Social rental intermediation, although initially seeming paradoxical, offers a solution to the pressing need for affordable housing by incentivizing private landlords to make their properties accessible to vulnerable populations. This approach, with deep roots in Belgium and gaining traction across Europe, establishes a link between private landlords and marginalized individuals, facilitated by public or nonprofit intermediaries. These intermediaries provide incentives to landlords, such as rent guarantees and maintenance support, while assuming financial risks. Despite being primarily funded by public resources, social rental agencies have become attractive investments due to tax benefits and steady income streams. In Belgium, successful implementation has led to significant growth in housing units managed by Social Rental Agencies, particularly in Brussels where government incentives drive investment.

Initially, the notion of utilizing private rental housing for social purposes may appear paradoxical. After all, private housing is owned by individuals or entities expecting a return on their investment, rather than serving as a substitute for social landlords. However, in Belgium, a significant portion (70%) of private landlords are small-scale operators. Moreover, the private rental sector increasingly accommodates modest households, with over a quarter of European households dedicating more than 40% of their income to housing. This underscores the relevance and necessity of addressing social concerns within the private rental market as a matter of public policy. Even with political will to invest in and construct more social housing, several years would be necessary to realize such endeavors.

A solution to this challenge is social rental intermediation, a relatively novel approach in Europe but one with deep roots in Belgium. The concept involves incentivizing private property owners to make portions of their rental stock more affordable and accessible to vulnerable populations. Social rental intermediation establishes a connection between private landlords and individuals typically excluded from the housing market. This intermediary, often a public entity or nonprofit organization funded by public resources, offers incentives to landlords who agree to rent their properties at reasonable rates. In return, landlords benefit from guarantees related to rent payment and property maintenance. Conditions typically include granting the social rental agency discretion in selecting tenants and setting rents below market rates. The Social Rental Agency (SRA) assumes financial risks associated with unpaid rents and property upkeep. This may entail assistance with renovation management and other incentives, such as tax advantages. Beneficiary households can access social support services as needed, typically coordinated by the organization operating the SRA.

In Belgium, SRAs were established in the late 1970s and have since become institutionalized. For example, the SRA Logement pour Tous in Brussels originated as an initiative of a nonprofit organization to assist migrant families facing discrimination in finding affordable housing with the aid of social workers. These agencies have been supported by government sponsorship since housing legislation formalized their role in 1997.

SRAs are primarily funded through public sources, presenting a challenge. However, they have become an attractive investment for property owners, rental agencies, and government entities due to the shifting of financial risks and the assurance of steady income and tax benefits. In Brussels, significant investments, encouraged by fiscal incentives, are being made in constructing rental properties for intermediation purposes. This policy has proven successful in Belgium, with SRAs adding 6,500 units in the past four years alone.

In Brussels, 23 SRAs manage 5,500 housing units, with an annual growth rate of 10%. The success can be attributed to regional government incentives, including tax exemptions and reduced VAT rates on new dwellings. Major corporations are undertaking large-scale projects, often involving the construction of hundreds of units, presenting a significant opportunity for SRAs to rapidly expand their housing inventory. However, the incentives in Brussels typically require the availability of units to rental agencies for only 15 years.

Rental intermediation serves as a valuable short-term solution for rapidly increasing affordable housing stock. It taps into an essential segment of the housing system that may not otherwise be fully utilized and can enhance value through renovation, mobilization of private stock, and combating discrimination. However, it should be viewed as a temporary measure and not a substitute for social housing, which provides a long-term safeguard for affordable housing stock.