Use Dutch pension fund investments for the housing shortage

In a recently published position paper, Bouwinvest makes an appeal: use institutional investors, such as Bouwinvest, as driving forces to increase housing. The Action Agenda for Housing and the 14 NOVI (The National Strategy on Spatial Planning and the Environment) planned construction areas can be used as solid foundations for future sustainable housing supply. Backed by pension funds, Dutch institutional investors are eager to contribute towards increasing the housing supply.

Institutional investors are a key factor

Addressing the chronic housing shortage requires the contruction of new buildings, particurlarly in the mid-market rental sector. Bouwinvest is calling on the new government to pursue a policy that will address the shortage, and that sees the participation of institutional investors as part of the solution. Institutional investors will make investment capital available to enable new construction projects in the 'build-to-rent' space. At present, institutional investors account for approximately 10 percent of all new housing constructions, mainly in the the middle- and free-sector rental segment. Without institutional investors, many new projects to ease the burden of housing shortages would not exist today. This distinguishes institutional investors from private investors, who often prefer to invest in existing supply.

The Action Agenda for Housing and the 14 NOVI areas as a starting point

In early 2021, 34 organisations drew up the Housing Action Agenda, a plan to build one million homes. Parties such as Aedes, the Dutch Housing Association, IVBN and NEPROM collaborated in this ambitious – yet feasible – housing programme. Looking to the future, the Dutch government can use this programme to influence future policy-making. The National Strategy on Spatial Planning and the Environment, known in the Netherlands as Nationale Omgevingsvisie (NOVI), serves as a further critical pillar for national government intervention and investment in areas of climate change, energy transitions, and adaptable housing in the Netherlands. The Ministry of the Interior and the Ministry of Infrastructure and Water Management have built upon the NOVI strategy by mapping out 14 large-scale housing construction areas. Approximately 600,000 homes are to be built in these areas. As far as Bouwinvest is concerned, we should start working on this as soon as possible.

Focus on mid-market rentals and seniors' housing

In the coalition agreement, the new cabinet correctly emphasises the construction of homes for seniors and middle-income households. Institutional investors are willing to commit to the housing market and make concessions, but only as long as they can make stable returns for pension payments. This requires consistent government policy. Bouwinvest advocates for moderate rent development, retaining the possibility of renting at market rents when sub-letting, and not expanding the points system used in the regulated rental sector to the private sector.

The need for housing for senior citizens with or without special care requirements will grow exponentially in the coming years. This is because there is a ‘double ageing’ population: people are getting older while the birth rate is declining, leading to higher median population age. The transfer of senior citizens to suitable allocated housing plays an important role in revitalising the housing market, a clear vision on senior housing policy and subsequent financing is essential.