Two ways of privatisation Ducth social housing Two ways of privatisation L’avenir du logement social en Europe Marja Elsinga April 7, 2019

L’avenir du logement social en Europe Overview Dutch social housing Privatisation of the social rental sector Sale of social rental dwellings Conclusions April 7, 2019 L’avenir du logement social en Europe

Housing tenures in different countries Norris and Shiels, 2004 April 7, 2019 L’avenir du logement social en Europe

L’avenir du logement social en Europe Development of housing tenures in the Netherlands, Dutch housing demand survey April 7, 2019 L’avenir du logement social en Europe

L’avenir du logement social en Europe Some figures 2,3 million dwellings 35% of the housing stock Around 500 housing associations On average 4.500 dwellings April 7, 2019 L’avenir du logement social en Europe

The position of housing associations They have a private history The became more tied to the government after the second World War Since the sixties they became more independent in rent setting, sale and investment In 1995 they became financially independent: no more subsidies for social dwellings Background: in line with earlier developments + remove financial burden government (Maasstricht treaty) April 7, 2019 L’avenir du logement social en Europe

The regulation of the social rental sector Housing associations are private foundations or associations Registered under terms of Housing Act Their tie to the government is the Social Rental Sector Management Order (BBSH): Internal supervision External supervision Agreements with local government April 7, 2019 L’avenir du logement social en Europe

Financial support for social housing No more supply subsidies available Social Rental Guarantee Fund (WSW): provides government back guarantees for loans Exemption from corporation tax until 2011 Reduction on land prices for social dwellings Social Housing Fund (CFV): support in case of bankruptcy, financial supervision April 7, 2019 L’avenir du logement social en Europe

L’avenir du logement social en Europe The current situation Housing associations became rich The interest rate since 1995 was much lower than assumed in 1995 House prices went up enormously since 1995 Discussion on: The performance of housing associations On the legitimacy of housing associations The future of Dutch social housing EU competition policy April 7, 2019 L’avenir du logement social en Europe

Sale of social rental dwellings The sale of social rental housing became part of the asset management: the revenues of sale can be invested in urban renewal Around 15.000 each year are sold There are many houses for sale but many tenants are not interested in buying since renting is cheaper Social home ownership schemes become more and more populare April 7, 2019 L’avenir du logement social en Europe

Why renewed interest for intermediate tenures? Owner occupied market: High house prices, there is huge demand for affordable home ownership Urban renewal: A need for differentiation in the housing stock create neighbourhoods with mixed tenures Asset management: selling dwellings became instrument in asset management: revenues of sale are invested in other projects April 7, 2019 L’avenir du logement social en Europe

L’avenir du logement social en Europe Koopgarant Social home ownership (not shared ownership) The dwellings are sold at a price 25-30% below market prices When the dwelling is sold the house price increase (or decrease) is shared 50-50 Dwellings are always sold back to housing association (guarantee to buy back) Fair value as framework from central government April 7, 2019 L’avenir du logement social en Europe

L’avenir du logement social en Europe An example (1.000’s Euro) buying selling Value of the dwelling 200 230 170 Price paid 150 House price increase 30 -30 Price received by seller 165 (150 + + 50%*30) (150+50%*-30) April 7, 2019 L’avenir du logement social en Europe

Experiences with Koopgarant There is a foundation that sells the product: contracts and support for implementing 120 housing associations are member of the foundations 6.000 dwellings are sold as Koopgarant now Almost 40.000 are for sale in Koopgarant, mainly current rental dwellings April 7, 2019 L’avenir du logement social en Europe

Reasons to chose Koopgarant evaluation among 500 buyers, B&A 2004 Reduction on market price: 67% Lower risk because of sharing losses: 22% Lower risks because of buy back guarantee: 18% April 7, 2019 L’avenir du logement social en Europe

L’avenir du logement social en Europe Conclusions The Dutch social rental sector is large but decreasing The sector is rich and has freedom Therefore the sector is criticised: Social democrats: more regulation Christian democrats: legitimacy is main worry Liberals: smaller sector can do Current debate is about the agreement between social housing associations and the minister on urban renewal April 7, 2019 L’avenir du logement social en Europe