Challenge the future Delft University of Technology Social enterprise and hybridity in housing organisations in Europe: a response to financial and regulatory challenges? Plenary 2: International perspectives on social enterprise and hybridity in housing organisations. Darinka CZISCHKE, in collaboration with Prof. Vincent GRUIS Dept of Real Estate & Housing, Faculty of Architecture, Delft University of Technology (the Netherlands) ENHR conference 2011, Toulouse, France

2 Titel van de presentatie The concept of social enterprise “…a business with primarily social objectives whose surpluses are principally re- invested for that purpose in the business or the community, rather than being driven by the need to maximise profits for shareholders or owners” (DTI 2002) “…nor-for-profit private organisations providing goods or services directly related to their explicit aim to benefit the community…” (Defourny et al 2008) “…organisations that have been designed as private enterprises, operating in a market situation, that at the same time employ their means to fulfill a societal objective that is interwoven with (or parallel to) the common interests, that produces goods and services and that uses its profit entirely for the realisation of its societal objective.” (NTMO 2003) Wide variety of definitions:

3 Titel van de presentatie Social enterprises: Source: Brandsen et al. (2005), based on Zijderveld (1999) and Pestoff (1992). Between the State, Market and Society

4 Titel van de presentatie Social enterprises: Inherent hybrid nature The Conceptual Classification Framework – The Social Economic Continuum for NI and NW ROI (Crossan, 2009)

5 Titel van de presentatie ‘Public’ providers ‘Private’ providers L.A.Public law bodies Private law entities (civil or business), non profitCoopFor- profit AssocCoopCompanies/societiesOther Public ownersPrivate or mixed owners AT***** BE*** DE** DK*** ES** FI**** FR*** IE*** IT**** NL*Found PT**NGOs* UK****** Source: Czischke, based on Bauer (2011) Types of social housing providers in the EU

6 Titel van de presentatie Towards a typology of social enterprise in social housing in the EU Differences: Legal status Organisational forms Size, structure History Commonalities: Mission (social, not profit maximising) Continuity (permanent character) Long term strategic plan Stated values Defined target groups Legally ‘approved’ or self-defined social (housing) mission. The social enterprise model?

7 Titel van de presentatie Adaptative strategies to different institutional contexts and logics Organisational archetypes in the social housing sector (Gruis 2008)

8 Titel van de presentatie  How are housing organisations in different settings responding to current contextual developments? Two cases: The Netherlands England

9 Titel van de presentatie The Netherlands Housing associations under increasing financial pressure from governmental taxes, reduced income from sales and tighter conditions for finance. EU / Dutch government ruling: Split between ‘social’ activities which may be funded with state aid and ‘commercial’ activities which may be not.  Impact on financial architecture (and on funding levels?) Narrower target groups: income ceilings  Impact on tenants’ profiles, sustainable communities, affordability?

10 Titel van de presentatie Responses by Dutch housing associations: 1. Narrowing scope of activities Average balance of pairs and possible priorities in 2007 & 2010 (Gruis 2008)

11 Titel van de presentatie Responses by Dutch housing associations: 2. Reducing demolition & development activities, increasing refurbishment of existing stock Source: Central Housing Fund (2011)

12 Titel van de presentatie Responses by Dutch housing associations: 3. From a transition to ‘social innovators’ to ‘social housing investors’ Source: Central Housing Fund (2011)

13 Titel van de presentatie Responses by Dutch Housing associations: 4. However - keep active role in society Aim to maintain a wide network and cooperation with societal partner organisations to stay active in broader societal interests. Regional specificities play pivotal role on housing association’s continuous role as social enterprises in the communities where they operate.

14 Titel van de presentatie England Major changes to social housing policy and regulation coupled to wide-ranging welfare reform creating a new environment for housing associations: Reduction in capital grants Possibility for social landlords to charge higher social rents to new tenants (up to 80% market rents) Housing benefit significantly cut Localism bill, ‘big society’ discourse: emphasis on the role of third sector actors in service delivery Government pledges 150,000 new social units in four-year term.  Challenges and opportunities

15 Titel van de presentatie Responses from English housing associations: Less capital funding => more debt => higher risk Financial strength and business strategy of each company determining new development levels Most going for considerable lower development levels (caution) Concerns about affordability (insider – outsider dilemma)

16 Titel van de presentatie Responses from English housing associations: Shifting position between the State, Market and Society?

17 Titel van de presentatie Conclusion Social enterprises in housing significantly influenced by current financial and regulatory constraints. However, in line with their social mission and their hybrid nature, still aiming to counterbalance these pressures with staying active in wider societal interests as much as possible. Factors determining different responses (State, market or community orientations) include: financial strength, regional context (housing markets), leadership, consistency of core mission…

18 Titel van de presentatie Question for debate Under current economic circumstances and liberal policy contexts that emphasise self-dependency at lower scale levels, should governments restrict social enterprises or promote their development as a way to fill the ‘welfare gap’?