News item | 6/16/2023 | 5:17 pm
An updated calculation of the National Performance Agreements (NPA) agreed with housing corporations last year shows that at a national level the financial position of housing corporations is good for the coming years and that the public housing tasks up to and including 2030 are largely financially feasible. That is what Minister for Housing and Spatial Planning Hugo de Jonge writes to the House of Representatives today. The calculation has been updated due to the new economic circumstances, such as increased interest rates and construction costs. The position of housing associations is strong enough to deal with the changing circumstances in the coming years, although there are regional differences. In the longer term, however, the financial position of housing associations will come under pressure, as the updated calculation shows.
“The corporations must double their new construction production in the coming years. This is a major and important task to reduce the shortage of affordable housing. It is good news that corporations also have the financial resources for this, in principle, we now have to ensure that those homes are also built together.” said Minister Hugo de Jonge.
Last year, it was agreed with the corporations in the National Performance Agreements that they must build 250,000 social rental homes in the coming years. In addition, they must make more than 675,000 homes more sustainable and tackle the homes with the worst energy labels in the coming years. And this year they will reduce the rents of approximately 600,000 low-income tenants to 575 euros per month.
Intended investments by corporations increased sharply
The intended investments by housing associations to achieve these goals have increased considerably since last year. This is evident from the Indicative Spending Space for Housing Associations (IBW), which annually provides insight into the remaining investment opportunities of housing associations. This means that the National Performance Agreements have largely ended up in the budgets that corporations have drawn up. The agreements made in the Housing Deals and the local performance agreements that will be made in the coming months should ensure that the planned investments also lead to the realization of new homes.
Building plans are in line with public housing priorities
As of this year, the National Performance Agreements have been incorporated into the public housing priorities. In doing so, the national government ensures that corporations, municipalities and tenants’ organizations in each municipality also take the national goals into account when making local performance agreements. Before 1 July, housing associations must provide municipalities and tenant organizations in their region with insight into their construction and investment plans in the context of the local performance agreements. In this way, concrete agreements can be made about what corporations will do in the coming years, and what they can expect from municipalities and tenants. It is particularly important for housing associations to quickly gain insight into sufficient building locations.
Long-term position of housing associations under pressure
The update of the calculation of the financial feasibility of the NPA shows that the tasks that have been agreed are largely financially feasible in the coming years. However, the financial position of corporations has become more uncertain due to rising interest rates and costs. The update also shows the importance of stable rental income for corporations. A higher interest rate or deviation from the agreed rental policy has a direct influence on the feasibility of the assignments. The agreements on rent moderation in the period 2023 – 2025 must therefore be properly implemented in the interests of tenants and corporations. The current calculation also shows that the major challenges for new construction and sustainability are causing financial pressure for housing associations in the longer term. Corporations cannot sustain the high level of investment required until 2030 indefinitely. That is why the financial balance sheet of housing associations will be closely monitored in the coming years, so that timely measures can be taken to ensure that housing associations can also fulfill their social task after 2030. The National Performance Agreements will therefore be recalculated next year, with a particular focus on the sustainable business model of corporations.