Affordable housing; Reality or utopia in 21st century Rotterdam?

INTRODUCTION 

Following a request from the Ministry of the Interior and Kingdom Relations and the National Programme Rotterdam South (NPRZ), some major market actors will contribute to the comprehensive rehabilitation of the housing stock in Rotterdam South (Verbeek, 2017). Data from Rotterdam Partners showed that international investments in Rotterdam are rising considerably. In the words of former economy alderman Maarten Struijvenberg: 'Rotterdam is now translating its improved image into economic output' (Vastgoedmarkt, 2017). This illustrates how today's large cities are subject to extensive changes in capital formation and mobilisation. 

According to Short (2017), the financialisation of economy and society is emerging. Competitive industrial capitalism is replaced by the new financial capitalism, which always seems to look for state intervention to maintain its wealth and privileges. The power of capital now has a guiding role in shaping economic and political discourses.  

This emerging financialisation is visible in the contemporary city, a place with many investment opportunities for the financial sector. Increasing international competition of cities creates greater dependence on investments in the local economy. As a result, new organisational forms are emerging, such as public-private partnerships. Cities are also increasingly using city marketing to make their city more attractive to investors to gain competitive advantages (McCarthy, 1998). However, investors are looking to revalue or develop low-value land and property to transform it to a high value. This can cause the displacement of low-income residents. Through these significant investments, cities are, in a sense, 'marketed' and divided. It is no longer social needs that drive the city but market demand (Short, 2018).  

The government takes on the role of facilitator in this process, particularly of private capital on the free market (Squires, 1991). This privatisation policy involves financial incentives for private economic actors to attract investment, which ultimately must serve both private and public interests. This is often justified by the assumption that a revitalised economy or city centre will lead to regeneration throughout the city. If more jobs are created, and space is used more intensively, residents will spend more money. 

This idea is also reflected in the Woonvisie Rotterdam, which the Rotterdam City Council adopted at the end of 2016. The vision sets out the agenda for 2020 and the course to 2030 (Gemeente Rotterdam, 2016). The main objectives are: increasing the variety of housing, improving housing quality, making housing more energy-efficient and building more medium and expensive housing. An underlying motivation is that the number of cheap rental properties in Rotterdam would exceed the size of the target group for these properties. According to the municipality, the realisation of these objectives will create many extra jobs, and a 'socio-economically healthy mix of residents' can be achieved (p. 21).  

In line with globalisation and financialisation, the Woonvisie seems to have a primarily economic motivation and is therefore too much focused on the market and not enough on the protection of the housing rights of city dwellers. For this reason, the statement of this paper reads: the City of Rotterdam should take a more guiding and transparent approach to facilitate affordable housing. In addition to serving economic interests, it should actively protect and facilitate the housing rights of all citizens.  

In this paper, evidence for this proposition is provided by analysing newspaper articles and documents from the municipality and housing corporations. In the final section, some strategies for policymakers and citizens are highlighted. A number of fundamental issues must be clarified in the Woonvisie. These are set out in the conclusion where lessons are, among other things, drawn from the past. 

ARGUMENTATION

Before further elaborating on the statement mentioned above, let us consider the meaning of affordable housing. For when is a home affordable? Moreover, is there indeed an increasing demand for more expensive homes? According to alderman Bas Kurvers, 69% of all housing in Rotterdam is affordable with an income of up to €38,000 (Staalduine, 2019). In this calculation, 40% of affordable homes are owned by social housing corporations, 16.5% are private rentals, 12% are owner-occupied homes, and a small percentage of other homes such as business premises (Ten Teije, 2020). The owner-occupied homes that the alderman designates as affordable used to have a price up to €140,000. This limit has risen to €220,000, and in a letter to the city council, Kurvers even mentions an increase to €240,000 (Staalduine, 2019b). A few remarks can be made about Kurvers' method.  

