Rethinking the development process of mid-segment rental housing in the Netherlands

Abstract

With a shortage of approximately 315,000 homes, 4% of the existing stock, the Netherlands continues to face a significant and growing shortage of housing. This shortage is a result of various factors that either directly or indirectly have effect on the housing market. Of which some of the key factors are demographic developments such as population growth and changing household compositions; economic developments such as rising house prices, construction costs and income developments (affordability); political developments in regard to rising sustainability goals and changing regulations. These factors have a direct effect on all segments of the housing market, causing a shortage within all and predominantly for affordable of mid-priced rental homes with an estimated demand for 60,000 – 200,000 such homes over the next ten years. This demand or pressure on the mid-segment rental sector is a direct result of the inaccessibility to owner-occupied and social housing sector. As the house prices increase and the waitlist for social homes get longer the mid-segment housing market faces high demand and in turn pressurising both market parties and municipalities. Although there are developments within this segment and both parties are striving to ease the pressure on the market the supply of such homes is slow. Hence this research aims to increase the supply of mid-segment rental homes and contribute towards reducing the housing shortage in the Netherlands by hypothesising that improving the existing development process and policies within the mid-segment rental housing market would in turn improve the supply. Which brings us to the goal of the research to recommend measures/changes, that municipalities and market parties, could possibly make to improve the supply off mid-segment rental homes in the Netherlands. Given the regional characteristics of the housing market, this research adopts a case study method to analyse the development process and policies within different market types. Implying that the cases are market types and the phenomenon being explored, the development process of mid-segment homes. Learning from professionals in practice with the assistance of semi-structured interviews to first understand the existing process and policies, the problems encountered by them in the past and then collating recommendations from these actors to as how the process could be improved. Synthesising the information collected from the field research with theoretical findings to arrive at conclusions and in turn trying to answer the main research question: How can the development process of mid-segment rental housing, in the Netherlands, be improved to meet the rising demand in this segment of the housing market? On completing the research, through the interviews conducted it was found that the various actors along the process face challenges predominantly in the planning phase and challenges that arise from each other hence creating a rather uncertain environment to act in. Thus, reluctance in taking initiative and the shortage of mid-segment homes, although through this research an attempt was made to answer the main question by concluding that in order to improve the delivery of mid-segment homes it would essential to establish a well determined process, seek alternative land development approaches, allowing flexibility during negotiations and regulations, improving actor relationships, and developing policies that would not only regulate this segment but also stimulate market actors to develop mid-segment homes. Following these conclusions and aligning to the goal recommendations were made to the actors involved at an organisational and project level. Of the made recommendations the ones that stand out would be of municipalities supporting one another, involved actors form consortiums to share development risks, development of policies at a national level and finally establishing a trustful, transparent, certain, and supportive environment for each other.