KEY LEARNING POINTS
- Individual private homebuilders can deliver projects alongside speculative and custom builder developers, the private rental sector and ‘building groups’, all on the same, relatively small site, and this can create opportunities for people on a range of incomes
- A well-resourced enabling team has facilitated this project as part of an on-going development programme on sites across the city. The Den Haag team is now hired by private landowners to deliver schemes on their land
- Den Haag has encouraged and facilitated individual private homebuilders to work as a group. It says this has worked well, and many private homebuilders have taken up this opportunity
- Den Haag would be clearer in future about responsibility for boundary treatments – there has been confusion at Isabellaland, which could be remedied with clearer wording in the Plot Passport
- There was also confusion about who was responsible for the construction and on-going ownership of the shared parking facilities. In the future, the city would engage more explicitly with the developer used to deliver the groundworks
- Plots for detached and terraced homes seem to be easier to sell, while plots for semi-detached homes seem to have less appeal
Den Haag has a very active enabling team that has delivered almost 600 homes in three years by supporting private homebuilders. The initiative focuses on Kleinschalig Opdrachtgeverschap (KO, or ‘small commissioning’) of homes on municipal land and has resulted in nearly as many different investors as there have been new homes. The city is pleased with the variety of housing opportunities that this approach has created.
Isabellaland was one of its key bouwlocatie (‘sites’) for 2015 and opitimises the city’s approach to ‘KO’. The land was made available to the KO programme after negotiations with a larger private developer fell through (as with many disposals following the financial crash of 2008).
The city sees all citizens as potential investors in the city – veel mogelijkheden (‘many possibilities’) is the key marketing slogan - and it deliberately engineers development opportunities for individual households, as well as groups who want to build together, small speculative developers, entrepreneurs building one-off homes to sell and investors building to rent.
A variety of plot sizes is provided, producing a range of development opportunities for those on a range of household incomes.
The initiative has been very successful and a number of other Dutch cities – as well as a few housing corporations – have since adopted a similar approach. You might want to refer to our Briefing Note on Plot Shops - which includes more information about the Den Haag approach - or our Briefing Note on resourcing.
SUMMARYThe Dutch city of Den Haag (‘The Hague’) has a very active enabling team that has delivered almost 600 homes in three years by supporting private homebuilders. The initiative focuses on Kleinschalig Opdrachtgeverschap (KO, or ‘small commissioning’) of homes on municipal land. The Isabellaland site is typical of the council’s approach to private homebuilding.
No. Units around 100
Plot costs £37,000 - £275,000
Total Plot sales approx £4.5m
Isabellaland is located in the Mariahoeve (‘Maria farm’) neighbourhood, on the outskirts of Den Haag, close to the Dutch polder countryside and the Haagse Bos (‘Den Haag forest’). It is within walking distance of key amenities and a 15-minute drive from Den Haag city centre. The neighbourhood has a British School and is home to a significant proportion of expatriates.
The municipality is heavily marketing the area as a ‘green enclave’ and has identified it as a focal point for new house building, promising significant investment in development and amenities in coming years.
For the purposes of this Toolkit we have made the following definitions:
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THE MASTER PLAN
The master plan sets out a total of 63 plots. Some plots allow more than one home to be built and some are reserved for apartment blocks, so the total number of homes will be between 96 and 108, dependent upon final build out.
The site provides mostly single-family townhouses in a terraced arrangement, as well as some detached bungalows and larger villas – and this is designed to reflect income distribution and household composition within the surrounding neighbourhood.
The site has two distinct parts – a small strip opposite the a college building; and the college’s former sports field, where the rest of the plots are located. The development is set within a dense urban area and integrates well with the surrounding urban grain, encircled by canals typical of the Dutch polder landscape.
The council is collaborating with developers and residents on the design of the green areas, particularly the larger area near the entrance to the site. Parking must be provided on the larger plots, and is grouped in the middle of the scheme for the smaller plots. Visitor parking is integrated subtly around the internal ring road.
All the plots at Isabellaland are described as ‘compact’ plots, generally 10m deep and 4.8m, 5.4m or 5.7m wide, and are all reserved for residential or ‘live/work’ use. One row of plots is available in divisions of 60cm, provided they are purchased in contiguous blocks and meet a minimum width requirement. This flexibility provides a range of plot sizes to suit a range of budgets.
