Vincent Gruis

Social Housing and Illegal State Aid: The Agreement between European Commission and Dutch Government

Abstract The size of the Dutch social housing sector, with a 32 per cent share of the housing stock, has prompted concerns over the ‘level playing field’ of competition between social and commercial housing providers. In 2007, this concern culminated in a complaint from the Dutch Association of Institutional Investors (IVBN) to the European Commission, with particular reference to the distorting effects of state aid to housing associations. In December 2009 the European Commission published its decision about the conditions for state aid to Dutch housing associations. The Commission agrees with the proposal of the Dutch government that housing associations allocate at least 90 per cent of their social rental dwellings to households with an income of less than EUR 33,000, if they want to remain eligible for state aid for these activities. Furthermore, housing associations may invest in real estate for public purposes. With its decision, the Commission ends a long period of uncertainty and contributes to creating a level playing field on the Dutch housing market. Nevertheless, the Commissions decision also hampers policies to increase tenure diversification and social mix in Dutch neighbourhoods.

Conceptualising Social Enterprise in Housing Organisations

Recent changes in the provision, funding and management of social housing in Europe have led to the emergence of new types of providers. While some of them can be portrayed with traditional ‘state’, ‘market’ or ‘civil society’ labels, many correspond to hybrid organisational forms, encompassing characteristics of all three in varying combinations. Nonetheless, evidence suggests that there is a ‘common thread’ linking these organisations together, namely their core missions and values, which can be classified using the term ‘social enterprise’. Despite the growing body of literature on social enterprise, this concept has been poorly defined and applied to the housing sector. This paper aims to address this gap through a critical literature review encompassing Europe and the United States. Existing models of social enterprise are reviewed and a classification system for social enterprise is developed to reflect the specific features of the social housing association sector and as framework for future research.

Strategic asset management in the social rented sector: Approaches of Dutch and English housing associations

In England and the Netherlands, in response to changes in housing policy and the market, there is widespread enthusiasm for asset management in the social rented sector. A key issue in both countries is the development of a strategic approach towards the formulation of asset management plans. The paper examines this issue in relation to the current practice of housing associations in both countries. Drawing on case studies in England and the Netherlands, it is concluded that in both countries practice varies widely between housing associations. Some of the approaches adopted by front-runners can be seen as models for other associations yet to develop a strategic approach towards asset management. Lessons can also be learnt across national boundaries, though necessarily mediated by differences between the two housing systems.

European Competition Policy and National Housing Policies: International Implications of the Dutch Case

This contribution explores the relationship between housing policy, which is the responsibility of national governments, and competition policy, including the decision on the legitimacy of state support, which is the responsibility of the European Commission (EC). The paper paints a general picture of EU policy on competition and state support and describes the Dutch social housing system. Attention then turns to the recent intervention by the European Commission in the governance of Dutch social housing and it is asked whether the factors that prompted the intervention exist in other EU member states as well. The analysis shows that this is indeed the case. It is concluded that the intervention of the EC in the Netherlands could become a precedent for other European countries, particularly for those countries that opt against a residualised social rented sector and for a competitive role of social housing providers on the housing market.

Government Regulation and Market Orientation in the Management of Social Housing Assets: Limitations and Opportunities for European and Australian Landlords

ABSTRACT In the past ten to 20 years, governments in various countries have introduced or reinforced market principles in their housing systems. As a consequence, social landlords should have increased opportunities to adopt a more market-oriented approach towards the management of their housing stock. Nevertheless, in many countries governments still have a substantial influence on the social rented housing sector. In this paper we analyse the influence of statutory regulations on the management of the social rented housing stock in four European countries and in Australia, in order to assess to what extent these regulations help or impede the development of a market-oriented asset management. It is concluded that the social landlords in most of the countries studied have some autonomy which enables a more market-oriented asset management. Nevertheless, the assumption that giving greater freedom to market forces and reducing government influence and support lead to a more market-oriented asset management by itself does not hold for all countries.

