Case study type: Políticas y regulaciones

Landsbyggefonden – the Danish national fund for non-profit housing

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Landsbyggefonden – the Danish national fund for non-profit housing

Policies and regulations National policies
Financing Financial actors Mortgage systems Public funding Progressive financing

Main objectives of the project

Denmark boasts a rich history of social housing, characterized by a unique approach that extends beyond solely catering to low-income individuals. Through a system of non-profit housing organizations, the country has fostered a model of affordable housing accessible to individuals across all income brackets. One of its most notable innovations is the Landsbyggefonden, a fund that facilitates a self-financing model for these non-profits. Once mortgage obligations are fulfilled, tenants' rents contribute to the fund, enabling the construction of new buildings or the implementation of necessary improvements.

Date

  • 1967: Implementation

Stakeholders

  • Landsbyggefonden

Location

Continent: Europe
Country/Region: Denmark

Description

Social housing in Denmark is a fundamental pillar of the country's welfare system, designed to be non-profit and inclusive, fostering a diverse tenant mix for the benefit of individuals and society as a whole. Its primary aim is to provide affordable housing to all those in need. Presently, nearly one million people in Denmark—equivalent to one in six residents—reside in social and affordable housing, comprising approximately 600,000 housing units. Moreover, the proportion of social housing per capita continues to rise.

At the heart of Denmark's affordable and social housing model lies the National Building Fund, known as Landsbyggefonden (LBF). Established in 1967, LBF is instrumental in maintaining high standards of housing stock and enhancing tenant well-being. It also plays a pivotal role in counteracting economic downturns, such as the COVID-19 pandemic recovery efforts. Financed by tenant rents from non-profit housing organizations, LBF supports the expansion of affordable and social housing, as well as the renovation of existing properties.

Under the LBF framework, when mortgage loans for housing construction are repaid, tenants continue paying rents at the same level, with any surplus contributing to the fund as savings. This pooled resource is then utilized to finance the construction of new affordable and social housing units, as well as the refurbishment of existing ones. Such renovations encompass improvements to both interior and exterior spaces, the modernization of buildings to ensure accessibility for the elderly and disabled, and energy efficiency upgrades. Additionally, the fund covers demolition costs in socially vulnerable housing areas and supports infrastructural changes.

LBF serves as a vital mechanism for ensuring self-financing within the social and affordable housing sector, with savings being reinvested to maintain and enhance dwellings and to provide additional housing opportunities. By establishing a closed financial loop, it reduces the government's need to continually invest in new social housing and facilitates long-term planning for housing funding. Furthermore, it helps mitigate disparities in financial strength among various social housing providers and in the development costs of different estates, thereby influencing rental rates to reflect development expenses.

The fundamental goal of the Fund is to foster socially cohesive, safe, and sustainable communities, with a particular emphasis on investing in social activities and reducing rental prices. These endeavors are often organized through local partnerships involving schools, municipalities, or non-governmental organizations, with the aim of promoting employment opportunities and improving educational outcomes for tenants.

Managed by a nine-member board comprising representatives from housing organizations, tenants, and the two largest municipalities in Denmark, the budget of LBF must be approved by the housing minister to ensure effective governance and oversight.

After the success of Denmark, the idea is being used in other countries. In fact, this model is also used in Austria, with the Equity investment funds.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Rent control in Catalonia

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Rent control in Catalonia

Policies and regulations National policies Local policies Governance Price control

Main objectives of the project

In 2020, Catalonia (the region of Barcelona) implemented a restrictive rent control mechanism. Defining a price index in the area, depending on the features of the unit, any owner could surpass the limit of it. By doing so, in the year the limit was set in place, the prices decrease compared to other areas without the regulation.

