Demise of the Dutch social housing tradition: impact of budget cuts and political changes

At the beginning of the financial crisis in 2008, the Dutch housing associations were in the position to perform a kind of anti-cyclical housing production that could save, at least partially, the total housing production in the Netherlands. In this contribution, we give insight into the way the housing associations managed to fulfil this specific task and more in general if the associations managed to strengthen their position since the economic crisis. After presenting the development and the main characteristics of the Dutch social rented sector, we give an overview of the general economy of the Netherlands since 2008, which suffers from the global credit crunch, followed by the debt crisis and the Euro crisis. Because of the strong international relations and the big size of the Dutch banking sector, the Netherlands appears to be very vulnerable for international financial problems. In the aftermath of the credit crunch, the Dutch government decided to give priority to a sound public budget and announced in 2010 and 2012 huge budget cuts. The rented sector was already faced with drastic reforms and huge budget cuts by the start of the Rutte I Cabinet in 2010. These policies are described and analysed. The increased impopularity of housing associations explains that these social housing providers were extremely hit by additional budget cuts. For the housing associations, the situation is threatening. The Rutte I and Rutte II Cabinets seem not to be aware of the rich tradition of the Dutch social housing sector and want to reduce the size of the social rented sector (now: 31 %) substantially. This contribution argues that there is the danger now that the austerity measures of the current government (Rutte II) will lead to the demise of the Dutch social housing tradition, although the housing associations could be a part of the solution for alleviating the current problems on the housing and construction market.     

Public mortgage guarantee: instrument to cope with impacts of the financial crisis on the owner-occupied housing market evidence from the Netherlands

The global credit crunch had a deep impact on the mortgage markets in Europe, including the Netherlands. When the credit crunch transformed into a debt crisis, this impact deepened. The impact of the credit crunch and the debt crisis (together: the global financial crisis) on the Dutch housing market is described here. The Dutch government started to react with a stimulating policy but since 2010 austerity measures have become dominant. The National Mortgage Guarantee (NHG) has been applied as an instrument to shelter home-owners against the hardship of the financial crisis. In this paper the role of National Mortgage Guarantee in the Netherlands is analysed. Particular emphasis is placed on the role of this guarantee as an instrument to cope with the impact of the financial crisis on the national owner-occupied housing market. The performance of NHG in 2010 is elaborated. The conclusion is that NHG has made the Dutch owner-occupied housing sector more resilient during the financial crisis.     

The continued retreat of non-profit housing providers in the Netherlands

After the abolishment of object subsidies for housing construction and renovation in the mid 1990s, Dutch housing associations, the main non-profit housing providers in the country, heavily relied on market activities, such as selling homes to owner occupiers, to generate income for their social activities and to contribute to urban development policies. This worked well, which was one of the main reasons that these housing providers could adopt a wide field of operations, including not only the management and development of affordable housing for low-income groups, but also housing in other market segments, plus activities regarding care, welfare, local economy, employment and education. Recent economic and political developments, however, have caused housing associations to return on this path. Central in this paper is a research among Dutch housing associations about their values, strategic positioning and strategies. The research was executed in two waves (conducted in 2010/2011 and in 2013/2014, respectively), each consisting of a panel survey and interviews with selected panellists. This paper presents the results of the second wave. It is expected that after the first wave of the research, new regulations, such as the national implementation of European rules on state support and the introduction of a new property tax, have resulted in a further retreat from non-social housing activities. The analysis shows that this is indeed the case, but that the main shifts in priorities have not taken place directly after the credit crunch, but in later years.     

Dutch Housing Associations: Current Developments and Debates

In the Netherlands, social housing accounts for 37 per cent of the total stock, and as much as 75 per cent of the total rented stock. For observers from outside the Netherlands this seems an anachronism. The dominant institution within the Dutch social rented sector is the housing association: a private organisation, functioning within the public framework of the Housing Act. This paper puts forward an explanation of why the Netherlands' social housing sector is so large. An overview is provided of the social housing institutions at sector level, their effectiveness is evaluated, and questions on the efficiency of the housing associations are posed. Several variants for the future status of housing associations are assessed and the political choice made in 2000 by the Netherlands government is elucidated. Finally, there is a discussion about the recent proposals encouraging housing associations to opt out of the public system and some recommendations are formulated for the Dutch social housing sector. It is possible that these could provide a source of inspiration for housing politicians elsewhere in Europe.     