Portfolio Management in the Social Rented Sector: Valuation, Risk Analysis and Strategy Development

The financial aspects of social housing management are becoming more important for housing associations in Western Europe, due to changes in their economic and institutional context. As part of a trend towards the privatisation and decentralisation of public services, housing associations are becoming more self-reliant. Government financial support is decreasing and parts of the housing market are changing in response to low demand. To ensure that housing associations run an economic, efficient and financially sound business, knowledge of the financial performance of their stock is becoming more important for their investment policy. In the Netherlands, these general changes in housing policy, management and market have been a prominent feature of the last decade, and have resulted in a variety of responses under the general heading of asset and portfolio management. This paper describes methods for valuation, risk analysis and portfolio management for housing associations. The paper sets out the context within which Dutch housing associations operate. Existing methods for valuation and risk analysis are evaluated for their applicability to social landlords. These methods are placed within the business planning process to show how the methods can be used to inform asset management strategy. Finally the paper reflects on the implications for practice in social housing management.

Market orientation in social housing management

States that social housing has traditionally been provided through bureaucratic mechanisms, and as a consequence landlords have operated mainly in a task‐oriented way. Reports that many governments in Europe have transformed their housing systems to include or to reinforce market principles in the hope that this could lead to a more efficient social housing system. Argues that market orientation should be reinforced in the social rented sector. Concludes that in the methods from the private sector the emphasis naturally lies on financial performance, so social landlords must find ways to incorporate social returns in their decisions.

Asset management of social landlords based on value creation at neighbourhood level

Purpose – This paper aims to explore an approach in which asset management strategies of housing associations are largely determined at neighbourhood level and in which the development of the market value is one of the key criteria.Design/methodology/approach – The paper discusses the characteristics of the existing asset management models and their drawbacks. It describes area‐based policies, and it argues how the neighbourhood level can be incorporated in asset management and why this also helps to solve some of the drawbacks of the portfolio‐based models derived from strategic business planning. This approach is illustrated with the practice of housing association Stadgenoot.Findings – It is argued that asset management based on value creation at neighbourhood level has significant advantages above the “traditional” business planning approach and suggests some further directions for elaboration of this approach.Practical implications – This approach enables housing associations to improve their asset m...

The continued retreat of non-profit housing providers in the Netherlands

After the abolishment of object subsidies for housing construction and renovation in the mid 1990s, Dutch housing associations, the main non-profit housing providers in the country, heavily relied on market activities, such as selling homes to owner occupiers, to generate income for their social activities and to contribute to urban development policies. This worked well, which was one of the main reasons that these housing providers could adopt a wide field of operations, including not only the management and development of affordable housing for low-income groups, but also housing in other market segments, plus activities regarding care, welfare, local economy, employment and education. Recent economic and political developments, however, have caused housing associations to return on this path. Central in this paper is a research among Dutch housing associations about their values, strategic positioning and strategies. The research was executed in two waves (conducted in 2010/2011 and in 2013/2014, respectively), each consisting of a panel survey and interviews with selected panellists. This paper presents the results of the second wave. It is expected that after the first wave of the research, new regulations, such as the national implementation of European rules on state support and the introduction of a new property tax, have resulted in a further retreat from non-social housing activities. The analysis shows that this is indeed the case, but that the main shifts in priorities have not taken place directly after the credit crunch, but in later years.

How to determine the financial possibilities of Dutch housing associations

The mission of Dutch housing associations is to helpfulfil the social housing tasks in the Netherlandswithout endangering their financial continuity.Furthermore, any financial resources that they do notneed to secure their financial continuity must be usedin the interest of social housing. Therefore it isimportant to determine the financial scope ofhousing associations. Their financial possibilitiesare dictated largely by the value of their housingstock. The estimated value of the stock, and thereforeof the financial possibilities, is partly determinedby the method that is used to value the housing stock.This paper will focus on the relationship between thefinancial position of the housing associations and thevaluation of their housing stock.