Date

  • 2024: Implementation
  • 2020: Implementation

Stakeholders

  • Metropolitan Government of Barcelona
  • Catalonia's Government

Location

Continent: Europe
City: Barcelona
Country/Region: Barcelona, Spain

Description

Barcelona, as a global city, faced a big challenge: housing rent. The city has a low social housing stock and private owners had a lot of power to determine the price of the rent. As a result, a speculative increase on the rent was set in place. To avoid it, the government of Catalonia implemented a rent control that became one of the most restrictive ones in Euroe

In 2020, the Catalonia Government created a price index for each area of the country. The price index was based on the features of the building and the rent currently paid in the zone (in new and old contracts). Then, all new contracts made in the zones must be lower than the index. There were fines for non-compliance, ranging from EUR 3,000 to EUR 90,000 depending on the seriousness of the offence.

After a year in motion, the policy was overruled by the constitutional court. The argument was not about the content, but about the legal power Catalonia had to do the regulation. For this reason, in 2024, Catalonia promoted a new rent control based on the legal framework of the Spanish State. In this case, the price index only affects owners of more than 5 housing units. For the rest of landlords, the limitation is that the new contract cannot be above the old one.

Although it is too early to assess the new regulation, the one in 2020 has proved to be effective. Doing a diff-in-diff analysis, the Observatory of Metropolitan Housing (the public agency responsible to assess housing policies) stated that the regulation lowered the price for tenants during the year it was enforced.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Finques d’alta complexitat

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Finques d’alta complexitat

Mismatches Vulnerable groups Vacant housing
Policies and regulations Local policies
Financing Mortgage systems Supply subsidies Demand subsidies
Ownership and tenure Protection of social housing

Main objectives of the project

In Spain, refurbishment loans or subsidies that aim to help the most needed citizens have a high non take-up. In other words, subsidies for energetic improvements in the buildings usually end up vacant or in the hands of those who are not in most need. To tackle this issue, the Barcelona City Hall started the program “Finques d’alta complexitat” (High complexity properties, in english). The goal of the program is to have a proactive attitude of the administration and help those most deprived buildings to access to the loans or subsidies.

Date

  • 2019: Implementation

Stakeholders

  • Ajuntament de Barcelona
  • Foment de Ciutat
  • Vincle

Location

Continent: Europe
City: Barcelona
Country/Region: Barcelona, Spain

Description

During the 1960s and 1970s, Spain experienced a significant surge in social housing development. However, unlike traditional rental models, individuals who gained access to these properties became owners rather than tenants. This was facilitated by a system that allowed for the sale of affordable housing units. Over time, the protective measures on these properties, such as rent limits and restrictions on tenants, were lifted, effectively transforming occupants into unrestricted owners. Consequently, a complex issue emerged wherein low-income owners found themselves residing in deteriorating properties in dire need of renovation.

To address this challenge, Spanish authorities initiated various subsidies and public loan programs aimed at facilitating building refurbishments. However, these initiatives faced considerable challenges, particularly in disadvantaged neighborhoods and among low-income property owners. In those communities, non take-up issues emerged. Social complexities within these communities, such as squatters and elderly residents, compounded the issue. Additionally, many individuals lacked the necessary understanding of how to navigate subsidy programs, while others struggled to afford the financial contribution required for refurbishments due to their precarious financial situations.

In response, Barcelona implemented the "Finques d'Alta Complexitat" program as part of the broader "Pla de Barris" initiative, which focuses on revitalizing deprived neighborhoods. Unlike previous approaches, this program offers subsidies covering up to 100% of refurbishment costs, contingent on the socio-economic profile of the residents. However, the key innovation lies in the proactive engagement of the public sector with the affected communities.

Rather than simply announcing the availability of subsidies, representatives from the city hall, including social workers, architects, and technicians, actively visit the targeted buildings to engage with residents. This interdisciplinary team assists residents throughout the refurbishment process, addressing any barriers or concerns that may arise. By fostering community cohesion and facilitating communication, this approach has not only increased participation in the program but also mitigated potential conflicts, such as rent hikes post-renovation.

