Across Europe, cities are grappling with a pressing issue: how to accommodate population growth, lifestyle changes, and grow in a managed, sustainable way. A special panel session organised by the Holland Metropole alliance at the Expo Real real estate fair in Munich focused on the challenges and possible solutions.

There was almost total unanimity at the session on the first day of Expo Real that affordable housing is one of the very top priorities for European cities. However, opinions diverged when it came to whether the solutions already exist or need to be created and developed over the next five years. A significant number of participants expressed doubt that current systems are sufficient, arguing that new approaches must be developed if the problem is to be addressed.

At the heart of the discussion was the critical need for collaboration between government bodies and private investors, with neither side able to solve the problem alone. Public and private entities, panelists and delegates said, must align their interests and work together to develop innovative solutions.

Regulations

Gemma Kendall, head of multi-family homes investments at JLL argued that regulatory consistency is often more important to investors than the specifics of the regulations themselves. When rules change overnight, it becomes difficult for investors to plan long-term, which ultimately hampers the development of affordable housing. The panel agreed that consistent, long-term regulatory frameworks are essential for attracting and retaining investment in affordable housing.

Despite the complexities, there are encouraging examples of cities that have successfully aligned public and private interests to deliver affordable housing.

Jace Tyrell, CEO of Opportunity London, illustrated this point by presenting London’s approach to affordable housing. With a population approaching 10 million, London is under immense pressure to increase its housing supply. Tyrell highlighted a £5 billion housing fund proposal that would be shared by 10 to 15 pension funds. The aim is to deliver 20,000 discounted market rent homes across the city. This initiative demonstrates how the public sector can de-risk investments by fostering partnerships that provide attractive opportunities for private investors.

Eindhoven

In Eindhoven, the city has partnered with national government and private companies, securing over €4.5 billion in funding to support housing and infrastructure development. Deputy mayor Stijn Steenbakkers emphasised that Eindhoven’s success in addressing its housing challenges is due to private companies like ASML understanding their vested interest in ensuring that all workers, highly skilled professionals but also blue collar workers, can afford to live in the city.

In Madrid, the “Plan Vive” initiative has attracted international investment through a partnership between public authorities and private developers. A Japanese equity group, has collaborated with local entities to build affordable housing projects across the city, which were oversubscribed 13 times upon completion. Since its adoption in 2021, more than 4,500 affordable homes have been delivered or are underway. This demonstrates how, with the right incentives, public-private collaborations can meet housing demand while delivering returns for investors.

Investable products

The panellists also highlighted the importance of building investable products that meet the investors’ requirements. So far, the creation of international residential portfolios across Europe has been one tool for investors to diversify their portfolios but the differences in national regulatory environments are a barrier to greater investment.

To attract investment, cities need to focus on making their markets more accessible and investor-friendly. This includes streamlining planning processes and offering financial incentives, such as those available in Germany or in Spain. By reducing uncertainty and offering clear pathways for investment, cities can encourage private capital to flow into affordable housing projects.

The session also underscored that solving the affordable housing crisis requires more than just financial investment. Successful partnerships, like those seen in Eindhoven and Madrid, are built on trust, mutual understanding and shared goals. This trust is essential for projects that require significant upfront investment and long-term commitment, particularly when it comes to large-scale urban development.

Recommendations

Looking ahead, the conference participants offered several recommendations for addressing Europe’s affordable housing crisis.

1. Public authorities need to be proactive in creating conditions that attract investment, and in providing regulatory certainty.
2. At the same time, developers need to be open to new forms of collaboration that go beyond traditional development models and do not focus only on returns.
3. Expanding public-private partnerships and creating development corporations can help align the interests of all stakeholders and foster the trust necessary for successful housing projects.

Panelists: Stijn Steenbakkers, Jace Tyrell, Gemma Kendall, James Wythe (Aviva Investors), Michael Fink (Catella Investment Management)

Moderator: Tim Moonen

Report: Borane Gille and Greg Clark

Urban planning in the Netherlands must be focused on densification, based around sufficient amenities, good public transport and green streetscapes, Edward Schuurmans, partner at KCAP said in an interview ahead of the Expo Real property trade fair in Munich.

To build enough houses in a country where there is a shortfall of at least 400,000 homes, local authorities and developers must look to both adding to existing residential areas in cities and adding streets to smaller villages on a fitting scale. “You have to both densify and build new neighborhoods” Edward says. “We must begin with densifying our cities and that means having better infrastructure as well. If you look at trains, for example, we in the Netherlands are somewhat late, compared with some other parts of Europe.”

KCAP has, for example, been working together with Lelystad city council to draw up a vision for transforming the eastern part of the city centre, involving a linear park, reduced car use and 1,200 new housing units, including a landmark building that will be 18 storeys high. The Fellenoord project around Eindhoven’s main railway station involves transforming a mono-functional area, dominated by infrastructure and offices, into a lively and mixed, dense urban district.

