Mid-priced rental homes as a lubricant for the housing market

The importance of the mid-priced rental segment in the housing market is widely recognised. But can all good intentions be converted into concrete actions? BPD asked Cees Tip (Intermaris housing association), Huib de Mulder (Rabobank) and Daan Quaars (Breda municipality) about their vision of the mid-priced rental segment. What control buttons do they have at their disposal?

Cees Tip, Managing Director of Intermaris housing association

“Our corporation currently manages 200 rental homes in the mid-price segment. Some time ago, based on the idea of ‘every man stick to his trade’, we made a conscious decision to invest in social housing as much as possible. The government policy does in fact force us to do so. However, at the same time, we can, of course, see that the housing market in our region shows a strong demand for affordable rental homes with a price of around € 800 to € 900 per month. This concerns households with an annual income of up to a maximum of € 50,000 to € 55,000. You won’t be able to find a home for that in Purmerend and there is not much on offer in Hoorn either. This applies to starters and people moving up in the housing market, but certainly also to senior citizens. There are plenty of pensioners who can afford more than social housing and also realise sufficient equity when selling their current single-family home which is much too large. However, the supply of the right products that are desired is simply lacking. Consequently, people don’t move, which is understandable.” “The real big breakthrough in this field? That will only come when we stop favouring homeownership through the deduction of the mortgage interest. We must start treating all homes equally for tax purposes, whether they are owner-occupied or rental properties. No mortgage interest relief or rent allowance, but a housing allowance that only supports those people who really need it in terms of income.”

Competitive prices

“Meanwhile, it’s important to increase the supply of mid-priced rental properties. However, they must be competitively priced when you do. Offering a home of 40 square metres for € 900 per month isn’t exactly what we’re waiting for. We must try not to exceed € 12 per square metre. I understand that there is a dilemma for investors in view of the rising construction costs and the returns they want to achieve, but affordability really is paramount.” “I think the development of mid-priced rental houses is possible for a realistic municipal land price. However, in that case, investors do have to settle for a lower return. This is difficult for market parties, which is why housing associations can certainly play a role in this. Based on the logic that we have a role to play when the market fails, we can have added value. We can make the connection with social housing and ensure people moving up in the housing market, thereby creating more diversity in neighbourhoods. Especially in neighbourhoods where we hold positions ourselves and aim for differentiation. We are in fact currently working on this on a small scale. We are offering the first new mid-priced rental homes with a surface area of 65 to 70 square metres and a price of € 800 per month.”


“In the future, a dialogue with market parties such as BPD can also offer a solution: what can we do, what can they add? Area-wise, we can then discuss the various segments and coordinate them. We will do this in the city centres, within the framework of restructuring plans, for example, but we will certainly also have to develop locations outside the cities. We won’t get there with efforts aimed at city centres alone. This discussion really needs to be fired up more. We also need more mid-priced rental homes in ground-oriented housing.

Huib de Mulder, Housing Director of Rabobank

“Our objective is to help people live a financially healthy life. Rabobank is traditionally linked to having an owner-occupied home; homeownership plays an important role in wealth accumulation. But we are also active as financiers of housing associations and since last year, as investors in mid-priced rental homes. This means that we’re active on all fronts in the housing market and we are in fact emphatically looking for that width. We’ve identified a shortage of affordable rental and owner-occupied homes, and the group of house hunters between social housing and the owner-occupied sector is particularly stuck. Their access to the housing market has strongly deteriorated; a clear noise that we can hear in the consultation rooms of our local banks. We can hear the same thing from our partners such as municipalities and associations.”

“Various factors play a role in this; from tightening mortgage standards to making the labour market more flexible. One of the control buttons we use is the adjustment of our acceptance policy. For example, we make it possible for people who have demonstrably paid rent for three years to obtain a mortgage based on an assessment of actual costs. We’ve also introduced the generation mortgage. In addition, we are also investigating the possibilities of the mid-priced rental sector by combining affordable mid-priced rental homes with a savings product or by allowing customers to accelerate the build-up of capital by setting part of the rent aside for this. By doing this, we offer people a housing solution in the longer term. They can join us and start building on their housing career.”

Making steps

“BPD, our subsidiary, plays the most active role in this, by focusing on the development of mid-rental properties from its available locations, the vast majority of which feature a net rent of less than € 1,000 per month. For the time being, Rabobank has allocated € 1 billion to acquire the homes in a portfolio and that amount can grow over time to eventually reach a minimum of 15,000 mid-priced rental homes for starters, families and the elderly. We also want to motivate other institutional investors and investors to enter this market and work on such solutions. Together, we can then really start making some numbers. There are already 1,000 homes available in BPD Woningfonds; 500 have been put into operation and 500 will follow suit.”


“The savings product that we are now exploring and that we want to link to the rental properties makes it possible for our clients to build up capital. We help them with the discipline of regularly putting money aside so that they can purchase a home in the long term. The relationship with our cooperative roots is certainly also important in this context. It’s about increasing the financial self-reliance of the Netherlands, at a time when pensions are declining, care is stripped down and the accessibility of the housing market is under pressure. This product fits in perfectly with that. This certainly also applies to BPD, which traditionally pursues a social responsibility for high-quality and affordable housing. Internally and externally with partners, we examine social issues such as sustainability and living independently for longer. Within Rabogroep, we want to find the answers together. BPD as the largest developer in the Netherlands and Rabobank with access to customers and financial markets.”

Daan Quaars, Alderman for Building and Housing, Municipality of Breda

“Here in Breda, we are faced with an enormous housing challenge. Many people would like to live in this beautiful city. We have excellent sports facilities, you can go shopping and attend events here, but finding a home is an altogether more difficult story. The demand outstrips supply and then the market does what it does in times like this: prices rise. Outside the Randstad conurbation, we have the largest price rises and the highest prices per square metre. There is a shortage in all segments, but particularly also in the mid-priced rental segment. The 2018 administrative agreement therefore said: we as a municipality are really going to invest in this. Adding 6,000 homes to the city in four years, of which 30 percent in the mid-price segment. A clear objective our Municipal Executive can also be held accounted for by that time.”

Investing € 14 million

“We’ve started a number of initiatives to realise this ambition. Such as keeping subsidised owner-occupied homes and medium-priced rental homes affordable for longer. In addition, we enter into agreements with housing associations about their development production and we ourselves invest € 14 million in making plans feasible that are on the verge of the business case. We’ve also created area profiles for our city. Combined with data from Statistics Netherlands and the municipality, we use this to map out the characteristics of certain areas. All this to answer the question: how do we build the right homes in the right place? In principle, we can still build 13,000 homes in the existing urban area, provided this is done carefully. Incidentally, these data are not binding; it serves as input for the discussions with market parties.”

“We are currently in talks with various investors about the mid-priced rental segment. There is a clear interest in this and as a municipality, we’re rolling out the red carpet for that. As soon as we gain insight into concrete development locations, we apply our 100-day approach. This means that we lock ourselves away with the relevant market party. The plan and procedures must be completed within 100 days. This saves an entire year. Acceleration and intensification, that’s what the municipality of Breda is aiming for. And successfully so: plans are in place and construction is in full swing.”

Thinking along

“Regional cooperation is another point of attention. We’ve also approached our neighbouring municipalities with the invitation: think along and participate in this issue. The region as a whole has a development potential of 350,000 homes, which requires a joint approach. This has recently resulted in the first Regional Investment Strategy in the Netherlands. With that agenda in hand, we are looking at the Dutch central government to help obtain support from the housing market impulse. We can only tackle this complex problem, for which the easy solutions desk is closed, by applying this comprehensive and joint approach.”