KEY LEARNING POINTS
- If organised properly, group projects can enable young people to afford their first home
- A good ‘process adviser’ will ensure a group project runs smoothly
- Public grants or zero-interest loans to cover pre-development and set-up costs can be play a big part in getting projects off the ground
Young people in this part of the Netherlands were finding it increasingly difficult to secure an affordable first home. There was also very little social housing being built.
The local council decided to explore if collective private homebuilding could be used to deliver more cost-effective homes for local first time buyers. It commissioned an experienced ‘process advisor’ (De Regie) to help a group design and build 22 low cost homes on a small plot of land in the village of Akersloot.
This project was supported by the council of Castricum and the provincial authority - the Povincie Noord Holland (PNH).
Local Alderman, Berd Meier, says that finding ways to help young people stay in the locality is important for the quality of life in the area.
"It's not just a question of money. Developing from the bottom up, by those directly involved, it for me the key. Their will, perseverance and patience makes much more possible"
Alderman for Akersloot
Akersloot is located in the municipality of Castricum on the Netherlands’ north-west coast.
De Vrijegeest is a collective housing project for young, first-time buyers in the village of Akersloot, just north of Amsterdam. By working together, with support from a specialist advisor (and in partnership with a housing association) the collective built homes that cost 22 per cent less than equivalent local properties. The residents also had a major say in the design of their homes
Initiator: Public Sector and Community
Affordability: Low Cost
Built Form: Terraces and Apartments
For the purposes of this Toolkit we have made the following definitions:
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No. Units 22
Typical home size 100 q m
Typical home cost €140,000
DEVELOPMENT PROCESS AND LAND
During the reconstruction of the village school several buildings were consolidated, freeing up a portion of the site for housing.
De Regie worked out that the local planning guidelines would permit 22 homes on the site. It then teamed up with a regional housing association (Kennemer Wonen) to recruit a group of young people with local connections who were looking for their first home.
The council arranged for the land to be made available at zero cost on a leasehold basis through the housing association.
The housing association also administered a special tenure arrangement called ‘Koopgarant Construction’ (or ‘sale guarantee construction’). In the Netherlands this is an ‘intermediate tenure’ in which homes are sold at a discount – typically 25 or 30 per cent – which is facilitated by a housing association taking an equity stake in the home in order to facilitate affordable home ownership.
Although the housing association technically holds an investment in the home, the resident is legally treated the same as a 100 per cent owner, with all the associated rights and responsibilities. More information about the ‘Koopgarant’ is available from Opmaat, here (in Dutch) - http://www.opmaat.nl/zakelijk/producten/koopgarant.html
At De Vrijegeest, this enabled the residents to get mortgages from commercial mortgage providers.
In return for these lower prices, the new owners have two obligations. Firstly, they cannot sell on the open market, but must instead offer their home back to a housing association (which must be one that is registered under the Koopgarant programme). The housing association guarantees to buy it at a discounted price equivalent to the original discount.
Secondly, the uplift in value is shared between the seller and the purchasing housing association.
The housing association must then offer the property to another household under the Koopgarant programme – and in the case of Vrijegeest, this must be to another first-time buyer from Akersloot.
After 15 years, the restriction ceases to apply and the home simply becomes an open-market property – this is designed to reward those that remain in the village.
Collective Private Commissioning (CPO)
The CPO model involves enabling the future residents to work as a group to make all of the main decisions that affect the development – so the group effectively acts as a developer.
Process advisor De Regie was initially appointed to help the group get organised and make decisions. The advisor also administrates the finance process, which relies on the simultaneous draw down of all the individual stage payment mortgages at key points so the group can pay the contractors as they build the homes. A process advisors involvement generally reassures lenders that the project will run smoothly.
Another key part of their role was to coordinate the design process and help the group to work together to make decisions. De Regie therefore organised fortnightly ‘technical’ evening meetings; the first half of these meetings was about delivering information, and the second half focused on making decisions (based on the information provided at the last meeting). This kept up the pace while giving group members time to absorb the information and ask questions - a key principle of empowering them to control the development process.
The architect was Kerssens De Ruiter and the contractor was De Geus Bouw.
