Stimulating Filtering Processes

Evaluating the addition of an intermediate rental segment for middle income households

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After the global financial crisis in 2008, new developments in the Dutch housing market halted, causing a deficit of available dwellings in the owner-occupied housing market. This in turn has increased the demand for rental housing, resulting in shortages in both the regulated as well as the unregulated rental housing segments. These shortages are most noticeable for lower and middle income households. The lack of supply for low income households sparked societal debate concerning skewed tenants, resulting changes in national housing policy. However, these regulations caused a further decrease in housing options for the middle income households.
As a result, regional residential visions established by municipalities active in Dudok Wonen’s working area have since then had a strong focus on stimulating filtering processes: middle income households residing regulated rental dwellings should move, to make room for low-income households. To stimulate these filtering processes, housing association Dudok Wonen started to offer an intermediate rental segment (consisting out of ex-regulated rental dwellings) exclusively to middle income households, stating that the largest obstacle for the desired filtering processes is the lack of supply available to middle income households. Dudok Wonen assigned this intermediate rental segment ’50-50’ to starting and filtering middle income households. To examine the effect of this measure the following research question arose, to be answered in this thesis: ‘How do the intermediate rental segment and associated housing allocation procedures which Dudok Wonen offers contribute to the desired filtering processes in the municipalities Gooise Meren and Hilversum?’.
To answer this research question, the residential visions in Dudok Wonen’s working area have been reviewed, and literature concerning the topic of residential mobility has been consulted. The selected research methods can be described as a mixed methods research, and involved a quantitative analysis of the available rental segments Dudok Wonen’s working area, a structured web-survey distributed amongst and answered by 806 tenants in Dudok Wonen’s regulated rental segment dwellings and 9 semi-structured interviews conducted with tenants of dwellings offered in Dudok Wonen’s intermediate rental segment.
The quantitative analysis of rental segments was performed to examine whether the characteristics of intermediate rental segments intended for filtering households complied to the characteristics that Dudok Wonen had envisioned to trigger filtering. The intermediate rental segment dwellings were found to be larger than the regulated rental segment dwellings and to have a more beneficial price/quality ratio than unregulated rental segment dwellings, thereby complying to the goals set by Dudok Wonen. This research has also revealed that a majority of the middle income households residing in the regulated rental segment do desire to move, but that only a minority of these households is interested in the intermediate rental segment. The largest contributor to this lack of interest is the lack of knowledge concerning the segment, but the increase in price (compared to the regulated rental segment) and the lack of diversity in quality aspects in which the segment outranks the regulated rental segment are also culprits. The intermediate rental segment as offered by Dudok Wonen predominantly supplies moving triggers to households that are interested in larger dwellings. It is unlikely that households looking for other quality characteristics will be triggered to move by the addition of the intermediate rental segment.
Households that did move to the intermediate rental segment did so in order to have the option to realise (prospective) life-cycle related goals, like starting a family. Although these households were looking for rental dwellings, this preference is a substitute of their actual desire for owner-occupied housing. This substitution behaviour can be attributed to the contemporary housing market situation and regulations.
Despite this substitution behaviour, the intermediate rental segment, as it is currently being offered by Dudok Wonen, is contributing fairly well to stimulating the desired filtering processes in the municipalities Gooise Meren and Hilversum, as it supplies a portion of the middle income households residing in regulated rental dwellings with triggers to move. With the addition of the intermediate rental segment in the regional housing market, Dudok Wonen is stimulating the desired filtering processes not by pushing households to move, but by lowering the thresholds these households need to overcome in order to move. However, although the addition of the intermediate rental segment is beneficial for the desired filtering processes and the options middle income households have in the regional housing market, the associated housing allocation procedures negatively impact the supply available in the regulated rental segment. This report concludes by posing several recommendations for Dudok Wonen to consider, as well a point of critique towards contemporary Dutch housing policy.