Integrated design

A switch to more sustainable forms of mobility is a key part of KCAP’s focus, with area developments edging out cars and bringing in more green spaces. “Our expertise spans architecture, urban design, and landscape and in the award-winning Cruquius project, located in Amsterdam’s former eastern harbour area, we incorporated all three disciplines,” Edward says. “This enables us to create integrated environments, where people can live and work happily. We believe in a mix of functions.”

New build properties in the Netherlands are now built to the highest energy saving standards and bio-based and circular construction materials are becoming more popular as well. So are we now reaching an end in regulating what can be done to ensure housing is as sustainable as possible?

“Fifteen to 20 years ago it was all about energy use and now it has all been regulated,” Edward says. “Everyone knows how their buildings need to perform and you could say every new building[ES1]  is sustainable energy-wise. I expect the use of bio-based and recycled material will be regulated too within the coming five years.”

CO2 targets

He predicts the next big issue that will be used to set targets for sustainable construction may well be CO2. “And that means covering the lifespan of a building, not just the construction process,” he says. “It will be about more than energy use or the construction materials. The next step could be to integrate the actual footprint of a building during its lifespan.”

“In the end, sustainability is all about what the gain for end user is, rather than Excel sheets,” Edward says. “Sustainability is often reduced to quantities, to figures, but it is actually about creating comfortable spaces. It is really about creating the best possible environments for people to live and work in.”

The KCAP team will be part of the Holland Metropole stand A2.130 at Expo Real in Munich from October 7 to 9.

Illustration: Part of the Cruquius development in Amsterdam. Illustration: Aiste Takauskaite

“This really is the right time to step into the Netherlands as a foreign investor,” says Ronald Huikeshoven, managing director of area developer AM and new chairman of Dutch developers association NEPROM. “The government is ready, developers are ready and the councils are ready. Everyone is combining their strengths to focus on affordable, residential area development.”

The new government has adopted the previous administration’s target of building 900,000 affordable homes in the Netherlands and is ready to act to speed up the development process which is crucial, he says, to ensure enough housing is built.

Yet while it is still vital to build affordable houses and work to boost sustainability, the social impact of area development is also becoming increasingly important.

For example, he says, loneliness is one of the most important issues facing both youngsters and the elderly. “So if you can help combat that through a development that helps people meet each other and make new friends, and keep an eye on each other, then you are really having a positive impact. On top of affordability and sustainability, this is what we really need as a society.”

Combining these factors, he says, is particularly an issue in area developments in the Netherlands, partly because the country is compact and space is at a premium, and partly because of tradition. And this, he says is where the concept of public private partnerships really comes in. “You can’t do it alone,” he says. “You need each other to make these sort of projects a success, especially when there are so many different interests involved.”

Combining all these different needs is one reason why it can take years to complete residential projects in the Netherlands, which is why Ronald supports the development of a different way of planning.

Rather than draw up a plan for housing, then for the roads, the electricity supply and dealing potential hindrances such as a nearby factory, he supports a parallel planning process, where everything is done at the same time.

“To do this you need the cooperation of everyone involved and to ensure everyone is committed to drawing up the plan within a short space of time,” he says. “Then, as private and public partners, you are really a team, working together, rather than reacting to someone else’s plan for this or that.”

The procedures for protesting about plans also need reforming he says, so that the interests of people who need a house are also taken into account. “When you live in a city, you need to understand that cities change. They evolve,” he says. “And that means keeping the history alive. So you should not knock down everything. You need to keep the old buildings and find new uses for them and then combine the old and new.”

It is equally important to make sure there is space for shops and services, and even for up and coming artists who, Ronald says, bring life to new urban developments and make it interesting to live somewhere.  “Everybody likes it when there is an old building incorporated into a new project,” he says. “It provides a link with the past. I recently moved and where I live now, an old industrial building has been converted into a brewery and café. And when I come home from work and I see everyone sitting outside, then I really feel like I am coming home.”

Illustration: AM’s Eleven Square project is helping transform the area around the Arena stadium south east of Amsterdam.

Housing minister Hugo de Jonge has made a major concession to developers who are concerned his plans to extend rent controls to cover more residential property would hurt investments, by allowing them to add a 10% supplement to the rent for new build. 

The 10% top-up, aimed at encouraging developers and investors to build more new homes, was originally 5% and would have been restricted to 10 years. De Jonge has now changed his position, doubling the supplement and removing the time limit, after developers said the new rules would seriously impair their ability to invest in the pipeline. 

The supplement will cover all new build rental property on which work is started in the next two years. 

Concerns

Institutional investors organisation IVBN and developers association NEPROM said in a joint reaction to the revised plans that more needs to be done to make sure construction does not slow further. In particular, they say, the supplement should apply to property built after 2025, and they want the transfer tax on the sale of real estate to be cut from 10.4% to 6%.

“Institutional investors need to be able to count on having a trustworthy and attractive investment climate to be able to continue to invest in mid-market rentals,” said IVBN director Judith Norbart-ten Hoor. 