First of all, his proposed increases are based on a rise in housing prices. In other words, he does not reason based on an increase in income. The incomes of residents can be used to calculate how affordable a house would be, so the alderman's method has little to do with affordability. In addition, houses with this price would be affordable for people with an income of up to approximately €38,000. This would mean a net monthly burden of €720. Newspaper Trouw checked this with a mortgage adviser, and it turned out that with this income, one can at best get a mortgage of €178,000 (Woonbond, 2020). Professor Peter Boelhouwer of the Delft University of Technology even says that with an income of €38,000, it is almost impossible to buy a house in the big city (Ten Teije, 2020). Therefore, a buyer would have to have his own money, and data from the Central Bureau of Statistics (CBS) show that Rotterdam is the least affluent city in the Netherlands (Rijnmond, 2020). The average capital of a Dutch household is €49,800, and in Rotterdam, an average household has a capital of €6,900. It is also remarkable that an 'affordable' house in Rotterdam is much more expensive than other cities. In Amsterdam, the limit is drawn at €156,000; in Utrecht, owner-occupied houses are not even included as part of the social housing stock (Staalduine, 2019a). This may also explain the progress report of the Woonvisie, which states that Rotterdam is the most affordable metropolis to live in (Paling, 2020). The affordability described there seems to be an illusion in a way.  

In addition to owner-occupied homes, the report also mentions social housing in Rotterdam. There are said to be too many affordable homes compared to the size of the target group for these houses. Kurvers wants to eliminate approximately 15,500 social housing units between 2017 and 2030. This number is based on calculating the number of cheap homes and the number of low-income residents. However, when does a household have a low income? Here too, calculations sometimes seem to be far apart. CBS indicates that the proportion of low-income households in Rotterdam is the highest in the country at 14.5% (2019). According to Trouw, 55% of households in Rotterdam have a lower income; Kurvers calculation speaks of a 'primary target group' comprising 41% of Rotterdam households (Staalduine, 2019a). Thus, there is no single straightforward calculation method, and this also causes discord between the municipality and the housing corporations. The corporations believe that 9000 of the 15.500 social housing units should not be demolished. Even Mayor Aboutaleb stated in a debate that everyone makes their calculations (Woonbond, 2020), which illustrates how controversial the figures are, both in calculating affordable housing and in calculating low-income households. It is striking, given that these calculations form the basis for policy regarding the construction or demolition of homes and determining whether there are more affordable homes than the target group for these homes (Municipality of Rotterdam, 2016).   

In addition, in 2017, the municipality of Rotterdam already had 5,000 fewer social housing units than it calculated initially. Since the previous count in 2017, 4,100 dwellings have also disappeared due to renovation or demolition, which amounts to a total decrease of 9,100 social dwellings (König, 2020). At the same time, the number of house seekers is increasing significantly, from 45,512 in 2016 to 71,929 in 2019 (Woonbond, 2020). According to Jonker (2021), Kurvers should have added 2,250 social housing units since he became an alderman, whereas there are currently only 300. In addition, the alderman would regard specific housing units as social housing, while this is not the case. Jonker mentions the example of the Startmotor in Rotterdam South, where 560 housing units have been completed. The City of Rotterdam considers these houses to be social housing, but this does not correspond with the rent. The basic rent, including service charges, is €977 for a 35-square-metre property. In this case, a starter with a monthly salary of €1,800 would spend over 60% of his or her income on housing costs. Kurvers wrote an editorial in the Dutch financial daily in 2020 in which he argued that housing corporations should be given more leeway to build rental homes in the middle segment, according to Kurvers with rent between €720 and €1,000 (Kurvers, De Boer, Hoes, Terpstra & Verhagen, 2020). Taking this into account, it is remarkable that the homes of the Startmotor op Zuid are considered social housing.  

It is quite comprehensible that the municipality wants to focus on middle-income households since Rotterdam is a city with a rather strong polarisation. There are, in fact, two large groups at the top and bottom of society (Custers, 2017). However, it is remarkable that the vulnerable group at the bottom seems to become less and less significant while representing a relatively large share of the Rotterdam society. In the Woonvisie, the focus is firmly on middle and high incomes, while it is easier for people with higher incomes to find a home in Rotterdam than for people with low incomes who are dependent on social housing. In addition, of the new developments in Rotterdam, 20% must be social housing, 30% are intended for middle-income households and 50% for high-income and expensive housing (Ten Teije, 2020). Given the analysis above, it can thus not be stated that the 20% social rental homes mentioned are actually social, and according to Schaik (2019), the actual demand for social rental homes is much higher than the supply.  

