Frans Schilder

How housing associations lose their value: the value gap in the Netherlands

Purpose – This paper aims to present a model that analyses the value gap, the difference between vacant possession value and tenanted investment value, for the houses of Dutch housing associations. The paper also aims to explore why the value gap is a structural phenomenon in The Netherlands and why it is an important factor contributing to the malfunctioning of the housing market. This gives an interesting expansion of the value gap theory.Design/methodology/approach – By using the well‐known concept of user costs and using market equilibrium as a reference, the model quantifies the influence of six factors that cause the value gap. This is done for The Netherlands in total and for each of the 452 housing associations separately.Findings – The value gap between the owner‐occupied and the rental sector is immense. This is especially the case with the rented houses owned by the housing associations, constituting one‐third of the total housing stock. The vacant possession value of these houses is on average...

The Economics of Style: Measuring the Price Effect of Neo-Traditional Architecture in Housing

Vintage effects have received considerable attention from economists in the context of house prices. Although strongly related, the impact of architectural building styles on prices has not been studied yet. Using a cross-sectional hedonic price analysis including building styles of recently developed homes in the Netherlands we find a significant price premium for housing with neo-traditional architecture. Extensive intervention by local authorities on the supply side of the housing market seems the most probable explanation of this effect. The decreasing price premium over time reflects the impact of supply restrictions on price, but also indicates that style does matter.

Losses on Dutch residential mortgage insurances

Purpose – This paper aims to study the data on losses on mortgage insurance in the Dutch housing market to find the key drivers of the probability of loss. In 2013, 25 per cent of all Dutch homeowners were “under water”: selling the property will not cover the outstanding mortgage debt. The double-trigger theory predicts that being under water is a necessary but not sufficient condition to predict mortgage default. A loss for the mortgage insurer is the result of a default where the proceedings of sale and the accumulated savings for postponed repayment of the principal associated to the loan are not sufficient to repay the loan. Design/methodology/approach – For this study, the authors use a data set on losses on mortgage insurance at a national aggregate level covering the period from 1976 to 2012. They apply a discrete time hazard model with calendar time- and duration-varying covariates to analyze the relationship between year of issue of the insurance, duration, equity, unfortunate events like unempl...

Rent increase strategies and distributive justice: the socio-spatial effects of rent control policy in Amsterdam

Rent controls and rent setting regulation in different contexts incorporate and balance different aims, in particular when securing affordability and the effective distribution of scarce housing by incorporating market mechanisms. As rent policy is frequently discussed in terms of affordability or market functioning in broad terms, small-scale distributive socio-spatial effects are often not regarded. In this paper, three strategies under the new rent sum policy are compared against the former policy and practice for Amsterdam, the Netherlands, to observe the effects of distributive justice. The new rent policy partly decentralizes rent increase decisions from the national level to local authorities and housing associations. Using microdata on all social housing units and their tenants’ distributive justice, outcomes under the former policy and practice are observed for a 6-year period (2008–2014) and the effects of three different rent increase strategies under the new rent sum policy are forecasted for the same period, combining an ex ante and an ex post evaluation. The possibilities for housing associations to vary rent increases for different groups of tenants in order to improve distributive justice outcomes are explored. Results show that all three possible strategies decrease the observed affordability gap between new and long-term tenants. Valuing the distributions of these strategies by applying two different standards for distributive justice shows the rent sum policy may only result in modest improvements.

How healthy and sustainable is the Dutch housing mix? Measuring and comparing the theoretical housing market balance of Dutch regional housing markets

Housing and its distribution over groups of households dominates debates on urban socio-spatial justice. Amsterdam even received the label ‘Just City’ as the large stock of social housing in the core of the city is said to increase societal equity. Within the Netherlands, however, the Greater Amsterdam housing market is perceived to be the most dysfunctional. As the discussion is fed by highly political and ideological perspectives, it is difficult to assess at face value how balanced the housing mix of a housing market is and to what extent it meets the community’s needs. Consequently, it is difficult to inform politicians about strategies that contribute to a healthy and sustainable housing mix and address the lack of affordable housing which is high on urban policy agendas worldwide. In an attempt to go beyond ideological and political discussions, the aim of this interdisciplinary paper is to develop a metric to measure and compare the theoretical balance of housing markets across regions and across groups of households based on income. The metric will be applied to the case of the Netherlands. The findings of the theoretical model show that large-scale provisions for low-income households may not always result in an improved housing market balance.