Holland Metropole partner Bouwinvest and two of the Netherlands’ biggest pension funds have agreed to work together to boost the stock of affordable and care-related homes in the Netherlands through a new Social Impact Real Estate Partnership. 

Civil service pension fund ABP, which is one of the biggest funds in the world, has committed €250 million and building sector fund bpfBOUW another €150 million to the partnership. The partnership’s focus will be on housing for groups of people in the Netherlands who are currently finding it difficult to find a home. 

The Netherlands has a particular shortage of affordable housing with rents of up to €1,000 per month and the new partners say the alliance aims to provide housing for lower and middle-income earners. In addition, the partnership is actively looking to invest in urban areas that currently lack social amenities.

Social ammenities

Some 80% of the partnership’s investment will be in ordinary housing and care-related homes while the rest will tackle other community-based real estate such as schools or community centres. All the developments will be energy-efficient, climate-resilient and sustainable. 

Bouwinvest will manage the partnership on behalf of the investors. “An increasing number of pension fund participants want the funds they invest to not only generate good returns but also to make a positive contribution to society and the environment,” said Bouwinvest’s impact investment director Maya Savelkoul. 

APB chairman Harmen van Wijnen said the pension fund is focused on attractive long-term investments. “It is even better if these investments can also help solve social problems,” he said. “The Netherlands has a housing shortage and our participants know this as well. This partnership enables us to do something about the problem.”

Housing targets

Meanwhile, caretaker housing minister Hugo de Jonge has admitted the government’s target to build 100,000 new homes a year will be missed again in 2023, by around 10,000 units.

At the same time, De Jonge said, on top of the target of 900,000 new homes by 2030, a further 400,000 will be needed in the following decade. 

The next cabinet, he said, will have to face “important choices” because both “physical and financial space will have to be found to meet housing requirements and to develop a cohesive, long-term spatial planning vision for the country”.

The five Holland Metropole partner cities will get a combined €100 million from a special Dutch government fund to stimulate affordable housing projects which are at the planning stage but threatened by the current slowdown in housing construction.

In total, 145 local authority areas are benefiting from the StartBouwImpuls fund (SBI), which will help pay for 31,000 homes, 80% of which are classed as affordable. Local authorities, private developers and housing corporations are all involved in the projects which are eligible for a total of €300 million in government grants.

Caretaker housing minister Hugo de Jonge said the money would help limit the impact of the downturn in the current construction market, which has been hit by interest rises and higher costs. “This extra support for local authorities will generate more speed and more focus so we can keep building affordable homes,” he said. “It will kick start projects which threaten to stagnate because of the more difficult construction climate.” 

Rotterdam has taken the biggest share of the Holland Metropole money – €26.7 million – which will be used to help get 13 projects off the ground. Some 64% of the Rotterdam homes will be classed as affordable. 

The city’s housing chief Chantal Zeegers said the investment is “extremely good news for those behind the projects and people who are looking for somewhere to live.” The money, she said, “will allow us to build over 2,600 homes and these homes are really needed in Rotterdam.”

The city has also set up its own fund to contribute €5,000 per unit towards projects that don’t qualify for funding from the government scheme. 

The Hague will get €25.7 million from the fund to build nearly 2,800 homes while Amsterdam will get €18.3 million for 14 projects totaling 2,105 units. Utrecht is being given over €19 million for eight projects with 1850 units and Eindhoven nearly €9 million for four projects and almost 900 homes. 

Haarlemmermeer, which is also a Holland Metropole member, will receive €2.7 million to help complete two projects with 262 homes. The money is being targeted at projects that are well into the planning stage so that work can start by 2025, even though changing economic circumstances have altered the business case. On average the government is contributing €10,000 to each housing unit.

The government’s most senior advisory body, the Council of State, has told housing minister Hugo de Jonge to improve his draft legislation aimed at increasing the amount of rent-controlled property in the Netherlands. 

At the moment it is “unclear” whether the new Affordable Rent Act will help prospective tenants and whether it will lead to a better supply of affordable rental housing, the council said in an analysis of the draft legislation.

There is also a “real risk” that the bill will lead to landlords selling their properties and a downturn in new construction, the council said, adding that it is also “unclear” how the minister intends to manage the risk that the bill will lead to the sale of existing rentals and fewer new builds. 

Scarcity and high demand

The current high rents are caused by scarcity and high demand, the advisory group said. “But in the legislation, the report said, the government is not paying enough attention to the causes of the lack of supply and the “interaction between the social sector, the owner-occupied market and the private rental sector”. 

The report was published on the same day that CBRE published new figures suggesting as many as 100,000 rental properties could be removed from the market over the next 20 years because of the increase in rent controls.  