Regeneration of Dutch post-war urban districts: the role of housing associations

In the Netherlands the regeneration of post-war urban districts is closely intertwined with the role of housing associations. This is hardly surprising, given that the housing associations have such a large share of the market (usually over 50%; sometimes nearly 100%) in many early post-war urban districts. This has caused a growing concentration of low-income households in those urban areas and a selective migration by middle- and high-income households from the city to the suburb. Official government policy on housing and urban renewal is directed at a redifferentiation of the urban housing stock. Specifically, the policy promotes more owner-occupation, larger and higher-quality homes, and a greater percentage of homes with a garden. This implies the demolition of social housing estates and selling social housing. The position of housing associations in the regeneration of Dutch post-war urban districts is somewhat enigmatic. On the one hand, national government is expecting them to take initiative and invest in urban renewal; on the other, government is urging them to cut down their market share. How are housing associations coping with this paradoxical challenge? And what are the current national policies about the position of housing associations? Aedes (the umbrella organisation of Dutch housing associations) and the Dutch Ministry of Housing have agreed upon the so-called great transition of housing associations. Here we explain and critique this great transition, which will hamper the current regeneration of Dutch urban districts. As an alternative we present the new transition.     

The incomplete privatization of the Dutch housing market: Exploding house prices versus falling house-building output

This paper addresses the coordination problems in the liberalized housing market in the Netherlands during the 1990–2004 period. In particular, the mismatch between the explosion in house prices and the stagnation in house-building activities during the past six years is under investigation. It is argued that there is still a marked discrepancy between the language used in the policy discourse and the supply and demand situation on the Dutch housing market. One could argue that the Dutch government implemented a double-hearted, incomplete privatization. As a result of the mismatch between actual housing policy and market developments, output is stagnating and the housing shortage is growing sharply. The closing section presents some possible means to overcome these problems.     

Demonstration projects and sustainable housing

Because of the complicated structure of the built environment, it is frequently difficult to obtain good results on sustainable development projects. In The Netherlands, the Dutch government have used a range of new steering instruments which have cleverly enabled innovation to take place within a market economy. This imaginative governmental process uses covenants, network management and above all, demonstration projects to assess the feasibility of innovation. The authors describe the process and consider examples from energy efficient and sustainable housing, highlighting the importance of clear targets.     

The Italian housing system and the global financial crisis

The paper describes the main features of the Italian housing system and the relatively recent changes toward a more market-driven model and their respective critical elements. It also provides an analysis of the effects of the current global financial crisis (GFC) on this system and discusses how the government, market actors, and households are dealing with it. In comparative terms, the impact of the credit crunch has been softened by the crucial role traditionally played by the family in funding home ownership and by certain policy measures. But the GFC has led to further cuts in housing policy and to diminished economic capacity among households. Affordability was a severe problem even before the GFC, especially in the rental sector. Social housing is now collapsing, and there is a great deal of uncertainty about the future of new programs under development just before the crisis.     

Stagnation in Dutch housing production and suggestions for a way forward

This paper examines the stagnation of the Dutch housing production in the late 1990s and identifies possibilities for raising production in the near future. Dutch housing production is placed in a theoretical and historical context. Special attention is devoted to the relationship between housing production, price developments, the economic cycle and urbanization policy. These form the basis for an explanation of the stagnation of Dutch housing production. In addition, it identifies a number of obstructive and disruptive influences in play. Because these are partly steered by government policy, the government needs to re-think its role in the housing (construction) market.     

Demonstration projects and sustainable housing

Because of the complicated structure of the built environment, it is frequently difficult to obtain good results on sustainable development projects. In The Netherlands, the Dutch government have used a range of new steering instruments which have cleverly enabled innovation to take place within a market economy. This imaginative governmental process uses covenants, network management and above all, demonstration projects to assess the feasibility of innovation. The authors describe the process and consider examples from energy efficient and sustainable housing, highlighting the importance of clear targets.     

The global financial crisis and the Australian and New Zealand housing markets

The evolution of the US sub-prime mortgage meltdown into a global financial crisis clearly demonstrates the increasingly integrated nature of mortgage and capital markets. However, notwithstanding the global scale and severity of the recent financial crisis, the effects of the credit crunch were mediated by nationally constituted housing markets, the activities of local financial institutions and national housing policies. Adopting an institutional perspective this paper critically examines the manner in which the financial crisis impacted upon the Australian and New Zealand housing markets. These countries had actively participated in the liberalisation of mortgage markets and experienced significant house price inflation post-2000 but, in contrast to the USA and some European experiences, they escaped a severe housing downturn. It is argued that a combination of pre-existing institutional practices, market conditions and government policies acted to shelter these markets and created the potential conditions for a new housing boom. While avoiding a deep housing slump, both Australia and New Zealand have to address the on-going macroeconomic implications of a system predicated on housing inflation and capital gains.     