Different planning restrictions apply to different plots and the municipality has produced an Inspiratieboek (‘inspiration book’) illustrating sample designs that would be acceptable in each area
The Inspiratieboek and accompanying Gebeidsplan (four-page, condensed ‘area plan’) for the site encourage sustainable design and stipulate that roofs must be flat and at least 50 per cent green. The documents direct private homebuilders to further information on the integration of green roofs with their designs, and give details about municipal subsidies that can be requested to help with the costs.
Plan to accommodate a wide range of homes
Set out the site so that it can accommodate a range of types and sizes of homes, and be prepared for these to be delivered by individual private homebuilders, groups or custom build enablers
THE BUYING PROCESS
The Inspiratieboek lays out a very clear four-step process for purchasing a plot and building a home. Den Haag also requires plot purchasers to work with a ‘buyers coach’ – a permanent point of contact throughout the whole process. Purchasers can also visit the Kavelwinkel (‘plot shop’) in the city hall to talk to one the city’s team of advisers.
Stage 1 involves the private homebuilder taking out an option on a plot. They pay a non-refundable €300 reservation fee as a gesture of commitment and then have a 12-week option period within which to pay a further ten per cent of the plot price as a deposit. Only then will they have secured their plot. Purchasers can request a one-off extension of up to six weeks if they have unforeseen or exceptional difficult arranging finance.
Stage 2 begins upon payment of the ten per cent deposit, which the private homebuilder can finance through their own funds, a bank guarantee deposited in an escrow account or a personal loan. The deposit is non-refundable, unless the purchaser can demonstrate that any failure to obtain further finance was outside of their control, in which case they receive half of the deposit back. The private homebuilder then has a maximum of 12 months to develop the design and construction plan for their home, which culminates in an application for an ‘environmental permit’ – which checks the design against building regulations, codes and the plot passport for the site. Approval takes between six and eight weeks and the city levies a fee of 3.52 per cent of the plot price to process the permit. If the private homebuilder has stuck to the Plot Passport, then they can receive the permit in a week or two.
Stage 3 commences upon receipt of the environmental permit. The land is transferred to the private homebuilder, who can now commence the draw-down of their finance, which is usually a staged-payment mortgage with payments in-line with phases of construction. Alternatively, private homebuilders can elect to take up an erfpacht or ‘perpetual leasehold’ on the land, and pay an annual ground rent of 2.3 per cent of the remaining plot price after any deductions have been made. The rate is fixed for five-year intervals to give private homebuilders some cost certainty. If the leasehold option is taken, the private homebuilder must also pay VAT at 21 per cent, but they also get their ten per cent deposit back. This means that the cheapest plots at Isabellaland can be purchased for around €50,000, or rented for around €80 per month after initial payments have been made. Ground rent payments are tax-deductable in the Netherlands.
Stage 4 covers the build-out of the plot. Private homebuilders have a maximum of three years to finish and occupy their home – with a €25,000 fine if they miss the deadline. Some other Dutch municipalities impose as much as this per month as a very clear incentive for private homebuilders to finish their builds. The experience in Den Haag is that private homebuilders often build out much quicker than the deadlines require. There are often additional certificates required during this stage – and fees payable – for the connection of utilities.
A happy customer after paying his ten per cent deposit (July 2013). Purchasers get a ‘stripe’ through their plot once they have taken an option on it, and full cross upon completion of the deposit payment – from www.biancaland.nl
At the time of writing, 48 of the 63 plots had been sold (76 per cent) and their owners had started building. Some had even completed. A further 7 plots (11 per cent) were at various stages of the buying process (option, deposit, permit application, etc.) and eight plots (13 per cent) remained available for purchase – these are mostly the plots reserved for semi-detached homes, which the municipality has reported as being harder to sell. However, it expects demand to pick up now that the detached and terraced plots have all sold.
Two rows of plots (about 25 per cent of the homes) have been sold without the ‘occupation duty’ meaning their purchasers do not have to commit to living in the home themselves. All of these plots were purchased by a small custom build developer, WeBuildHomes (www.webuildhomes.nl), which offer ‘co-creation’ of homes with its customers.
