A healthy business
Stadgenoot has survived the financial crisis and things look promising. The year 2015 was closed with a big plus sign. We can pay off debts and further reinforce our position. That is necessary, as new homes must be built. The city is growing and the share of social housing must increase proportionately.
Beyond the crisis
In 2015, we left the housing market crisis behind us. Selling prices on the market have even risen explosively, leading to a big increase in construction. Construction started on almost 9,000 houses, which is more than ever before in Amsterdam. Investment came mainly from private parties, and housing associations lagged behind. Their relatively weak financial position and strict regulations meant they had to keep a tight control on the purse strings. The recovery of the housing market was therefore not yet apparent in the social housing sector, although the number of people moving house did increase slightly for the first time in years.
In 2015, we drew up a new business plan for the period up to 2020, entitled ‘Affordable Housing in a Metropolis’, in which we aimed to set out the specific task of housing associations in Amsterdam. The diversity of Amsterdam’s population, economy and culture and the city’s attractiveness to international companies and visitors justify our reference to a metropolis. Despite the housing market crisis, people kept coming to Amsterdam. The city acted like a sponge, and proved capable of accommodating far more people than expected. Young adults shared housing and children continued to live at home for longer. Now that confidence in the housing market has returned, the latent demand for accommodation is becoming apparent again. House prices are soaring and the pressure on the social rental sector is growing. Housing associations rent out their social housing in Amsterdam for an average of under € 500 a month, which is way below market prices. Demand for this housing is therefore practically infinite. Starters now have to wait almost ten years on average before it is their turn.
Balance between renting and buying
In our business plan, we opt for a plentiful supply of affordable social housing, in all parts of the city. For years, we aimed to bring more differentiation to the Amsterdam housing market. This meant less rented accommodation and more home ownership. The balance has now almost been achieved, and an agreement has been made with the City of Amsterdam that the housing associations in the city will retain at least 162,000 affordable social rented properties (up to € 710). Stadgenoot’s share in this is 26,500 properties. This is not based on an exact, scientifically determined number, but rather on a political and social decision. Together, we think that at least 40% of the housing supply should be included in the core supply. As the city is growing, the social housing sector must also grow after 2020. That is a deviation in the trend. For the first time since the 1990s, a net amount of social housing will be added to the city.
Affordability and quality
In 2013 and 2014, rents were increased substantially, in order to be able to pay the landlord tax. In 2015, Stadgenoot chose for a more moderate rent increase, particularly for households with modest incomes. Proportionately more affordable housing became available and we had fewer evictions on the basis of arrears of rent. The number of rent tribunal cases also fell, as did the number of nuisance cases. In 2015, nearly all our residential properties met the basic quality standard. Over 95% now meet the minimum requirements that we set for our housing supply.
Newcomers and vulnerable groups
We choose for growth in the core supply of social housing because the city of Amsterdam must remain accessible for households on modest incomes: youngsters who settle here and are not yet earning high wages, older people who have to make ends meet with less money, and refugees looking for a safe haven to build a new life here. Housing associations house newcomers, vulnerable groups and a multicultural community. These associations are essential to a city that aims to be in balance.
Stadgenoot in balance
We need to finance the acquisition of property and the construction of new housing from our operation. This means spending less than we receive and not eating further into the housing we own. We have almost achieved that balance. In recent years, we sold off development positions and business real estate, as well as housing. The proceeds were used for paying off debts and continuing to invest in the restructuring of the Amsterdam districts Nieuw-West, Noord and Zuidoost. At the same time, we reduced our operating expenses in the long term by slimming down the organisation. In 2012, we set the goal of getting the fundamentals in order on three fronts. Our financial position and the service to our tenants had to improve. And the organisational expenses had to be reduced. The figures for 2015 show that we have made great strides. We are in a good financial position again, despite the increased burden due to the landlord tax. Across the board, we see improved performance regarding our role as landlord. And we have been able to deliver this performance despite slimming down our company. Stadgenoot has improved performance with fewer people.
The new Housing Act that came into force on 1 July 2015 provided clear definitions for the sphere of activity of housing associations. Our core task is to provide affordable rented accommodation (up to € 710) for households on modest incomes (up to € 34,000 – € 39,000). Stadgenoot believes that it is a justified decision not to reduce the core supply further, but to even increase it slightly, in line with the development of the city. This accommodation, however, must be occupied by the people for whom it is intended – not only at the time of allocation, but also afterwards. The introduction of the Five-Year Contract (a Stadgenoot initiative) provides a solution in this respect. The tool received support from the Dutch Parliament, with a majority vote from both the upper and lower chambers in favour of the bill put forward by the ChristenUnie party. We want to rent out a substantial part of our housing in Amsterdam on such a contract. The first Five-Year Contracts were signed in mid-2016.
Scope for investment
The big influx of status holders in the latter months of 2015 has trained the spotlight on the huge demand for affordable rented accommodation in Amsterdam. Along with the City of Amsterdam and fellow associations, we are investigating the possibilities of accelerating the provision of additional housing to status holders and to other starters. The city council has offered several locations and premises for the realisation of permanent and temporary housing. Within our own portfolio, too, we want to accelerate the development of our plans. Following years of applying the brakes, there is once again financial scope for investment: in housing for starters and in affordable good accommodation for sitting tenants. We continue to fulfil our ambition of being a ‘stadgenoot’ (a fellow townsman) to those in need of a helping hand for living in this wonderful metropolis.
Amsterdam, January 2016
Marien de Langen
Board of Stadgenoot