The city is using ground-breaking solutions to mitigate housing shortages and continue growing.

Eindhoven, located in the south of the Netherlands, is a case study in rebirth after post-industrial decline.

When the city’s flagship company, the multinational conglomerate Philips, hit hard times in the 1990s, the fortunes of its home city suffered along with it. But Eindhoven reinvented itself as a modern hub for technology and innovation. Its thriving technology ecosystem has since attracted companies, and talent, in droves. There are now more than 6,000 tech companies located in the city.

Mayor Jeroen Dijsselbloem points out that Eindhoven has now been a “boom town” for at least two decades, and while the city is proud of its transformation and its tech prowess, success has brought its own challenges – in particular, a housing shortage that requires urgent attention.

‘Enormous demand for investments’

“Most of our companies are international and this is radically changing the town. Growth figures are very high, but that also creates an enormous demand for investments in real estate, services and amenities. That is the challenge we are facing,” says Dijsselbloem.

House prices in south-east Brabant, encompassing Eindhoven and surrounding municipalities, increased further in the third quarter of 2023, according to figures from NVM, the largest association of real estate agents and appraisers in the Netherlands. The average sales price in this region increased by 0.8% in one year to €452,000 per sale. The asking price increased considerably by 4.4%: an average of €562,000 per home.

The priority for Eindhoven, then, is to build more housing, especially affordable units. A large chunk of the city centre is being redeveloped to build roughly 20,000 houses between now and 2040. But the projected need over the next decade is for more than 60,000 new homes. This is to keep pace with a population that is estimated to increase from 220,000 in 2014 to 300,000 by 2030.

This creates a need, and sizeable opportunity, for residential investors.

“We are very advanced already in planning procedures and we are very interested in looking for investors – preferably investors committed to staying in our city and who will take on many projects and invest for the long term. And, given the economic development of the city, it is a really interesting place to invest right now,” Dijsselbloem says.

Supply and demand gap

It is a problem being faced across the Netherlands, as fast-growing cities struggle to find a solution to the huge gap between the supply of, and demand for, housing. One solution for Eindhoven could be a new public-private partnership that is being created, the first of its kind in the country, which could also be a template for other Dutch cities.

“It’s a very interesting experiment that is being driven by the private sector, setting up a fund with guarantees to encourage housing projects,” explains 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.

“We are looking for investors committed to staying in our city and who will take on many projects and invest for the long term.”

Jeroen Dijsselbloem, mayor of Eindhoven

“The fund is fully private and [the companies] are making it available for us, the local government, to realise big building projects at a much faster pace. That’s super interesting for the developers in Eindhoven because they can talk to the private sector and say ‘can you give us a guarantee on this project or can you provide us security on the first loss of that project?’ This helps us with the current insecurity in the markets and provides additional security so we can keep building,” says Dijsselbloem.

Leading the way is homegrown semiconductor giant ASML — the most highly valued European tech company, with a market capitalisation of approximately $280 billion — which is participating in the fund and is investing in housing projects designed with low- to middle-income workers, students and the elderly in mind.

Funding boost

In November 2023, Eindhoven received a funding boost of nearly €9 million from the national government to accelerate the development of 880 homes at sites near Eindhoven Central Station and the Philips Stadium.

The money comes from the Startimpuls, a government fund intended to prevent delays in housing projects, and will go towards four, mostly affordable, housing projects. Construction is scheduled to start in 2024 or 2025.

The role the private sector can play cannot be underestimated, however, said Pieter Akkerman,
co-head for real estate Netherlands at Schroders Capital, during a panel session on the living sector during Expo Real in Munich in October 2023. “We need more cooperation between public and private, but it has to be institutional funds that invest for the long term.”