Dutch developers have been warning for over a year about the likely impact of the increase in rent controls on the rental market and fewer new homes than expected were completed last year. The shortfall this year could be as many as 10,000, housing minister Hugo de Jonge warned earlier in November. 

Protection for tenants

De Jonge said in a reaction to the Council of State’s recommendations that new tenants usually pay ‘substantially more” for the same property when they sign a lease. The aim of the expansion of rent controls, he said, is to put an end to this and to offer tenants more protection. 

However, he said, it is “crucial” to focus on both regulation and on “realising an attractive investment climate for new affordable housing”. De Jonge points out that the ministry has already increased the temporary rental surcharge for new housing from 5% to 10% and is giving more weight to energy efficiency in determining the maximum rent for a property.

Now, he said, work can begin in adapting the bill to make it more substantial so that it can be debated in the lower house of parliament. The bill could come into effect in July 2024, he said, six months later than originally planned, but much will depend on the position of the next government. 

Developers, meanwhile, have welcomed the Council of State’s position. “We understand that excesses on the housing market need to be tackled,” said Desirée Uitzetter, chairwoman of developers organisation Neprom and area development director at Holland Metropole partner BPD. “But this legislation, in its present form,” she told the Financieele Dagblad “is not going to contribute to that.” 

Rotterdam receives €26.7 million from the government for the construction of new homes that are at risk of stalling, due to increased interest rates and construction costs. With this financial support from the ‘Startbouwimpuls, Rotterdam can build 2,647 homes within the next two years, with 64% of them falling into the affordable housing segment. Councilor Zeegers (Climate, Construction, and Housing): “This is incredibly good news for the initiators and, of course, for those looking for housing. With government support, the construction of over 2600 homes can start quickly, with the majority in the social and mid-range. And I am very pleased with that because these homes are much needed in Rotterdam.”

Faster start of housing construction in a large number of Rotterdam neighborhoods Projects from both housing associations and developers are eligible for the Start Construction Impulse. These include Alexanderpark Rotterdam (Prins Alexander), De Graaf (city center), De Sax (Kop van Zuid), Hartenruststraat (Oude Noorden), Hof van Maasdam Park (16Hoven), Klapwiek (Prins Alexander), Phase 1 Max Euwekwartier (Brainpark), Odeon (city center), Oost-Sidelinge (Overschie), Soetendaalseweg and Ruivendwarsstraat (Oude Noorden), Tamboer 2 Oost (Crooswijk), Timber (Dordtsestraatweg Rotterdam-Zuid), and Vlietpark phase 2 (Hoogvliet). On average, a financial contribution of €10,000 per home is provided.

Support for other housing projects Not all projects affected by deteriorating market conditions qualify for the government’s Start Construction Impulse. “We will engage in discussions with the initiators of these projects to see where we can help them so that they can also start building,” says Councilor Zeegers. The municipality utilizes the Rotterdam Start Construction Scheme, the Bottleneck Fund of the Province of South Holland, and the 6th tranche of the national Housing Construction Impulse. With these housing impulses, municipalities can accelerate the construction of new affordable homes. If a project can build a larger number of affordable homes than planned, additional funds are available from the municipal Continuation Fund.

Continuing construction Earlier this year, Rotterdam, along with market parties and housing associations, signed a Continuation Agreement, announcing the Rotterdam Start Construction Scheme. In addition to contributions from the government and the province, Rotterdam has reserved €10 million through its own Continuation Scheme to revive stalled affordable middle-income housing projects. By combining national, provincial, and municipal continuation schemes, Rotterdam can continue building affordable homes at a faster pace.

Starting within two years In the coming period, Rotterdam will assess which of the above-mentioned construction projects, as well as those not receiving government funds, qualify for a municipal contribution of up to €5,000 per home. These are projects in the middle segment that, without this contribution and due to the current economic headwinds in the construction sector, cannot start. The Rotterdam Start Construction Scheme includes a maximum of €10 million and is open until June 2025.

Dutch housing minister Hugo de Jonge has told the Volkskrant newspaper that foreign investors are welcome in the Netherlands and that new rent control rules will give them more security about the returns they will make on their investments here. 

The minister was commenting on the decision by two large foreign investors – Capreit and Heimstaden – to sell around 10,000 rental properties in the Netherlands. But both firms are selling their Dutch real estate to raise capital for other investments, not because of the expansion of rent controls, the minister told the paper.

The outgoing government is planning to expand the current rent control system to cover homes worth up to €1,100 a month, rather than €808 as at present, although the legislation has not yet become law. Many developers and investors say this means it will be no longer profitable to rent out homes and small investors in particular have already begun selling their property on the open market.   

