|dc.description.abstract||Middle-income households struggle to find affordable housing in Amsterdam due to urbanisation and a growing economy. Despite the growing need for housing, construction in Amsterdam fails to meet contemporary demand and provide affordable housing for middle-income households. Due to urbanisation and a shortage of supply, prices of owner-occupied housing and rents of private rental housing grew to excessive levels, which are too expensive for middle-income households. Additionally, the social rental sector of the Netherlands is restricted to lower income levels. To prevent the exclusion of this income group, the municipality of Amsterdam conducts a combination of inclusionary housing and rent control regulations. However, developers and institutional investors critique the regulations. According to these market parties, the regulations obstruct their abilities to sufficiently meet the shared objective of solving the shortage of private midrental housing. This research aims to explore how institutional investors, developers and the municipality of Amsterdam can efficiently implement these regulations by the following research question:
How can institutional investors and the municipality of Amsterdam efficiently implement midrental housing regulations through housing development processes of institutional investors in Amsterdam?
This research conducted a document analysis and semi-structured interviews at institutional investors, developers and the municipality of Amsterdam. By executing a single case-study, this research aims to exemplify theory and give practical recommendations.
This thesis argues that economic viability and the capacity of the municipality to implement the rules are essential for the regulations to succeed. The municipality of Amsterdam applied a collaborative approach in drafting the regulations to prevent a fallback in housing production. By consulting and addressing the resources of institutional investors and developers, the regulations aim to take financial interests into account. Additionally, the municipality of Amsterdam holds a significant steering capacity over housing developments by a tender approach for plot developments and the land lease system. Therefore, the municipality is able to obligate housing constructions to comply with their objectives before and after a property is built.
Despite the agreement, the obligations reduce potential revenues of institutional investors and developers. To overcome this effect, market parties lower construction costs by reducing the quality of midrental dwellings. Nevertheless, due to high initial costs and the accumulation of other prescribed conditions, the financial risk in housing development projects increased. Consequently, institutional investors with low-risk commitments are predominantly outcompeted by higher-risk investor groups.
To prevent the discouragement of institutional investors, the municipality can lower building costs by adjusting land values and apply a more ‘area-based approach’ of the ’40-40-20 rule’. Moreover, institutional investors can invest in existing properties and after that, initiate a property transformation to reduce competition. To conclude, this research suggests that a more extensive land capacity and a more managerial role of the municipality in area developments holds the promise to reduce competition and lower development risks. Additionally, these actions of the municipality can overcome the reliance on economic cycles and efficiently execute the objectives of midrental housing regulations.||