Furthermore, the program has contributed to the preservation of social housing by converting vacant or new units into rent-controlled properties managed by the public sector. Since its inception, the "Finques d'Alta Complexitat" program has benefited 123 estates, providing support to 1,582 families and demonstrating its effectiveness in addressing the complex challenges of urban housing renewal.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Home Town Helsinki and the Hitas: Affordable housing in Helsinki

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Home Town Helsinki and the Hitas: Affordable housing in Helsinki

Mismatches Diversity
Policies and regulations Local policies Land
Promotion and production Public promotion Public-private partnerships
Ownership and tenure Shared ownership Protection of social housing

Main objectives of the project

Helsinki, Finland, boasts one of the largest inventories of public land in Europe, enabling the city to pursue an ambitious long-term strategy aimed at fostering affordable housing. The objective is to cultivate mixed neighborhoods, incorporating various housing typologies—whether ownership, market rental, or social housing—provided by the public sector. To achieve this goal, Helsinki is actively collaborating with the construction industry and introducing innovative regulations, including the revitalization of the Hitas system and the introduction of the "company share" model.

Date

  • 2016: Implementation

Stakeholders

  • Helsinki City Hall

Location

Continent: Europe
City: Helsinki
Country/Region: Finland, Helsinki

Description

In 2016, the City of Helsinki introduced the "Home Town Helsinki" long-term policy aimed at fostering a diverse mix of housing to cater to various needs and life circumstances. A central objective was to cultivate mixed-tenure neighborhoods throughout the city, setting targets for both rented and owned housing production in regulated and unregulated markets. Out of the 6,000 dwellings generated annually, 25 percent are subsidized and regulated rental housing, while 30 percent are unsubsidized but subject to regulated ownership, ensuring price and quality control. Helsinki's substantial public land ownership, coupled with conditional land leases, enables the city to pursue its ambitious goals of affordable and inclusive housing.

With ownership of 70 percent of its land area, Helsinki plays a significant role in providing and advocating for affordable housing. The city boasts a portfolio of 60,000 housing units, with 48,500 government-subsidized for rental purposes. Most new housing developments occur on city-owned property, with the municipality directly producing 1,500 dwellings annually, including 750 units of subsidized rental housing.

Housing transactions on city-owned land operate under the "company share" model, applicable to both owner-occupied and subsidized flats. Under this model, the exchange involves trading the company share rather than the title to the land and housing, a process managed by the city.

Helsinki employs a distinctive approach to ensure that middle-income families can afford to reside in all neighborhoods, including the priciest ones. This approach, known as the "Hitas" system, aims to reduce housing costs on publicly owned land. Hitas homes, typically priced below market rates, have an upper limit on selling prices. These homes are situated on rental plots owned by the city. The pricing of units is based on actual production costs, with maximum prices regulated by the city. The selling price is established when the plot is assigned for construction, and subsequent sales must not exceed this maximum price. Allocation of Hitas units is through a lottery system. While owners incur lower monthly costs, they also pay land rent fees. This scheme proves effective in areas where market costs surpass production expenses. For builders in Helsinki, developing Hitas units on public lands is the sole viable option, ensuring guaranteed sales despite lower profits due to high demand.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Tourist short-term rental regulations in Palma, Mallorca, Spain

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Tourist short-term rental regulations in Palma, Mallorca, Spain

Mismatches
Policies and regulations Planning

Main objectives of the project

The new modalities of tourism endanger our cities and the option to have affordable housing. Nowhere is this reality more clear than in Mallorca. For this reason, the City Hall adopted a new regulation to protect the multi-family buildings of the city. The ban was one of the most restrictive ones in Europe: no apartment can be rented to tourist in the whole city.