Another developer, Schouten (www.schoutenbouw.nl), purchased the three larger plots reserved for apartments, which were also sold without an occupation restriction. It has elected to build townhouses as well as apartments, and this is permitted by the Plot Passport. Schouten is also employed as a master-developer on another row of plots, by a number of individual private homebuilders who have clubbed together to commission the design and construction of their homes.
Where private homebuilders are interested in saving costs, the Inspiratieboek encourages them to join together and form a bouwgroep (‘building group’ or ‘assembly’) with other plot purchasers. This could be for the full design and construction of homes, but also just for sourcing materials or putting in the foundations (which are often piled using specific machinery that it makes sense to share). The municipality encourages and facilitates collaboration, but does not enforce it - even supporting informal knowledge exchange by hosting occasional drinks evenings at the city hall. The municipalities overall experience across all its sites is that 75 per cent of private homebuilders choose to cooperate with others in some way.
At Isabellaland, one group of individual plot purchasers has clubbed together on an entire row, and is having its homes designed by a single architect, while others have conducted some tasks – such as material sourcing - in pairs or smaller groups. In total, 24 of the 63 plot purchasers have collaborated in some way, in four separate groups.
Site as of February 2015 – A few detached homes are complete around the periphery; WeBuildHomes’ plots are largely complete, apart from two corner plots where it is working with an architect to develop a bespoke solution (corners do not exist in its catalogue of customizable floor plans and facades); a few terraced homes are well underway, being built out collectively by their individual owners - from www.biancaland.nl www.biancaland.nl
There have only been small delays in the build programme for the site, relating principally to confusion about boundary treatments and parking provision.
Initially, the municipality stipulated that certain boundary treatments must be hedgerows, which it supplied – however, their delivery was not coordinated with the build programme of the plot purchasers and many have been replaced with cheap, unattractive timber fences that the municipality is worried will become permanent features. In the future, it would make boundary treatments a clear responsibility of the plot purchasers.
A similar confusion about responsibility arose concerning the construction and ongoing responsibility for the shared parking facilities, this time between the municipality and Schouten. In the future, the municipality would engage very directly on this issue to ensure clarity.
Private homebuilders’ blogs cite that there were also difficulties in controlling behavior on site – preventing some contractors from pouring surplus concrete down drains, for example – and that the municipality was slow to engage with private homebuilders on the design of the communal areas.
WeBuildHomes build-out as of September 2014 – its system means homes can be constructed to private homebuilders’ specification within four weeks, with the full development process taking between 12 and 20 weeks – from www.biancaland.nl
Plots 40-47 being built out collectively by their owners using a local building firm (June 2015), adjacent to plots 38 and 39, which are already well underway and by a different contractor – from www.biancaland.nl
Be clear about plot boundary treatments
Some purchasers have installed their own ‘temporary’ timber fencing, rather than the co-ordinated approach initially planned
Den Haag municipality gives go ahead for the ‘small commissioning’ initiative and begins development appraisals for a number of sites
Isabellaland identified as a site within the 2nd tranche of sites under the initiative; plot prices are fixed at this point
Plot sales commenced
First deposits are paid, following the preparation of designs by the first purchasers
Municipality begins to install access road
First homes completed by custom build developer on plots 51-60
DEMAND AND PRICES
No direct record was kept of demand for the Isabellaland plots, but the council’s enabling team said that they often have people queuing for up to a week in advance of a tranche of plot releases – an experience common with enabling teams in other Dutch cities.
The Den Haag team has found that its approach is so successful that other landowners now approach it to manage development on privately-owned land – for which it is able to charge a €10,000 per plot fee.
At Isabellaland, a fixed price was set for each plot - and plots priced differently according to their size and location.
The central plots are the most expensive and are all priced at €450 per sq m. Plots around the edge are cheaper and priced at €350 per sq m (northern edge), €375 per sq m (southern edge) and €400 per sq m (western edge). The three larger plots in the north-eastern corner are individually priced at €277 per sq m (plot 61), €400 per sq m (plot 62) and €429 per sq m (plot 63).
