Flemish Housing Fund for Large Families A family dimension in social housing policy 1

2 Gezinsbond (league of families)

The principle of family modulation The principle of family modulation implies that a family's ability to cope financially is not only determined by household income, but also by the number of persons that must live from this income. 3

What does the Housing Fund?   Families who otherwise would never be able to own their own home, are given the opportunity via a unique loan system.   In 2009, more than two thousand five hundred modest-income families with children became owner of a house or were able to renovate that house via social loans from the Flemish Housing Fund. 4

Flemish housing Fund   Origin and evolution   Legal status   Mission: Social housing policy in Flanders   Family dimension and social dimension   Funding   Some statistics   Home improvement and rental assistance for those who cannot afford an own house   Political appreciation   The Gezinsbond supports the Housing Fund   Conclusion: recommend application of a family modulation scheme 5

Origin and evolution   Established in Belgium in 1929 by the Gezinsbond, which was then unitary   Regional structures in 1980 (competence in Flanders, Wallonia and Brussels)   Flemish housing fund for Large Families cvba established on 17/10/1980   Operational on 1 januari 1984   In 1999 families with at least 2 children. 6

Expanded to include all families with at least 2 children   In a Flemish government decree of 19 januari 1999, the Housing Fund target group was expanded to include all families with at least two children and a legally fixed maximum income. 7

Frans van Mechelen President of the Gezinsbond “Also in the third millennium, the Flemish Housing Fund for Large Families will continue to be indispensable for modest-income families with 2 and more dependent children”. (Editorial in “de Bond” of 11 December 1998) 8

Recent evolution: families with one child. The Flemish government decree of 9 December 2005 :   Expanded the target group to include all families with dependent children.   At the same time substantially increased the allowable maximum sale value of the homes. 9

Legal Status A private law company, namely a cooperative society with limited liability, subject to a number of legal requirements, (accounting, taxes and the responsibilities of the various policy bodies).   Certified by the government as social housing organisation subject to decrees that stipulate the activities the institution can develop with the financial resources allocated for this purpose in the Flemish Community budget. 10

Mission of the Housing Fund: Social housing policy in Flanders The Housing Fund is active in two sectors:   Core –business: the acquisition of social housing by families.   Also active in the rental sector with: home improvement and lease assistance activities. 11

The Housing Fund: Social housing policy in Flanders - Family dimension: the greatest support to the largest families. - Social dimension: the lowest incomes receive the most support. 12

Family dimension in social housing policy   Benefits of owning a home: - guarantee against poverty ; - possibility to adapt the dwelling to the number of children ; - benefits the sustainability of the living accommodations.   The family dimension is central to the housing issue 13

Family dimension via digressive interest rates   Lower in function of the number of dependent children.   An increase in the number of dependent children results in a (further) decrease in the interest rate.   When the number of dependent children decreases during the duration of the loan, no increase in the interest rate. 14

Social housing: Housing fund is aimed at families with children and a limited income   There is a limit to the: - family income - sale value of the homes 15

Limits to household income : Maximum income on 1 Januari 2009 : Number of children   1   2   3   4   5   6 Maximum income   49,260 EUR   52,340 EUR   55,420 EUR   58,500 EUR   61,580 EUR   64,660 EUR 16

Social dimension via digressive interest rates   The interest rates charged for borrowing families not only takes account of the number of dependent children,   The interest rates are also lower as the household income is lower.   Limits to the value of the house: higher in function of the number of children 17

Less than market interest rates   Varied between 1.5% and 4.17% in oktober   The loan duration, and thus also the monthly payments, are set according to the financial possibilities of the borrowers (10 years to maximum 25 years). 18

19 Interest rate and maximum income Number of child Annual rate Maximum income Maximum income Maximum income Maximum income Maximum income Maximum income 1.50% % % % % % % % % %

Revision of the interest rates every five years   One feature of loans from the Housing Fund is the revision of the interest rates every five years: the interest charged on all loans is revised every 5 years based on the evolution of the borrower's income.   Taking into account the average borrower's income for this five years. 20

Funding   In 2009, the Housing Fund issued loans to families for approximately 360 million Euro (or almost 540 million US$).   This amount can be borrowed by the Housing Fund itself on the financial market via bond loans that are guaranteed by the Region of Flanders. 21

Bond loans   The call for tenders to the banks for the bond loans is done according to the guidelines applicable to European tenders.   The terms of the bond loans are largely a function of the mortgage loans (this means: the amount in question is borrowed for a period of 15, 20 or 25 years).   Repayment of the principal starts immediately. Repayment by the Housing Fund to the banks is done based on annuities (= annual repayment of a part of the principal, plus the interest).   The contribution of the Flemish Region to the annuity amounts to 50%. 22

Some statistics: Number of loans Total amount234.8 Mio € Mio € Mio € Migrant families % % % North-Africa Families with Turkeys nationality

Home improvement and rental assistance   In 2008, there was an investment of more than 5.5 million euro The housing fund engaged in a number of social housing projects.   The property belonging to the Flemish Social Housing Fund amounted to 867 housing facilities. Work was completed on 739 of these. 24

Political appreciation : the Flemish Minister for Housing in Parliament   “If there is something we should be proud of, it is the social loans, including those of the Flemish Social Housing Fund. We have injected significant extra tax revenue in support of these”.   “We wish to make it possible for people with a modest income to realise their dream of home ownership. This has become difficult for a single-income family. Those with a reasonable fixed income who are forced to go it alone at a certain moment, are unable to receive a loan from any bank, unless the entire family acts as guarantor. And that is the best way to guarantee family quarrels…..” 25

The Gezinsbond is asking:   The application of a family modulation scheme in government support and services.   This could be applied at every policy level. 26

More information       (Wallonia)   (Brussels) 27