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.     

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.     

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.     

The credit crunch: impacts on the housing market and policy responses in the Netherlands

This contribution deals with the impact of the credit crunch on the Dutch housing market and the policy responses of the Dutch government so far. Reinhart and Rogoff have presented an overview of credit crises after WW II: what are the general characteristics and impacts? Also in the Netherlands, banking problems were imported from the US. The open economy of the Netherlands appeared to be very vulnerable to the worldwide credit crunch. Also in this country the real economy worsened. Housing construction fell sharply, while prices of residential properties fell more gradually. After giving an overview of the Dutch government’s current policies to stimulate housing construction and renovation, we consider whether the Dutch economy is following the general pattern sketched by Reinhart and Rogoff. If so, we could expect a continuation of the crisis on the housing and construction market for another 4 years.     

The future of Dutch housing associations

This paper discusses the future of the social rented sector in the Netherlands. There are several reasons why the position of this sector is currently under close scrutiny. Whereas attention to social rented housing had lapsed by the start of this century, the growing housing shortage and stagnation in the restructuring of older urban areas brought this sector back into the political spotlight. Also the European Commission is having a major impact on the future position of the sector. The Commission has ordered the Dutch Government to establish a level playing field by abolishing the privileges of the housing associations. Against this background, this paper discusses the possible tasks and proper functioning of the Dutch housing associations.     

Shifting back-changing organisational strategies in Dutch social housing

Since the financial liberalisation from the government in the late 1980s and the 1990s, Dutch housing associations have been very dynamic, embracing both commercial and social activities, becoming increasingly reliant and dependent on market circumstances and undergoing a large number of mergers. In recent years, the Dutch social housing sector has been under increased pressure due to the global financial crisis, increased levels of taxation and the national implementation of EU regulations on ‘Services of General Economic Interest’. It seems likely that factors like these have had an effect on the organisational strategies adopted by housing associations, but the nature and magnitude of these effects are not well known. This paper explores these effects through a survey among Dutch housing associations. The results of the survey were analysed using a social-commercial dimension and a ‘prospector’ – ‘defender’ dimension. Our analysis reveals that housing associations are focusing more on traditional social housing tasks and ‘defending’ strategies, implying some reversal of the developments that had occurred in recent decades.     

Social housing in Spain: what role does the private rented market play?

The global economic and financial crisis has hit the Spanish economy hard, creating an unstable framework for employment and growth. Since 2007, housing markets have been deeply affected by the crisis. The private rented market has exhibited two specific consequences: on the one hand, the bursting of the real estate bubble has inhibited profit gains in the homeownership sector, providing better incentives to operate in the rented market. On the other hand, huge social conflict has emerged in relation to the lack of proper shelter for certain households which can be seen in the increase in evictions and in homelessness. We want to focus on the latter: since Spain lacks a critical mass of social housing, low-income households have been attracted by the private rented sector, particularly during expansion periods, as quite often there is no available (and affordable) alternative. In periods of economic recession, the substantial pressure that rents put on the financial situation of these households might even cause them to move out of their homes. The hypothesis we will test in this paper is that private rented markets fill several aspects of the role of social housing provision in Spain reinforcing the negative effects the lack of social housing creates in the country, highly visible during recession periods.     

Social Housing as a Transitional Tenure? Reflections on the Netherlands' New Housing Memorandum 2000-2010

This contribution gives some reflections on the Netherlands' New Housing Memorandum 2000-2010, which was published on 15 May 2000. This Housing Memorandum urges the housing corporations (the social housing organisations which own 37 per cent of the housing stock) to sell 500 000 dwellings in 10 years. This seems to confirm Harloe's assertion that social housing in Europe is only a transitional tenure. Even in the Netherlands-champion of social rented housing within the European Union-the owner occupied sector would seem destined to marginalise the social rented sector in the long run. This paper argues that the housing corporations, being private, independent social entrepreneurs, will be only partially inclined to take the political message of the Housing Memorandum to heart. It is expected that the Dutch social rented sector will remain a differentiated sector and continue to blossom alongside home ownership. Harloe's theory will, in short, not be confirmed by the housing developments in the Netherlands.     

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.     

Market orientated housing policies and the position of middle-income groups in the Netherlands

As a result of the poor economic climate and neo-liberal policies, the welfare state in many European countries is becoming more residual and is directing its efforts at seriously deprived households. This development is affecting the middle-income groups, who enjoy less protection than before and are therefore forced to become more self-supporting. We can find a good illustration of this trend in the changing position of these groups on the Dutch housing market. The market orientated EU policies are denying middle-income households access to the social rented sector. Meantime, these households are already encountering accessibility problems in the owner-occupied sector due to the economic crisis and the tougher mortgage conditions set by the financial institutions. This paper describes the housing policy changes against this background and analyses the position of middle-income groups on the Dutch housing market.     