Date

  • 2018: Implementation

Stakeholders

  • Palma City Hall
  • Consell de Mallorca

Location

Continent: Europe
City: Palma de Mallorca
Country/Region: Palma de Mallorca, Spain

Description

Palma is located in the south of Mallorca. It is considered one of the most touristy cities in the world. The tourist activity has been built with to features: low-salaries (to compete with other destinations in price) and land speculation. Since the 2008 crisis, as in other cities in Europe, the speculative nature of tourism moved to short-term rentals of housing units. To avoid the harsh consequences, the city hall took a drastic measure.

In 2018, the city council of Palma introduced regulations to ban all tourist rental apartments in the city, leaving only a small number of single-family homes available for rent by tourists on a short-stay basis. This measure was disputed in court. In 2022, the city hall won the case at the Suprem Court of Spain.

The interesting part of the regulation is how they used a legal loophole to implement it. In 2017, the Balearic Island Parliament approved a new regulation for tourist rental apartments. In the new law, they stated the possibility of banning new short-term rental licenses. However, a territorial plan needed to be approve. Moreover, a complete ban was not possible. There was a mandate to specify which typologies of housing and in what zoning areas the ban could be introduced. Yet, considering the urgent need of regulation in some zones, either the regional government or, only for the city, Palma’s city hall, could enforce precautionary measures.

This “urgent” regulation was thought as an instrument to define a new and provisional zoning area of the city (such as its center) and for a specific type of building. For example, to stop a new big project of tourist apartments or hotels. However, Palma declared that all the municipality should be zoned as a zoning district with urgent need for banning short-term rentals. As for the typology of housing, they ban all multifamily apartments to be rented to tourists. We have to bear in mind that multifamily buildings are overwhelmingly majority in the city. So, by using the loophole, nearly every building in the city was affected by the ban.

The territorial plan, approved two years after the ban, respected the regulation of the city. The Palma experience gives proof of how legal loopholes can empower cities to take bold regulations to face the housing crisis we live in. Now, the houses thought as affordable for people are being protected.

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Opengela

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Opengela

Mismatches Vulnerable groups
Financing Supply subsidies Demand subsidies Sustainable development financing Public-private collaboration
Ownership and tenure Protection of social housing

Main objectives of the project

Emerging from the recognition that a significant portion of the population faced barriers in accessing traditional bank loans due to insufficient income and repayment capacity, the 'MAS OPENGELA' mechanism, combining public and private funds, provides loans with a 15-year repayment period. These loans aim to assist low-income households in fully financing home renovations. Additionally, OPENGELA facilitates coordination among neighbors for refurbishment projects and fosters dialogue among building owners to facilitate successful renovations.

Date

  • 2019: En proceso

Stakeholders

  • Constructor: Basque Government
  • Promotor: Bilbao Municipal Housing
  • Constructor: Bilbao/Bilbo municipality
  • Constructor: Eibar municipality
  • Basque Energy Agency (EVE)
  • Debegesa
  • Gabineteseis
  • Zabala innovation
  • GNE Finance
  • Housing Europe

Location

Continent: Europe
City: Bilbao
Country/Region: Bilbao, Spain

Description

In the 60s and 70s Spain build a large amount of social housing units. However, the vast majority of them were in a regime that after decades, the old tenant become the sole owner of the housing unit. Then, social housing stock has been reduced. As a result, all over Spain, low-income communities manage low-quality and old buildings in need of refurbishment, but without having the budget to tackle the deficiencies. The OPENGELA project wants to address this.

The main point of the project are their offices, working as One-Stop-Shops. Located in the neighbourhood of the refurbishment, in those offices, a multidisciplinary team helps the owners to manage their renovation. Basically, their work consists on, first, achieving an agreement among all the owners of the building to do the refurbishment. As condominium, to make the building accessible, there is a need on an agreement among the owners which is always risky and difficult when low-income people must do a financial effort to it. Secondly, the office guide the owners on how to access subsidies and financial help. All can be asked and managed from the office, reducing the inconveniences to residents.

