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

2. 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

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

4. 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

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

6. 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

7. 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

8. 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

9. 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

10. 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 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

11. 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

12. 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

13. 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 ( %*30)
(150+50%*-30)
April 7, 2019
L’avenir du logement social en Europe

14. 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 are for sale in Koopgarant, mainly current rental dwellings
April 7, 2019
L’avenir du logement social en Europe

15. 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

16. 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