Context – Within the Netherlands, an urgent mismatch between supply and demand in the residential sector results in adverse effects such as high house prices and reduced affordability. This mismatch is anticipated to grow further due to an increasing number of households (between 300,000 and 1,000,000 until 2040) and the many barriers in the development process of inner city locations. The Dutch residential development sector stands for a great challenge.
Objective – The objective of this thesis is to explore the functioning and possibilities of revolving funds for inner city development. The hypothesis of the research is therefore that a revolving fund provides a solution towards overcoming (some of) the barriers in urban development, particularly in the inner city.
Methods – The research is divided in three components: literature review, empirical study through a comparative case study, and the translation from the case study towards a revolving fund design for residential development in inner city locations.
Results – The case study has established that there are six structural elements that characterize revolving funds: goal focus, goal limitation, size of the fund organisation, distance to the responsible governmental body, risk acceptance and steering ability. A variant study shows different possibilities of the design of a revolving fund with different characteristics in regard to the six structural elements.
Conclusion - In general, the results imply that the use of a revolving fund can stimulate certain residential development projects that experience financing issues. The study has also established that there is a support base for a revolving fund in inner city development, both from a public and private of view. A revolving fund for inner city development should have an equal focus on societal and financial yield (goal focus) and should have a medium goal limitation. In terms of organisation, the fund should have a rather small organisation in relation to the fund volume and should be sufficiently distanced from the responsible governmental body. Regarding the financial structure, the risk acceptance should be relatively high to carry out the predefined tasks of the revolving fund. This results in a revolving fund through which governmental objectives can be carried out with high steering ability.
Keywords: inner city development, revolving fund, planning instruments, comparative case study