices across segments of the short-term rental market. The analysis suggests that the corporate tenant does not simply mediate but also benefits from the property while securing rental flows to institutional owners and managing risk on their behalf.

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