The objectives of the Woonvisie are reminiscent of the urban renewal of the 1970s. Large numbers of outdated working-class houses had to be renovated, and residents protested that no attention was paid to inner-city neighbourhoods. They felt that the municipality had a utopian picture of the future in mind, and the protesters emphasised the existing city: the city where real people live and work, the city where people are less and less part of progress (Maandag, 2019). Ultimately, this resistance brought residents together with the municipality and plans were drawn up and implemented in which the wishes of the resident were paramount. It is striking how the role of the Rotterdammer seems to have changed in the current Woonvisie. Whereas at the time of urban renewal, residents played a prominent role in project groups and were placed first, the preface to the Woonvisie now reads: "This document is a call to developers, corporations, investors, healthcare institutions and Rotterdammers to contribute to the realisation of our vision." (Gemeente Rotterdam, 2016:3). This particular order paints a good picture of how times have changed and how market players are at the forefront today.  

CONCLUSION

In summary, the above analysis shows that a surplus of cheap dwellings and a too-small target group for these dwellings cannot simply be assumed. The (local) government seems to frame the situation in a way that does not correspond to reality. First of all, housing affordability seems to be an illusion because the alderman is raising the affordability limit. This limit is based on the increase in house prices and not increased incomes (Staalduine, 2019b). It appears that people with incomes up to €38,000 cannot get a mortgage for these 'affordable' homes, and it is questionable in the first place whether they can afford to buy a home in the city these days. Secondly, there seems to be a discrepancy in the calculation of low-income residents; the calculations and outcomes of various parties can vary greatly, making the process non-transparent. This is a remarkable fact, given that this income is the basis for the municipality's decision to remove or add affordable housing. There are already several thousand fewer social housing units than the municipality initially assumed, and the number of house hunters continues to rise significantly (Woonbond, 2020). Then there is the somewhat ambiguous assumption that people pay a rent of up to €720 per month for social housing. This turns out not to be the case in practice, as more expensive rental homes are also included in the social housing stock (Jonker, 2021).  

 Several recommendations follow from the analysis. First of all, the current limit of an affordable house is unrealistic and not transparent and should therefore be re-evaluated, preferably in consultation with other major Dutch cities, to draw a single line. An increase or decrease in income should be the basis for calculating affordability, not the increasing property value in the city. The municipality should also draw a clearer line as to when a rental property is 'social' to avoid misunderstandings, such as with the Startmotor.  

Second, the calculation of the number of low-income households does not seem transparent. Different parties use different calculations, and because the municipality states in the Woonvisie that there are fewer people with low incomes than there are affordable homes, it is of great importance that such calculations are correct and transparent. Since Rotterdam's future housing composition depends on these calculations, the groups present in Rotterdam, their incomes, and the extent to which they can afford certain housing types should be thoroughly studied. This process should be transparent and prevent the market from determining the housing supply too much. On the one hand, the government should therefore be more straightforward and more transparent, and on the other hand, they should actively protect citizens.  

Thirdly, the municipality should stimulate more active citizen participation to counterbalance the market forces that have come to dominate Rotterdam's housing policy. In this respect, lessons can be drawn from the past. In the urban renewal of the 1970s, civil servants went into the neighbourhood and project groups were set up for and by residents and in consultation with the municipality (Maandag, 2019). The question is whether today's urban renewal does not once again employ objectives that appear as a distant mirage on the horizon, but which lose sight of the Rotterdammer. Shouldn't the resident function more as a client, for example, through co-creation and take on an active participatory role? Would this not be able to soften and regulate the emerging privatisation? The example is already there, one in which a democratic platform was created and 'Building for the Neighbourhood' was actively applied by neighbourhood residents and officials (Maandag, 2019:38).