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ABSTRACT
After being introduced in the US in the 1970s, inclusionary housing is now found around the world. Even the Netherlands, which is known for its tradition of public land and housing provision, has adopted it. The aim of this paper is to trace how this change occurred by applying a theory of institutional change. This theory regards institutional change as a two-stage event. Critical junctures for institutional change are preceded by a critical moment in which hegemonic discourses and institutional paths are being challenged by external developments, internal institutional reflection, or a combination of both. In this paper, it is argued that active land provision by Dutch local authorities was challenged by changes in the land market and the dynamics in the social housing sector. These changes led to a critical moment in which public land policy came under pressure, creating a window for new institutional arrangements to be examined. Successful lobbying by housing associations during discussions on the new spatial planning act led to the introduction of inclusionary housing in statutory law. The paper concludes by arguing that the introduction of inclusionary housing does not constitute a break with the Dutch tradition of public provision of land, but is rather a modification of it.
Notes
1. In the Netherlands, the word social is used instead of affordable and will therefore be used throughout the paper. Social-rented housing and the housing stock of housing associations are referred to interchangeably, even though this is not very precise. In the Netherlands, a house is regarded as “social” when it has a rent below €631 per month (price level of 2008), which is the maximum rent at which a household may apply for rent subsidy. These units can be provided by anyone, not only housing associations. Of the total housing stock in the Netherlands 44% is rented housing: 33% owned by housing associations and 11% owned by private persons or institutional investors. Of the 33%, at least 94% is below the rent boundary of €631, while of the 11% owned by private actors it is estimated that 80% is above that boundary. So there is a large overlap between the stock of housing associations and the social-rented housing stock.
2. It must be noted that Ball (1998) criticises Healey and Barrett (1990) for the way they deal with the duality of structure. However, his critique is wrongly based on a conflation of organizations (institutes) and institutions, and therefore of actors and institutions. Organizations consist of institutions (rules) that guide interaction within them, but most research that looks at the duality of structure is concerned with the institutions that structure interaction between organizations, in their role as actors. In addition, Ball presents structure and agency as a dichotomy, although the core of the theory is that both are strongly interrelated and inseparable.
3. Until the mid-1990s there were also municipal housing companies that provided social housing. But nearly of all them became housing associations, or were taken over by them.
4. The intention behind cost recovery is different from that of value capturing. However, to be able to recover costs, there must be a value (profit) that can be captured.
5. This was before the financial crisis that started in late 2008 and the subsequent crisis in property markets. These made owning and developing land a financial burden.
6. Other factors behind the pressure on active land policy can be indentified, such as the shift from urban extension to urban regeneration and the emergence of European state-aid and public procurement regulations in recent years (Buitelaar 2010), but given the timing of the law-making process towards the planning act in 2008, these can only have had a marginal effect on the introduction of inclusionary housing.
7. Note that the housing association is not entirely free to determine the rent. There is system of rules (Woningwaarderingsstelsel) that prescribes what can be asked maximally for a particular unit.
8. But compared to other actors there are still some privileges for housing associations (Conijn 2005).
9. This tax was abolished on 1 January 2003. This explains the peak in both lines in Figure 2 around 2002. Anticipating this fiscal change, housing associations decided to buy more land for which paying transaction taxes was still exempt.
10. There are no (reliable) nationwide data on land prices.
11. Here we used the average building costs of owner-occupied housing (source: CBS) and the average price of all houses sold (source: NVM). It should be realized however that the resulting estimate of land values is only an indication. Prices in new construction tend to be higher than prices in the stock and the composition of new construction will differ from the composition of the housing stock.
12. Often only corrected for inflation.
13. This is a quote from the Daily Cleveland Herald (29 March 1869). Similar quotes have been attributed to Otto von Bismarck.
14. There is a third category, and this regards the designation of land for individually commissioned housing (particulier opdrachtgeverschap), but this one is beyond the scope of this research, since this category has little or nothing to do with the issue of affordability.
15. The primary function of a development plan (exploitatieplan) is to recover the costs that local authorities make to facilitate the development.
16. Around 90% of housing in the Netherlands is built by property developers or housing associations. Very few private households build their own home or commission its construction themselves.
17. Section 106 refers to section 106 of the Town and Country Planning Act 1990.