OPENGELA serves as a prime example of a public-private partnership, comprising various public entities including the Basque Government, Basque Energy Agency (EVE), Bilbao Municipal Housing, and Debegesa, alongside two European-level organizations (FEDARENE and Housing Europe). The private sector is represented by three specialized firms: GNE Finance for financing, Gabineteseis for communication, and Zabala for European affairs. While Bilbao Municipal Housing and Debegesa have taken the lead on projects within the current setup, private partners such as GNE Finance and Zabala contribute expertise in novel financial instruments, as well as technical, social, and legal aspects to the consortium.

OPENGELA also offers financial support through MAS OPENGELA (Social Support System Fund) – a blend of public and private funds – which offers refundable loans in 15 years to help low-income households cover the investment needed to renovate their homes. This system helps residents cover 100% of the investment. The application process is streamlined: it not linked to life insurance, there is no cancellation fee, the payment deadline is up to 15 years and the nominal interest rate is 5.95% or 6.45% depending on the energy efficiency ambition. Moreover, the age limit was extended to access those loans. Now, access to them is up to 70 years old.

OPENGELA was first established by two pilot projects, one in Otxarkoaga (Bilbao) and the other in Txonta (Eibar). In the first case, work is done on five buildings encompassing 16 house numbers with a total of 240 homes. Other courses of action will also be undertaken from there, such as the refurbishment of the old shopping centre and the launch of business initiatives in premises which are currently empty. As for the case in Txonta, the pilot Project works on a total of 221 homes in 17 house numbers. The renovation will follow current standards of energy efficiency and accessibility. Te result is clear: more than 800 people have already benefit from the project. Furthermore, the financial solution has facilitated the uptake of building renovation in vulnerable areas without compromising the debt level of neighbours. On average, applicants allocate 26.20% of their income to cover debts with banks, which allows a low margin of debt to deal with financing. OPENGELA managed to mobilise private investment of 3.2 million €. Now the methodology is implemented in other locations.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Affordable Housing Bonus Program in San Francisco

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Affordable Housing Bonus Program in San Francisco

Mismatches Vulnerable groups
Policies and regulations National policies Local policies Planning Public-private initiatives

Main objectives of the project

San Francisco has faced challenges in ensuring affordable housing for its low and middle-income residents. However, through a reevaluation of California's Density Bonus schemes, a solution has been achieved. This involves providing incentives for the construction of affordable housing by allowing developers to surpass construction regulations.

Date

  • 2016: Implementation

Stakeholders

  • San Francisco Planning

Location

Continent: North America
Country/Region: San Jose, United States of America

Description

In California, the public administration does not have a lot of finance or land options to develop affordable housing. In a system relying on private investment, the USA and California have developed a way to push privates to build affordable housing. One of these options is the Density Bonus.

In a density bonus scheme, a developer is permitted to build a larger project on a site than would otherwise be permitted, in exchange for including specific elements such as a certain percentage of affordable housing units. In some cases, a developer can contribute land or funds for creating off-site affordable housing. In California, State law requires local governments to encourage housing development for all income levels and assist in the development of adequate housing to meet the needs of low- and moderate-income households. In 2016, the city of San Francisco revised its original scheme to adopt a 100 per cent “Affordable Housing Bonus Program”.

San Francisco encountered a significant issue with its density bonus scheme: the majority of housing units were allocated to low-income individuals, neglecting access for middle-income workers. Additionally, these schemes fell short of achieving the diverse mixture typical of a dense city like San Francisco. In response, the city introduced the "Affordable Housing Bonus Program" to address these challenges.