Poverty and Housing in the Netherlands: A Plea for Tenure-neutral Public Policy

The central issues of this paper can be summarised in two questions. To what extent does the Dutch rent subsidy programme keep rented housing affordable for low-income groups? What kind of government policy could ensure, to a reasonable extent, that low-income groups in the Netherlands have access to affordable housing, even when the economy is not functioning optimally? The paper reviews how the net housing expenses have developed in the Netherlands since the 1970s. It then discusses the Dutch Rent Subsidy Act of 1997 and looks at the impact of this scheme on the net rent ratio for households with low incomes. The fiscal arrangements for home owners are dealt with. The data are drawn from the Housing Demand Survey (WBO), the Social and Cultural Planning Bureau and the Ministries of Housing and Finance. The paper concludes that the introduction of a tenure-neutral public policy could make a robust contribution to the fight against poverty.     

Social housing management: Concerns about effectiveness and efficiency in the Netherlands

Recently a discussion flared up in the Netherlands on the effectivenessand efficiency of providers of social housing. Though most people feel that Dutch housing associations are run effectively, there are no data to underpin this conclusion. The government is not clear about the criteria for each housing association: most of the criteria are unquantified and, to some extent, contradictory. Nor is it clear whether every individual housing association has to meet these criteriato the same extent. Many more doubts have been raised about the efficiencyof social housing providers, as housing associations do not act as if theywant to maximize profits.Several suggestions have been put forward to improve efficiency: periodicalexternal visitations, benchmarking, the introduction of a Real Estate Index,and outsourcing a substantial part of the management and development activities. The main conclusion so far is that we are under-informed aboutthe efficiency of housing associations. Some advisory bodies argue that theoverall efficiency of housing associations would improve if they were transferred from the semi-public to the private sector. They claim that thedemand side of the housing market could be strengthened by the introductionof housing vouchers and suggest that housing associations opt out of the public sector.These options fail to take account of the fact that we are insufficiently informed about the efficiency of commercial players on the housing market and the inherent shortcomings of free housing markets when it comes to accessibility, affordability and quality for low-income households, externaleffects and the cherry-picking of tenants by commercial landlords. Hence, weconclude that until more information is available on the true effectivenessand efficiency of housing associations, there are good reasons to continue their current hybrid status, which combines public tasks and market activities.     

European Competition Policy and National Housing Policies: International Implications of the Dutch Case

This contribution explores the relationship between housing policy, which is the responsibility of national governments, and competition policy, including the decision on the legitimacy of state support, which is the responsibility of the European Commission (EC). The paper paints a general picture of EU policy on competition and state support and describes the Dutch social housing system. Attention then turns to the recent intervention by the European Commission in the governance of Dutch social housing and it is asked whether the factors that prompted the intervention exist in other EU member states as well. The analysis shows that this is indeed the case. It is concluded that the intervention of the EC in the Netherlands could become a precedent for other European countries, particularly for those countries that opt against a residualised social rented sector and for a competitive role of social housing providers on the housing market.     

Housing system reform: the opinion of advisory boards versus political reality in the Netherlands

This paper describes to what extent a more or less collective feeling of urgency to reform the Dutch housing market is addressed in the political arena. By doing that, it sheds some light on the effectiveness and influence of academic research and recommendations on the political decision making process. We conclude that the suggestion of several advisory bodies to start a serious reform of the housing system in the Netherlands is, due to coalition considerations, almost fully neglected by the Dutch Government. Although there is a common understanding among experts and interest organisations in the Netherlands that the current housing systems needs radical changes, coalition politics in the Netherlands are apparently more important to explain current housing policies. We conclude that the effectiveness and influence of academic research and recommendations on the political decision making process was quite modest in the last couple of years and try to explain the gap between academic research and political decision-making on Dutch housing policy.     

