1. Challenge the future Delft University of Technology The Dutch business model in social renting: 25 September 2014 – Brazil/EU Dialogue seminar, LSE, London Marietta Haffner OTB – Research for the Built Environment / TU Delft A historic perspective

2. 2 Social housing in the Netherlands | Dutch social rental sector – biggest Haffner et al. 2012 (diverse sources, most recent year)

3. 3 Dutch business model in social renting Structure 1.History -1990s in a nutshell 2.Revolving fund business model 3.Institutional landscape 4.Ingredients to remember

4. 4 Dutch business model in social renting From private initiative… … to “extension of government” Roots in 19th century civil society Providing housing for workers, not the most vulnerable State involvement: Housing Act of 1901 Government influence increased in the 20th century Social landlords transformed into semi-public institutions with strong financial and hierarchical ties with central government up until the 1980s … towards independence Decentralisation in the 1980s and 1990s 1995, cancellation of outstanding government loans to social landlords in exchange for future owed supply subsidies Financial independence and social entrepreneurship

5. 5 Dutch business model in social renting Towards financial independence Government loans: social renting Supply subsidies: renting Rent control: rental sector Government Guarantee: social renting Housing allowance: rental sector 1945- 1960 +++++ 60s++++ + 70s+++ ++ 80s+++++ 90s+++ 00s+++

6. 6 Dutch business model in social renting Towards social entrepreneurship Housing associations (HAs) are private registered organizations with a public task (legal status) that operate within central government framework operate in the interest of housing should re-invest in social housing any profits made (non-profit)

7. 7 Dutch business model in social renting Structure 1.History 2.Revolving fund business model 3.Institutional landscape 4.Ingredients to remember

8. 8 Dutch business model in social renting Rent income Housing sale revenues New affordable housing Community investments Revolving Fund Principle Housing refurbishment

9. 9 Dutch business model in social renting Asset management Sales About 15 000 sales per year in the period 2007-2010 Intermediate tenure Sector initiative Instrument to create mixed neighbourhoods Risk of deterioration is risk for housing association (HA) Sold dwellings remain tied to housing association HA guarantees to buy back the dwelling HA shares value gain/loss HA can then invest in deteriorated neighbourhood

10. 10 Dutch business model in social renting Structure 1.History 2.Revolving fund business model 3.Institutional landscape 4.Ingredients to remember

11. 11 Dutch business model in social renting Housing associations Government Local authorities Tenants Housing allowance Rents Banks Central Fund WSW Loans Guarantee Subsidy Performance agreements Regulation

12. 12 Dutch business model in social renting Social housing governance Tasks Supervision by ministry Performance agreements between housing associations and local authorities Self-regulation Governance code External performance assessments Tenant Participation Act

13. 13 Dutch business model in social renting Social housing finance Housing association Housing association Bank Social Housing Guarantee Fund (WSW) Social Housing Guarantee Fund (WSW) Guarantee by national and local governments Guarantee by national and local governments Triple A or AA+ credit rating Contribution Loan Central Housing Fund (CFV) Central Housing Fund (CFV)

14. 14 Dutch business model in social renting Bank loans Mainly provided by two government-related banks: 1. Bank Nederlandse Gemeente (BNG) 2. Nederlandse Waterschapsbank Not a closed financial circuit

15. 15 Dutch business model in social renting Central Housing Fund (CFV ) Government agency which supervises the financial viability of housing associations can order remedial actions from housing associations if they run into financial difficulties provides additional financial support to housing associations while they implement remedial actions

16. 16 Dutch business model in social renting WSW and its guaranty structure Primary security: Housing associations Secondary security: WSW Tertiary security: State and municipalities

17. 17 Dutch business model in social renting Structure 1.History 2.Revolving fund business model 3.Institutional landscape 4.Social renting ingredients to remember

18. 18 Dutch business model in social renting Social entrepreneurship – what went wrong? Loss societal support because of Sideline activities better financial position allowed for taking on more tasks Fraud and mismanagement (often in sidelines) Supervision not strong enough Self-regulation did not work Towards market rents Loss of social basis for the societal democratic ideal for a broad ‘social’ rental sector

19. 19 Dutch business model in social renting Social entrepreneurship – what may be worth remembering? Cooperation for achieving public task between state and non-profit organizations to realize Benefits created by revolving fund principle involving dwelling sale, dwelling management, new affordable housing, maintenance and refurbishment of affordable housing, community investments, including the neighborhood Realization of investment programs for energy efficiency Financial safety net created by guarantee structure Development of skills in social management and allocation

20. 20 Dutch business model in social renting Thank you!