First, the program determines commercial corridors where developments can be made. The idea is to build in diversity and mixture of use. Then, the Local AHBP will offer incentives to project sponsors that elect to provide 30 percent or more affordable housing units on-site. Of this 30 percent, 12 percent must be permanently affordable to low- and moderate-income households and 18 percent permanently affordable to middle-income households. Projects that include 30 percent or more affordable units for low and middle-income households will be able to build more residential units and up to an additional two stories than currently allowed under existing zoning regulations. Yet, the Local AHBP includes special incentives for 100% affordable housing developments. These projects are generally built by non-profit developers, and usually require public subsidies. Projects with 100 percent affordable units will be able to build more residential units and up to three additional stories of residential development than currently allowed under existing zoning regulations.

This program goes beyond the State one, allowing for only one story more and having just a maximum of 20% of affordable housing.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

HomeLab: Integrating social housing and employment

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HomeLab: Integrating social housing and employment

Mismatches Vulnerable groups
Policies and regulations Local policies Public-private initiatives
Ownership and tenure

Main objectives of the project

Facing the housing problems also means facing a vulnerability issue. Without giving people the empowerment to maintain themselves, housing will continue to be an issue for those who struggle to get a job or who need social services support. For this reason, HomeLab designed a Social Rental Enterprise model that has been implemented in four Central European countries – Hungary, Poland, the Czech Republic and Slovakia. The model integrates the needs people face in the labour market and in the housing system.
HomeLab is funded under EU Programme for Employment and Social Innovation (EaSI).

Date

  • 2019:

Stakeholders

  • Metropolitan Research Institute (Városkutatás Kft.)
  • EASI programme
  • FEANTSA
  • Habitat Poland
  • Romodrom
  • Hungarian Charity Service of Malta

Location

Continent: Europe
City: Budapest
Country/Region: Budapest, Hungary

Description

The Social Rental Enterprise (SRE) model builds upon the foundation laid by existing Social Rental Agencies (SRAs) in various EU countries, including Belgium, Ireland, Italy, and France. These SRAs serve as vital mediators between private landlords and individuals facing housing challenges, facilitating affordable rental agreements for low-income tenants while providing assurances to landlords.

Expanding upon this groundwork, the Social Rental Enterprise model recognizes the intrinsic connection between housing and employment issues. It operates on the premise that addressing both concurrently is crucial for empowering individuals to maintain their homes and secure sufficient income. By integrating labor and social services with housing support, the SRE endeavors to break the cycle of poverty and bolster the sustainability of intervention outcomes, aiming to reinforce one another.

The SRE's core assumption is that enabling clients and their families to support themselves is essential for successful integration. By simultaneously addressing labor market and housing integration, the SRE strives to enhance clients' abilities to enter and sustain positions in the housing and labor markets. The provision of additional social services within the SRE framework further enhances clients' prospects for improved stability and security in these realms.

In the realm of housing services, the Social Rental Enterprise (SRE) functions either as the overseer of municipal housing stock, particularly if it owns or operates social housing on behalf of the municipality, or as an intermediary, facilitating agreements between landlords and tenants. As an intermediary, the SRE plays a crucial role in resolving issues such as stock availability, trust concerns, or excessive deposits. It acts as a guarantor for rent payments to landlords and offers affordable solutions to tenants.

Regarding labor services, the SRE operates along two axes: in-country labor mobility and local labor market integration. In regions with high labor demand, whether skilled or unskilled, there is a concerted effort to relocate potential employees from areas with limited job opportunities. This may involve not only interregional mobility but also assisting individuals in moving from remote towns with weak transport links to urban centers with a higher demand for labor. Employment services encompass networking with local employers, assessing human resource needs, and recruiting in areas with an excess labor force but limited job opportunities. Additional services aid in integrating mobile workers into their new environments. This effort necessitates coordination with both employment and social services in regions with weak labor markets. Additionally, employment services extend assistance to the local population.

The target demographic for these services primarily consists of households grappling with housing issues due to unemployment or unfavorable labor market conditions. Within this target group, the SRE prioritizes individuals or households lacking stable housing due to their precarious labor market positions. These individuals receive comprehensive housing and employment services from the SRE to prepare them for participation in available training and employment programs, facilitating their entry into the labor market and providing ongoing mentoring to stabilize their employment situations.