荷兰的社会住宅：明确的传统与未知的将来

在荷兰,社会（公有）出租的住房的比重占到了35％——是欧盟范围内这一比例最高的国家。这一部门是在1901年住房法确立的公共框架下由独立经营的住房协会所主导的。本文阐述了住房协会在1995年“总收益与收支平衡实施办法”执行前后的历史渊源和发展变化。自从这一办法实施以来,住房协会不再扶政府接受实物补贴。但是．它们却变得愈加富有。这一点将会影响住房协会的社会形象。由于结合了社会与市场行为,在坚实的公共框架下运作、并经营高品质多样化的住宅,荷兰的社会住宅可为其他欧盟国家、俄罗斯和中国提供借鉴。     

Transforming Social Housing: Taking Stock of New Complexities

The last 10 years has been a period of rapid change in the social rented sector, reflecting broader changes in the nature of housing problems, structures of housing provision and patterns of housing consumption in the UK, rooted in fundamental shifts in the political, economic and social landscape. By way of introduction to this special issue, this paper cuts across conventional frameworks of analysis to explore the pressures and challenges raised by these changes for the social rented sector through consideration of three key facets of the contemporary housing system: market change, community dynamics and modes of governance. Within this framework, patterns of increasing differentiation and fragmentation within the UK housing system are revealed and the extent to which the transformation of the social rented sector is working with the grain of these changes is considered.     

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.     

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 provision of private finance for social housing: An outline of recent developments in funding existing housing associations in England

With successive Housing Acts in 1985 and 1988 the British government declared its intention to create an environment for the integration of social housing and private finance. This paper draws on empirical research to consider the success to date this policy initiative from the perspective of financial institutions. This research concentrated on attitudes to the availability and suitability of financial instruments for social housing funding for existing housing associations in England. After an introduction clarifying the framework in which funds are raised, the first substantive section provides an overview of the characteristics of the potential lenders to social housing in England and of the regulatory environment affecting their lending policies. Section 3 outlines the main uses to which funds are put and the types of financial instrument currently available to housing associations. The paper next examines the scope for increasing the supply of these funds through wholesale markets, particularly via The Housing Finance Corporation. One attempt to expand the supply of finance to existing associations through ‘credit enhanced’ funds is then described. The paper concludes by evaluating progress so far and by questioning the degree to which social housing will have to change if private finance is increasingly to replace public sector funds.     

Happy Returns: The Individual Investor as a Source of New Capital for Rented Housing in a Time of Changing Social Welfare Structures

Recent changes in the ideology of welfare have led to reductions in the scope for some individuals to play their desired part in funding the social welfare system through taxation. At the same time, there is a widely held view in the housing world that over the next 20 years the supply of rented homes is going to be too low to meet rising demand. Prospects for significantly increased public investment in new rented housing look slight. Private finance is now seen by government as the preferred source of capital funds for the creation of extra housing, not only in the private rented sector but also in the housing association sector, and perhaps in future in the local authority sector. However, the financial institutions-the most often quoted source of private finance currently appear reluctant to take on this role, at least in the privately rented sector. Presently, little attention is being given to the individual, as opposed to the institutional, investor. This paper-based on evidence gathered in a national survey of individual shareholders in companies listed on the London Stock Exchange-explores the possibility of individuals becoming more involved in investing capital in rented housing, both private and public. It suggests that there is some interest in such investment among current shareholders who have considerable assets. More specifically, it argues that there is a group of ethical investors who would be willing to invest in rented housing, some of whom may be willing to accept a lower rate of return on rented housing than on competing investments. Together these groups (and other 'socially disenfranchised' citizens) may offer a source of considerable capital to complement that which institutional investors may provide. If such capital is to be forthcoming, policies are required which address their requirements. A number of suggestions are put forward.     

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.     

The Uneven Development of 'Social Rented Housing': Explaining the Historically Marginal Position of Housing Associations in Britain

The first part of this paper is concerned with rethinking the notion of social rented housing, arguing that it is appropriate to refer to a dual social rented sector, both now and in the past, and to set municipal and non-municipal models of provision alongside the dominant consumption side models of mass and residual social housing. The idea of uneven development of social rented housing in Britain refers to the numerical dominance of local authority provision, and the insignificant quantitative contribution of housing associations and their predecessors until the last years of the 20th century. The second part of the paper poses the question of why the voluntary sector failed to thrive after 1918, and examines some historical evidence from four key periods up to the early 1960s. It is argued that the poor performance of these organisations immediately after 1918 led to them failing to overcome local authority opposition and civil service scepticism in the 1930s.     

The different faces of private rented housing

The relation between public policy and the private rented sector is usually unclear. The private rented sector often suffers from public policy, although private landlords mostly enjoy fiscal advantages as well. In many European countries, private renting housing has been losing ground. Nevertheless, private rented housing fulfils a number of useful functions in the housing market: as a tenure for urban starters; for the elderly; and for a mobile, well-to-do segment of the population engaged in flexible labour markets. The main lines of seven country profiles are sketched here: (West) Germany, England, the Netherlands, Sweden, France, Canada and the United States. In his comparative contribution at the end of this special issue, Maclennan points out that the private rented sector has indeed declined in many European countries. But he also shows that in countries like the USA, Germany and Sweden the sector has had a broadly constant share since about 1980. In the future, private rented housing will remain an attractive sector, at least for those who are unable to afford owner-occupied housing and those unable to gain access to social housing. Hugo Priemus holds the chair in housing at Delft University of Technology and he is managing director of OTB Research Institute for Housing, Urban and Mobility Studies. Duncan Maclennan is McTaggart professor at the Centre for Housing Research and Urban Studies, University of Glasgow, Great Britain.