“Over the past five years, institutional investors have added some 9,000 rental units to the market, or some 15% of the total new build in the Netherlands. And we want to keep doing that. Ultimately, people looking for a home will benefit most from that.” 

Rent controls

Developers also remain concerned about the minister’s plans to increase the limit for rent controls in the Netherlands to property worth up to €1,100 a month in the Dutch “points” system, a way of calculating rents based on a score for size, value, quality and outside space. 

However, the point system itself is also being overhauled to give more weight to properties that are highly energy efficient, have gardens or balconies, and high-quality kitchens and bathrooms – which will also benefit newly build property, De Jonge said.  

Landlords had lobbied hard against the introduction of the new rules, arguing that they would lead to a wave of sales as it becomes less profitable for landlords to rent out property. 

Nevertheless, at the beginning of February, the Dutch land registry office Kadaster said that the number of rental properties in the Netherlands increased last year. In 2023, investors owned 9.4% of the country’s housing stock, compared with 9% in 2022 and 8.6% in 2021, the Kadaster figures show. The increase is largely down to investment in newly-built properties by large real estate investors.  

New homes
Developers completed some 73,000 new homes in the Netherlands last year, well below the government’s target of 100,000 and fewer than in 2022, according to national statistics agency CBS.

But this year the total number of completions will fall still further because fewer permits were handed out in 2021, the CBS said. It takes an average of two years from permit to completion.

According to research carried out on behalf of the home affairs ministry, plans have been drawn up to build 1,075,000 new homes in the Netherlands between 2022 and 2030 – in line with government targets.

MPs decided on Thursday to press ahead with the legislation, pending the formation of a new government. 

After months of decline, the market for newly-built homes in the Netherlands seems to be improving, with estate agents reporting 8% more sales in the final three months of last year. And compared with 2022 Q4, sales of new build properties are up 57%, according to figures from estate agents organisation NVM.

In total, contracts were signed for 19,150 new build properties last year, with the average price reaching €468,000 by the end of the year. 
Supply is also increasing, NVM figures show. In the final three months of the year, over 19,500 homes were on offer, a rise of 17% year on year and the highest total since early 2016. The average price of properties currently on the market is €506,000. 

Apartments accounted for 46% of the offer, with detached and semi-detached homes accounting for 22%. 

Dutch housing market pressure

“We welcome the increase in new build supply because it is reducing pressure on the market for older properties,” said Chris van Zantwijk, an estate agent and deputy chairman of the NVM’s housing group. 

“And we really need the increase to meet demand. But let us not blindly stare at homes for first-time buyers. We also need to realise homes for people moving up the property ladder or downsizing as seniors. And we are concerned about the new build pipeline.”

At the end of last year, it emerged that 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.

Rent control concerns

Meanwhile, Dutch developers organisation Neprom has said it is concerned about plans by Zuid-Holland province to only sanction new property developments if two-thirds of the homes are classed are “affordable” or cost less than €350,000, and one-third of the total is rent-controlled. 
This is a tougher line than the caretaker government has suggested (€390,000 and 27% rent-controlled) and will lead to fewer new homes being realised, Neprom says. 
“Of course, Neprom wants to try to ensure two-thirds of new homes are affordable, but it has to be possible financially,” the organisation said. “Increasing investments in energy-efficient housing, climate resilience, biodiversity, accessibility and so on have increased the costs of housing projects substantially.”

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.”

The Holland Metropole region is continuing to excel in terms of connectivity and infrastructure, according to the latest research by The Business of Cities.

Air passengers are a first visible sign of how special the region is and the three main Holland Metropole airports welcoming nearly 80 million passengers in 2018. This put the region ahead of Hong Kong and Singapore, and just behind the San Francisco region, the report said.

Passenger numbers have grown faster than in other regions with a year-on-year growth of just above 4% and, the researchers say, among regions of fewer than 10 million people, Holland Metropole may become the world’s leading aviation hub in the next decade.

The region is also an important cargo hub but, the researchers say, its super- connectedness stands out most of all in its internal connectivity. ‘Its polycentric character means the region offers the unique ability to connect multiple large cities directly by rail. Other regions, by contrast, have inherited a pattern of growth around a single centre which has reduced access to jobs and other key urban assets,’ the report said.

The region boasts an average travel time between the five centres of just over 50 minutes (second only to Greater Boston) and an average speed of around 85km/h (third only to Munich Metro and the London region).

Holland Metropole’s special connectivity is also reflected in the fact that it is the only region among its peers to provide direct rail travel between all its major centres, making living in Rotterdam, working in Amsterdam and going out to the theatre in Utrecht a realistic option.

At the same time, Holland Metropole’s digital infrastructure platform remains very strong by global standards. Having a strong digital infrastructure boosts digital workforce skills, internet usage and access to smart services, so it is unsurprising, the report notes, that Amsterdam, Rotterdam, Eindhoven and The Hague all recently ranked in the top 20 cities in Europe for the number of people working in jobs in the ‘app economy’.