The city council is starting two temporary financial schemes to boost housing construction. This is the result of discussions with IVBN and NEPROM, the representatives of the institutional investors and developers, who play a major role in the new construction in Amsterdam. It concerns a scheme to stimulate transformation to housing and a scheme to stimulate extra possible in the field of affordability, sustainability and spatial quality in tenders.
The municipality signed a letter of intent with IVBN and NEPROM in 2020 to jointly provide more affordable housing. This contains agreements to increase construction output and increases to be made. The parties also agree to further discuss and determine the land price. Now that these talks have been completed, the Commission is introducing two temporary regulations. The arrangements will start next year.
Alderman Jakob Wedemeijer (Building and Living): “With these schemes we want to ensure that, despite the enormously high construction costs and the shortage of personnel, the high construction figures of the past eight years can be continued for longer. With this temporary financial arrangement we are encouraging the construction of extra social housing and medium-priced rental medium-end-priced owner-occupied homes: which the residents of Amsterdam have a great need for.”
Desirée Uitnemers (chairman of NEPROM): “Over the past two years, we have had intensive consultations with Amsterdam about land prices, tender conditions and how to deal with the value of buildings to be demolished when converting them into homes. All this with the common goal of building more and faster rental and owner-occupied homes. Although the consultations are held openly and constructively, we have not reached agreement on everything. But we are happy with these two arrangements and the other arrangements we have made. This is a first important step and we see in advance an encouragement to continue our consultations, if we want to eventually share the ambitions. More and more sustainable new-build homes in Amsterdam quickly.”
A larger part of the new construction in the city must come from transformation projects, because there is less less empty building land. In the cases of transformation, it is difficult to complete the project due to the high construction costs of the value of the existing property. To prevent projects from starting delays or not proceeding at all, implementation from February 1 for new agreements in transformation projects will be a compensation of 10% on the price for all homes to be built. It concerns projects with at least five affordable homes and the scheme for one year.
In addition to conditions that are standard in tenders, the municipality also has various ambitions in the field of sustainability, affordability and spatial quality. If market parties also include these ambitions in projects, they have a better chance of winning the tender. But due to the high construction costs at the moment, it is not always financially feasible to include the extra ambitions in the plans. The municipality attaches great importance to sustainability ambitions, such as green roofs, circular construction of energy-neutral homes and affordability ambitions, such as large medium-priced rental homes. That is why it is being developed in three tenders, in which the costs of the extra ambitions that are included in the plans are settled. This is possible up to a maximum amount of 10% of the land price for the expected homes. Exactly which ambitions count will be worked out over time.
Alderman Marieke van Doorninck (Spatial Development and Sustainability): “Amsterdam has high ambitions for the quality and sustainability of new construction. In order to realize all these ambitions, this temporary bonus is being set up. With this scheme we do not want to build rental housing for a fee, but also to maintain it. The agreement is that the homes will remain for a long time.”
Wim Wensing (board member of the IVBN Residential portfolio): “IVBN is looking forward to this trial with two temporary financial schemes to give the construction of homes a boost. Because, if the ambition bonus indeed – as we hope – offers the possibility of delivering better quality through a lower price of land, then the instrument can contribute to the joint pursuit of more mid-market rent. With the well-thought-out transformation impulse, Amsterdam has responded positively to the criticism from IVBN/NEPROM that the contribution value of real estate to be transformed is included in the calculation of the land prices / leasehold amendments, resulting transformations are more difficult because of. The IVBN members involved in the new construction in Amsterdam are making every effort to realize the mid-rental new construction, although it remains a very difficult task.”