Building new homes more profitable

“Most private landlords are doing just fine,” De Jonge said. “The new law on affordable housing will allow many of them to continue to charge the same level of rent. And building new homes will also be profitable. Next month I will make it clear how much extra landlords can charge for new property – it will be considerable.” Currently, landlords can charge an additional 5% rent for newly built property for a 10 year period.  

Landlords will also be able to charge more for homes with a high energy label because, De Jong said, making property more sustainable should be rewarded. Homes with outside space, such as balconies, will also have higher rents. 

Reliable government

“Foreign investors, come to the Netherlands,” De Jonge said. “It is a country with a reliable government and with high standards of morality when it comes to payments. We need a lot of investment to build 981,000 new homes, and that needs to come from the Netherlands and abroad. All reliable landlords and developers are very welcome, without compromising the necessary protection for tenants. 

De Jonge has also told MPs during a debate on the housing crisis that he will look into calls to set up some form of guarantee for new housing developments which would allow projects to go ahead, even if 70% of the properties had not yet been sold. 

He has also warned that the current transfer tax paid by investors of 10.4% is “really too high” when looked at from an international perspective. This is something that should be on the table during the negotiations to form a new government after the November general election, De Jonge told MPs. 

The Holland Metropole alliance has organised a series of events for this year’s Expo Real real estate trade fair in Munich, ranging from a lunch for investors to a focus on rebuilding the devasted Ukrainian city of Mariupol.

Eindhoven’s mayor Jeroen Dijsselbloem will be taking to the Exhibitors Stage in C2 on Wednesday as part of a session about creating social value and better returns by investing in cities. Dijsselbloem, a former Dutch finance minister, will be joined by ULI Europe chief Lisette van Doorn and Coen van Oostrom, CEO of ground breaking real estate technology firm Edge – making it an event not to be missed. (C2/430 at 10 am)

The magic of innovation districts is up for discussion later in the morning, and The Hague’s urban development chief Robert van Asten will be outlining the city’s approach to bringing new life back into industrial areas. (A2/A12)

Regenerating Mariupol

Later on Wednesday, Mariupol’s deputy mayor Sergiy Orlov will be talking about the humanitarian effort and presenting Mariupol Reborn, a major programme to revive Mariupol once it is back in Ukrainian hands. 

Ukraine’s international partners, European cities and large Ukrainian businesses, together with Mariupol City Council, have joined forces to plan the regeneration of the city after the liberation using best practices and the latest technologies. Orlov will be in conversation with Utrecht’s deputy mayor Eelco Eerenberg. (A2/A22 at 1 pm).

Investors lunch

On Thursday, Holland Metropole partners are hosting an invitation only lunch for investors at the International Investors Lounge to discuss the opportunities to create value in the region via residential development.  

Then at 1 pm, attention turns to Digital Twins, PropTech, Data & Innovation – a discussion with a number of leading lights from the Holland Metropole at the International Investors Lounge (A1/132). 

For the full line-up, check the complete Expo Real conference programme.

Expo Real takes place from October 4-6 in Munich. You can find the Holland Metropole alliance at stand A2.130

Download our Expo Real edition of the <Holland Metropole brochure>

Property developers and investors should start looking at the Netherlands’ housing crisis from the perspective of the people looking for homes, housing minister Hugo de Jonge told visitors to the Provada real estate trade fair earlier this month.
“Everyone knows someone who is unable to find a place to live,” De Jonge said at the opening of the 19th edition of the Amsterdam-based fair, where he met developers and investors and discussed his target to build 900,000 new homes.
The real estate industry has been highly critical of some of the measures the minister has proposed to stimulate the development of more affordable housing, such as setting quotas for different types of property in new developments.

Ambition
The 900,000 figure has not been plucked out of thin air “by an over-ambitious minister” but is based on the real needs of a growing population, De Jonge said.
Despite industry criticism, the decision to extend rent controls and boost the supply of affordable housing will not be abandoned, he said, despite admitting earlier in the month that the sector is going through a dip as new construction slows.
Asked by one delegate if he had to choose between 900,000 new homes and extending rent controls to more properties, De Jonge said: “Not a good question. We have to do both.”

Subsidies
The government is also doing more to help people starting on the housing ladder to buy a home, by introducing starter subsidies and other measures, he said.
In addition, the person looking to buy a home is being disadvantaged by the endless legal procedures before building work starts and this too needs to be tackled, De Jonge said. The minister has already announced plans to slash the number of times locals can take legal action against a development.
“We have to work together,” the minister said. “Government and industry are not on opposite sides… and we are facing a gigantic task.”