Impact investing is increasing, but insufficient homes are built for growing group of elderly
Approximately 65% of the available capital is intended for impact investing. The focus here is particularly on affordable rental properties (mid-priced), sustainable projects and homes for specific target groups. Pension funds have approximately €8.3 billion (of the aforementioned €12.7 billion) available for this type of investments over the next three years. This is good news for the necessary addition of mid-range rental properties in the Netherlands. Investors surveyed indicate that the Affordable Rent Act should form the basis and that local regulations should be abolished to prevent an accumulation of regulations.
Notable in the current market is that the necessary investments in healthcare real estate and housing for the elderly are still lacking. The construction costs of life-long homes are often higher than those of regular homes. Investors are often not prepared to pay more for this type of housing, while demand is enormous and the rental risk is very small. Thijs Konijnendijk: “It would be great if investors, developers and the government focused more on adding life-long homes in construction plans. There could be an important role for municipalities here to include this important target group more often in preliminary agreements and not only focus on affordability, especially now that the feasibility of plans is under pressure.”
Insufficient opportunities for housing associations to achieve ambitions
In 2024, housing associations made a significant contribution to the production of affordable housing in the Netherlands and will continue to acquire new-build projects in 2025. In the survey, they indicate that they see many bottlenecks in achieving the ambition of 30,000 homes per year, including slow permit issuance, limited availability of building plots, lending options and tax burden. In addition, some are not given permission to sell old property, even though there is still a huge sustainability challenge, with 52% indicating that by selling they can free up resources for new-build and sustainability. Due to the enormous increase in vacant values, the sale of an old home, especially in urban areas, offers the opportunity to build back two social rental homes, with the buyers often also taking on the sustainability aspects.
Arjan Peerboom, CEO at Capital Value: “The available capital held by pension funds can provide an enormous boost to the construction of mid-priced rental properties in the Netherlands. We really need to take advantage of the momentum in the market now. This can be done by speeding up permit procedures, increasing government capacity and putting an end to accumulated regulations. The Minister is already making an important contribution to this with the ‘Removal of Conflicting or Redundant Requirements and Regulations’ programme [in Dutch: Schrappen Tegenstrijdige en Overbodige Eisen en Regelgeving (STOER)]. Tax improvements for private and international investors and the abolition of restrictive regulations for housing associations can also provide a significant impetus to building more affordable rental properties in the coming years.”
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