Public-private partnerships are the key to unlocking investment and solve the housing shortage problem, experts agreed at Real Asset Media’s The Living Sector briefing, which took place last week at EXPO REAL in Munich.
All Dutch cities, including fast-growing high-tech towns like Eindhoven, are struggling to find a solution to the huge gap between supply and demand of housing. In fact, a strong economy makes the problem worse, as companies grow and investors come in which puts added pressure on housing and services.
“The lack of housing causes a problem in attracting inward investment”, said Jeroen Dijsselbloem, Mayor of Eindhoven. “The city is booming and so is the region, but demand for housing, schools and so on is also booming”.
A new public-private partnership being created, the very first of its kind in the Netherlands, could provide a solution for Eindhoven but also be a template that other Dutch cities can follow.
“It´s a very interesting experiment that is being driven by the private sector, setting up a fund with guarantees to encourage housing projects”, said Dijsselbloem. “Companies know they cannot grow if there are no homes for their workers or school places for their children. We can only realise our huge potential if we deliver those services, as well as good transport links”.
There is value in investing in more than bricks and mortar, he said: “The real value of property is decided by people, by the surroundings and by the way it is used”.
The role the private sector can play cannot be underestimated, said Pieter Akkerman, co-Head Real Estate Netherlands, Schroders Capital: “We need more cooperation between public and private, but it has to be institutional funds that invest for the long term. Housing is no place for private equity funds”.
However good a local project like the one in Eindhoven is, it cannot solve a bigger problem that is facing the Netherlands: investors turning away, as they are put off by political and regulatory uncertainty. Elections are looming after the recent collapse of the Government.
“It is a situation of high alert, as foreign investors are not looking at the country at all, the Dutch market is dead”, said Akkerman. “They are not willing to commit capital because there is such insecurity over future regulations. Investment in the residential sector are at their lowest for many years”.