High dwelling vacancy rate and high prices of housing in Malta a mediterranean phenomenon

Current data from South European countries, especially Malta, indicates the existence of some contradictory forces in the housing market that defy the law of supply and demand and require explanation. In a ‘normal’ housing market, it can be expected that a high dwelling vacancy rate would help keep down the price of housing. In Malta, however, both the vacancy rate and housing prices have been rising in tandem for decades, unabated, even under the recent international market crunch. The government housing policy, which has always stimulated homeownership, is still encouraging new house building. Despite the high number (over 50,000) of vacant dwellings, the authorities issue more than 6,000 building permits annually to the private sector. In this paper we outline and explain the major factors contributing to this unlikely combination. Doing so, we use a welfare-state perspective. We identify and explain the underlying factors that are collectively responsible for such a paradox: the state; the family; the powerful Catholic Church; the underdeveloped Maltese financial market; and the paternalistic culture prevalent in Malta.     

A note on the efficiency of stochastic market equilibria with rationing

In this note we study a housing market where a heterogeneous housing stock is exogenously given and demands are derived on the basis of discrete choice models. We assume that prices are fixed by the government for policy reasons. The population is initially distributed over the housing stock in some exogenously given way and has to be redistributed in accordance with its own desires. Moreover, new households who do not yet occupy a dwelling may enter the market. Excess demand is assumed to occur for some or all housing types. The (re)distribution takes place by means of rationing. It has been shown that a rationed equilibrium can be reached by giving every household a probability of being able to realize the move to its desired dwelling type. It is observed in this paper that such equilibria are in general Pareto-inefficient, since voluntary exchange possibilities may persist. Furthermore, it is shown that in general Pareto-efficient rationed equilibria will exist as well. A proof is given by means of an algorithm of practical interest, and the procedure is illustrated by means of an example that refers to the Dutch housing market. In general, there will be a number of efficient equilibria, some of which can be regarded as more equitable than others.     

Development of house prices in the Netherlands

This contribution concerns the development of prices in the owneroccupied sector in the Netherlands. The analysis focuses on the development over two decades, from 1975 to 1995. That period may be divided into a number of phases of growth and stagnation, as defined by fluctuating house prices. Some explanations for these fluctuations are offered here. These include the influence of regulation by government and other major institutions; demographic developments; developments in the supply of owner-occupied dwellings; developments in a number of economic variables; and the dynamics of the market. Then an attempt is made to estimate how prices will develop in the future. It should be kept in mind that this forecast is based on statistical relations that were calculated with reference to the past. In the event those relations change in the future, the model estimated here would not yield good predictions. Peter Boelhouwer is researcher at the OTB Research Institute for Policy and Technology at Delft University of Technology, The Netherlands. His research focus has been general housing policy, housing finance and comparative housing research. Johan Conijn is director of the OTB Research Institute for Policy and Technology at Delft University of Technology, The Netherlands. His research focus has been general housing economics, housing finance, and general housing policy. Paul de Vries is assistant-researcher OTB Research Institute for Policy and Technology at Delft University of Technology, The Netherlands. His research focus has been building market and statistical analyses.     

POLICY REVIEW The Impact of Housing Policy Changes on Housing Associations: Experiences in the Netherlands

For decades, housing associations in the Netherlands were the country's landlords of social rented housing par excellence. Presently housing associations own and administer over 90 per cent of the social rented stock, which now comprises 37 per cent of the total Dutch housing stock. The changes in Dutch housing policy which were made from 1993 onwards, have also changed the role and position of the housing associations. The financial ties binding the social housing sector and the national government have largely been dissolved. Responsibility for adequate housing was decentralised from the central government to the local authorities. Municipalities and housing associations have developed a new tradition of performance agreements on local housing policy. This paper reviews the response of housing associations to the circumstances created by the new housing policy of the 1990s.     

Moving Up or Moving Down? Housing Careers of Turks and Moroccans in Utrecht,the Netherlands

In the Netherlands, the housing conditions of most ethnic minorities are still inferior to those of the native Dutch. The focus of the paper is the housing careers of Turks and Moroccans in the city of Utrecht. Despite some improvements and certain exceptions, they still find themselves in housing conditions inferior to those of the native Dutch. A career approach is necessary to explain these less favourable housing conditions because the present situation cannot be seen separately from decisions taken earlier. Some of these decisions are taken in the field of housing, but it is argued here that decisions taken on the labour market and with respect to the household itself are of major importance. It is also argued that the ethnic cultural approach, which stresses the housing preferences of minority ethnic groups, does not adequately explain the housing conditions and housing careers of the Turks and Moroccans in the Netherlands.