Knowledgeable, independent advisors help groups get their projects off the ground
In Europe a network of impartial advisors has developed to support groups. Try to identify similar experts to support groups in your area
FINANCE AND COSTS
Grant aid and loans to help set up a project
Financial support came from an initiative run by the Povincie Noord Holland (PNH). This provided an initial grant of €30,000 to help with the administrative and organisational costs of setting the project up.
To qualify for a grant groups need to set out the number of homes they hope to deliver, the expected building costs and the anticipated land price. Some initial feasibility work around the legal and planning issues is also expected, as well as a programme that sets out when the project should expect to pay back any loans. A budget for design work is also needed (accompanied by estimates) along with a letter of support from the local town council or Alderman.
The grant funds up to 75 per cent of the set up costs, up to a current maximum of €15,000 (about £11,500), and has to be spent within two years. Housing associations and commercial developers are not eligible for the grant.
PNH also provided a loan to help get the project ready to start on site. The loans are available up to a maximum of €4,000 per home, or €80,000 per group.
A copy of the terms and conditions of the PNH initiative can be found here (in Dutch) - http://www.noord-holland.nl/psstukken/openbaar/AVV/AVV-PB2013-69.pdf
Modest grants can help group projects progress quickly
Consider providing financial support for groups in their early stages – so they can get their projects ready to start on site
Investment from the housing association
Housing association Kennemer Wonen invested €542,500 to help reduce the cost of the land. In return the first generation of owners are obliged to sell back their house (if they leave within 15 years) to the housing association at a reduced price – referred to as a ‘Koopgarant’ arrangement.
Kennemer Wonen also supported the cost of the design work, prior to drawing down the first stage payments of the individual mortgages secured by each member of the group. De Regie collected all the stage payments at the same time and paid these into a specially set-up building company.
De Regie’s fees were €60,000 and other pre-development costs came to roughly €300,000.
The guidelines for projects like this are that the average cost of building the homes should not exceed €215,000 (about £165,000), excluding land costs. Here the total build cost (including 19 per cent VAT) worked out at €3,077,000 – an average of just under €140,000 per home. The properties were subsequently valued at an average of €179,000 each – a saving of about 22 per cent.
Partner with housing associations to ‘reduce’ the cost of land
If a housing association invests in the land, this can significantly reduce the upfront cost of the homes. Homeowners can be obliged to sell their properties back to housing association, at a reduced price, should they want or need to move on
NUMER AND COST OF HOMES
The site on which the buildings sit is around 3,500 sq m – including a 400 sq m shared courtyard garden, private garden space and around 3,500 sq m of residential space over three floors.
Each home is quite small – ranging in size from 45 sq m to 93 sq m - and predominantly occupied on an individual basis, although they would also be suitable for a couple. Typical costs are between €80,000 and €153,000 (between £63,000 and £121,000), depending on the size of the home. This figure did not include an additional sum for ‘finishes’, which residents could choose to pay (and have installed by a builder), or they coul tackle this themselves and benefit from ‘sweat equity’ (as the home would be worth more as a result of their labour).
The homes are designed as starter homes - with one or two bedrooms - rather than family homes, in order to make them as affordable as possible for first-time buyers. Due to the ‘Koopgarant’ tenure arrangement (described earlier), the homes are available at a discount of between 25 and 30 per cent compared to equivalent properties locally.
Twenty-two young people were recruited to the project from the housing association’s waiting list, or as a result of a small advertising campaign run by the association’s in-house team, focusing on Akersloot and the surrounding villages of Limmen and Castricum.
Nearly 60 people said they were interested in joining the project, including 46 from Akersloot itself. The final 22 were selected according to a small number of eligibility criteria: -
- Minimum 18 years of age
- Maximum gross annual household income of €37,000
- Must be currently living in the municipality of Castricum (which includes Akersloot) and have lived there for at least ten years, unless they were forced to move outside the area due to a lack of affordable housing options
- Minimum of five of the 22 homes reserved for those from the village of Akersloot itself
- Not allowed to be current homeowners
The vast majority of group members did not know each other before joining the project.
The homes are arranged in a courtyard around a modest shared patio garden which is open to the street on one side. All the front doors open onto the courtyard.
The two long arms of the courtyard match the surroundings in terms of size and scale, and the square end is slightly higher to match the adjacent school sports hall. The architect was inspired by older homes in Akersloot – and this has not only inspired the choice of materials, but also the desire to tie the scheme into the existing green spaces that run through the village.
