A loan fund of €50m (£45m) created by Amsterdam’s city council will be used to support the development of housing co-ops.
The council is also allocating land plots under an indefinite lease for 15 to 20 housing co-operative projects. The move is part of the municipality’s efforts to help provide more affordable housing for the city’s residents.
Commercial banks provide mortgage loans up to 70% of the total investment or property value, but funding can be hard to access for start-up housing co-ops. Therefore, the municipality has set up the loan fund to enable them to borrow money from it, in addition to securing financing from banks and adding their own contribution. The loan is to be repaid in 10 to 15 years.
Deputy mayor Alderman Ivens, who is responsible for housing, construction, and public space, says model can help to provide a solution to the city’s affordable housing problem.
He said: “Amsterdam has a great shortage of affordable housing. Tenants have skyrocketing rents or are on a waiting list for years. The great thing about residential co-operatives is that groups of tenants themselves will design, build and manage their living and living spaces in new buildings.
“They then individually rent a house from the co-operative. This gives them full control over their home, without interference from large real estate parties. In addition, the homes are also retained in the long term for low and middle incomes because they cannot be sold or liberalised.”
The co-ops will be responsible for the building process and members will be able to have their input in the design of the buildings. The model is based on housing co-ops developed in Switzerland and Germany. Local authorities across Switzerland work closely with housing co-ops through public-co-operative partnerships, which enable the municipalities to provide land to the housing co-operative in the form of a “right to use”.
The limited equity housing co-operatives, which will offer below-market buy-in, will be available to people with low or moderate incomes. Restrictions on resale will also ensure that the units remain an affordable option for those on low and medium incomes.
Rent per unit will be between €600 and €1,010 (£540-£910), lower than for private dwellings between 40-70 sq m, which can cost between €1,100 and €2,200 (£910- £1,980) excluding service fees.
The co-ops will also provide collective services such as green energy car sharing, childcare and healthcare.
Mr Ivens added: “The fact that the municipality will be co-financing housing construction itself is a major change of course. In this way, just as in the past when a municipal housing company existed, the municipality takes an active role in the creation of affordable housing, whereby the future residents themselves determine what their residential complex looks like.
“Moreover, because it is separate from the traditional real estate companies and project developers, this form of housing can keep house construction going, especially in these economically uncertain times.”
Clemens Mol, housing co-op programme manager at !WOON, a foundation which advises inhabitants of Amsterdam how to start a housing co-op, says the idea of housing co-ops has only recently been explored in the Netherlands.
“There are a great number of social housing providers but tenants do not have many opportunities to plan and manage their own dwellings,” he said.
The council estimates that 7,000 co-operative housing dwellings could be developed by 2030.