a.s.r. real estate

Making an impact for affordable housing

The affordability of rental residential dwellings is under high pressure and is gaining a lot of attention from both the public and the government. The ASR Dutch Core Residential Fund (ASR DCRF) has a clear view and focus on this topic. In this article, after a short summary of the latest regulations from the Dutch government, we discuss our commitment to make an impact through the addition of affordable dwellings to the rental market.

Regulations by the Dutch government
On each third Tuesday of September, the Dutch government announces the main features of its policy for the upcoming year – for 2021 this includes specific regulations affecting the residential market. It was stressed out that investing in housing and construction is and will remain a top priority for the Netherlands. The main features of the current residential market policy can be summarised as:
• creating enough dwellings, through new build; and,
• promoting affordable housing, the right to an affordable home in a liveable neighbourhood.

While the second point explicitly focuses on affordable housing, the first also sets a target in this respect. The construction stimulus aims to accelerate the building of at least 70,000 dwellings, half of them in the affordable category.

The government targets to promote affordable housing, by focussing on specific target groups, tax measures, a healthy living environment and sustainability.

Background
The Dutch residential rental market is dominated by the publicly funded housing corporations, which own around 70 percent of all rental dwellings. The remaining 30 percent is non-regulated and owned by private individuals (25 percent) and institutional investors (5 percent). Parties in the non-regulated segment determine their own rental policies. The past couple of years have seen more and more government intervention in this non-regulated segment, as a result of pressure on the affordability of rental dwellings.
Institutional investors acknowledge the pressure on affordability and have marked this topic as a high priority.

Focus on affordability
ASR DCRF is one of the institutional parties with a clear view on the importance of affordable housing. The Fund has designated affordable housing in the non-regulated segment as one of its main strategic pillars. To make a significant impact, we focus on dwelling with rents between €737 (the statutory minimum in this segment) and €1250 a month. In this range we serve the middle-income tenant category, based on our allocation criteria and the definitions formulated by Statistics Netherlands.

Currently, more than 85 percent of our portfolio is marked as affordable. The Fund has also set measurable targets for the addition of affordable dwellings in the coming years. These will be carefully managed and monitored by the Fund Management Team.

Making an impact – case study 
Contributing effectively towards the creation of more affordable dwellings is about more than just fine words and targets. To demonstrate the efforts being made by ASR DCRF in this area, we put a spotlight on one of our most recent acquisitions.

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Laurierkwartier, Utrecht

In the first half of 2020, ASR DCRF acquired Laurierkwartier in Utrecht. This project consists of fifty apartments and forty-seven single-family homes. Sixty-nine of these dwellings will be rented out in the mid-price segment, with fixed rents and maximised annual indexation. These dwellings fall under ‘Actieplan Middenhuur’. With this plan the municipality of Utrecht and market parties, including a.s.r. real estate, are aiming to add substantial numbers of affordable dwellings to the local residential rental market.

The sixty-nine dwellings covered by ‘Actieplan Middenhuur’ must:
• be rented out in line with the plan for a term of twenty years;
• have fixed rents based on the size of the dwellings (between €854 and €1027); and,
• have a maximised annual rent indexation following completion of CPI +1 percent.

ASR DCRF is willing to comply with such requirements in order to make an impact and to truly contribute towards a more affordable rental residential market – while of course also taking into account the need to achieve a fair financial return.

For more information on the ASR Dutch Core Residential Fund, please contact Robbert van Dijk or Marsha Sinninghe.

Robbert van Dijk
fund director
ASR Dutch Core Residential Fund
M: +31 (0)6 21 29 43 63
E: robbert.van.dijk@asr.nl

Marsha Sinninghe
fund manager
ASR Dutch Core Residential Fund
M: +31 (0)6 10990835
E: marsha.sinninghe@asr.nl