Generally, the higher price per sq m corresponds to a higher permitted building height.
The smallest plot (108 sq m) cost €48,600, while the largest (806 sq m) was priced at €362,500 but could be subdivided in 60cm strips and was not expected to be sold to a single individual or group (although this would have been permitted).
In its post-sales analysis, the municipality has found that detached houses of between 160 and 200 sq m cost between €250,000 and €300,000 in total for the land and construction, and that these were affordable for households with a monthly income of between €2,000 and €2,500. The semi-detached properties of the same size were cheaper – at between €125,000 and €150,000 in total – and could be afforded by households with an income of around €1,500 and €2,000 per month. These semi-detached homes have attracted households formerly in social-rented accommodation.
The council has found that it also gets its money quicker through the KO process – as there are no protracted negotiations on price with developers.
Total plot sales at Isabellaland fetched €5,951,000.
The majority of the plots have been marketed directly to individuals, although three tranches have also been opened up to speculative developers, private-rental investors or groups of private homebuilders who want to build together, rather than individually.
Gemeente Den Haag (the council) produced a series of documents to market the plots, and makes extensive use of its accessible Kavelwinkel (‘plot shop’) in the city hall in the centre of town. This is open for appointments and drop-ins between 12:00 and 17:00, Monday-Friday, as well as special opening hours around new plot releases.
The Verkavellingskaart (‘plot plan’) and Gebiedskaart (‘area brochure’) make it very clear what the plots cost, what size they are and what scale of development would be accepted on them, while the Inspiratieboek (‘inspiration book’) adds further detail about what kind of homes would be accepted. The document includes a clear diagram of the land-purchase and construction process, and a list of architects, custom build developers and catalogue builders with costed examples suitable for the different plots within the scheme (bungalow, three-storey terrace, etc), each checked against the site’s building rules. Each architect or developer generally gets around two pages to show their work and 44 separate firms are listed.
The Inspiratieboek also gives advice about hiring builders. This recommends private homebuilders check that their contractor is insured for bankruptcy; they are also advised to obtain liability insurance.
The municipality also has a strong web and social media presence, using a good website (www.denhaag.nl/ik-bouw-in-den-haag.htm ) as well as Facebook (www.facebook.com/ikbouwindenhaag) and Twitter (www.twitter.com/ikbouwindenhaag).
You might want to refer to our Briefing Notes on effective marketing techniques, Setting up a Plot Shop and the Sales Management Process - which includes more information about the Den Haag approach, as well as other innovative marketing techniques - or to our Briefing Note on Resourcing.
Adverts from architect Marc Koehler Architects (top) and custom build developer WeBuildHomes (bottom) in the Isabellaland ‘inspiration booklet’ – private homebuilders can choose to work with an architect to design their own home, or a developer to build one for them. The municipality asked those advertising in the inspiration book to develop ‘off the shelf’ designs that could be deployed at the site. Before being included in the book, the designs were checked against the ‘building rules’ for the site and costed, so purchasers could get an idea of the base-line price. The book describes exactly which plots the designs are suitable for. However private homebuilders are free to choose their own design and construction team and are not limited to those in the book. Many more designs and teams are featured online at www.architectuurcatalogus.nl
Consider producing an ‘Inspiration Book’
These can help potential purchasers visualise what can be built, and the approximate costs of the various options. It can also set out the clear process and timelines for designing and building on the site
This case study was compiled with reference to the following sources:
Hans Sparreboom – Den Haag enabling team
Lisa Barkey – WeBuildHomes
Mark Koehler – Mark Koehler Architects
Berci Florian – Wikaza.nl
Hans Beekenkamp – Expertteam Eigenbouw
Kleinschalig Opdrachtgeverschap initiative (including ‘evaluation’ of the programme)
Isabellaland web page
‘Biancaland’ blog – detailed description of the process by a private homebuilder building out a detached house at Isabellaland over c.50weeks
The NaCSBA Research & Development Programme is funded by the Nationwide Foundation and aims to promote the self-build and custom build sector as an affordable route into housing for a greater number of people in the UK.
For further information, please visit:www.nacsba.org.uk or www.selfbuildportal.org.uk