The homes themselves come in eight different types and include 11 three-storey terraced homes, seven two-storey maisonettes, and four single-level apartments.
Each home also has a small storage room located near to the entrance to the scheme and most also have a loft.
The court acts as a shared outdoor space and is maintained and managed jointly by the owners.
Each home has one car parking space, which is arranged around the edge of the scheme.
Only some of the homes were customised for a specific occupant; most are quite universal. The group recognised the cost savings that would arrive through a broadly common specification and layout.
The group met the architects monthly and with De Regie every two weeks to make other project-related decisions.
The group was able to determine which homes went where, as well as the façade design, services installations and the internal layout of the own homes. Residents could also choose the finishes -which they decided collectively for the exterior, and individually for their own homes.
The only thing the group couldn’t change was the courtyard form of the homes. This had been decided by De Regie and the architects to fit within the planning guidelines for the area, and because it provided a cost-effective approach to construction. This simple form is also cheaper to maintain and left room in the budget for better quality internal and external materials.
About De Regie
De Regie was formed in 1996 to facilitate development projects involving groups of private homebuilders. The directors of the firm set it up following their experience of building their own project at Gespleten Hendrik Noord in the De Buren neighbourhood of Amsterdam.
De Regie advises councils on how to set up projects that address particular housing needs. Its work often involves exploring how to bring sites to market - for example, through land assembly, or by facilitating dialogue across often council departments to help to shape planning policies or development briefs.
De Regie works directly with groups as a ‘process adviser’ supporting them throughout the development process. Groups often approach De Regie independently, but are sometimes also referred to it by councils or others.
Although the consultancy often coordinates the whole development process – including legal and financial arrangements, design, coaching the group through decision-making processes, contracting and eventual sales or rentals - its aim is to put the future homeowners in charge of decisions. It also often works with housing associations to provide a financial and administrative ‘backstop’ for projects.
De Regie also maintains a website designed to support private homebuilding across the Netherlands – www.zelfbouwinnederland.nl - as well as a database of common enquiries and group project best practice. One of the principal aims of the web-based media is to collate all of the municipal project opportunities to make it easier for groups to engage.
Groups can pre-purchase ‘credits’ - these give them access to the database of common enquiries. The credits can also be used to commission De Regie to find out or develop an answer that isn’t currently available – such as a model document or overview of funding streams in a particular part of the country. When the response has been generated, it becomes part of the database and is available to all the other groups.
Resourcing and business model
De Regie employs four full-time staff, who are involved with around 20 projects at any one time, each of which usually takes about two to three years to complete. The consultancy is also supported by a network of freelancers.
The core staff have backgrounds in urban design and the financial and legal side of development management.
The organisation is receives no public subsidy and its fees are roughly equivalent to that of an architect. It usually supports groups during three phases of work: -
- The first lasts from the initial contact with a group until an option agreement has been secured for a site. The firm charges an hourly rate during this phase, as each group’s needs can vary significantly – but, on average, this phase usually requires about 30 hours. This work includes helping to get groups organised and assisting with seeking finance
- The second ‘development phase’ follows the project through until the start of work on site. It normally negotiates a fixed fee for this phase, dependent on how much work it needs to do, and how much the members of the group want to do themselves
- The third phase is the ‘realisation phase’ and covers the construction of the homes ready for occupation. This is also usually priced on a fixed fee basis with a schedule of work
For more information see www.deregie.nl
Castricum municipality puts a call out for proposals to develop a starter-home scheme for local people
The first proposals for the project are submitted to the local council – De Regie is selected on the basis of its proposal to enable the future residents to take the lead in the development using a ‘CPO’ model
Marketing campaign to recruit young people in Akersloot – 59 people come forward and 20 are initially selected
The group is officially constituted as the Free Spirit Foundation (‘De Vrijegeest’) and two further members are recruited to make the project more viable. The group selects Kerssens De Ruiter as its architect
De Vrijegeest sign a development agreement with the council, with a housing association party to the agreement to provide a guarantor for the project
Demolition and site clearance begins
Construction begins on the new homes
Homes are completed
This case study was compiled with reference to the following sources:
Marcel Kasien – De Regie
The following case studies may also be of interest:
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