Social services constitute the third component of the SRE. In initiatives like the HomeLab project, social services are partly delivered through personalized case management by social workers and partly through collaboration with national or local institutions. Establishing partnerships with these entities and ensuring that clients receive entitled social benefits are critical tasks for the SRE.

This being said, there is a need to bear in mind that each country applied its own adaptation to the model. For example, Hungary focused on homeless people in Budapest. They, in the framework of HomeLab, provided housing for 20 households, and helped them maintain it through very thorough social work and labour market training. They also implemented the model of HomeLab in Veszprém, where the tourism of the nearby towns is rising the rents for tenants. The pilot is the largest one of HomeLab, involving 75 households, and focusing on different types of vulnerable groups including tenants of the municipal apartments of Veszprém, tenants accumulating arrears, homeless people, people moving into Veszprem in search of job opportunities and finally leaving detention facilites, people having lost the ownership of their apartments as a result of the financial and economic crisis… As for Slovakia, they have selected three microregions with Roma localities (the vast majority being settlements), where the living conditions and basic indicators are similar: most people live in low-standard illegal houses, the unemployment rate is 70% or higher, the acquired level of education is very low and for most of the families the main source of income are state social benefits. Czech Republic approach is based on the concept of help to move the households living in unfavourable housing (legal/illegal hostels, shelters, poor quality housing etc.) to standard housing for affordable price and to help them manage their financial situation by getting employment or other type of legal job. They act on 45 households in total.
The pilots are great examples of how we can handle complex communities with interrelated needs and tackle them with simple housing schemes and constant support, pursuing the empowerment of citizens.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

Prêt à impact- the Social and Environmental Impact Loan

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Prêt à impact- the Social and Environmental Impact Loan

Mismatches Financing
Financing Financial actors Sustainable development financing Public-private collaboration

Main objectives of the project

Caisse d'Epargne has introduced the Social and Environmental Impact Loan (Prêt à impact) to bolster the engagement of its real estate and social housing clientele in social and environmental causes. In this initiative, the interest rates of each loan will be linked to the non-financial social or environmental performance of the borrowers, with the potential bonus being directed towards supporting charitable associations.

Date

  • 2020: En proceso

Stakeholders

  • Caisse d'Epargne

Location

Continent: Europe
City: Paris
Country/Region: France, Paris

Description

Caisse d'Epargne, a longstanding private bank in France renowned for its investments in social housing and public sector ventures, aimed to incentivize its clients to adopt more ambitious social and environmental standards in their social housing endeavors. Drawing on these principles of the institution, the initiative introduces an incentive mechanism where social landlords can benefit from an interest rate indexed to their non-financial performance for each loan.

The bank's endorsement extends to both social and environmental criteria, encompassing social inclusion, disability support, aging population care, urban diversity, occupant health, energy efficiency, greenhouse gas emissions reduction, environmentally responsible practices, and sustainable mobility. Performance in each area is assessed through specific indicators. Should the client meet the predefined objectives annually throughout the loan term, they enjoy a rate increase, which they may choose to contribute to a charitable cause. In cases where objectives are not met, the contractual rate applies without penalty. Through this scheme, Caisse d'Epargne aims to recognize and encourage its clients' efforts in reducing their environmental impact and supporting societal causes, fostering more sustainable and responsible project developments.

It is worth noting that Impact Loans are available not only to social housing providers but also to real estate enterprises, with distinct criteria applied. Real estate entities focus on providing healthy and diverse housing options, while social housing emphasizes inclusion. In both cases, affordable housing schemes are fostered.

The inaugural Impact Loan was initiated by Caisse d'Epargne Ile-de-France in partnership with the Regie Immobiliere of the City of Paris, the second-largest social housing provider in Paris. This 25 million euro loan will cater to the needs of the social landlord, enabling it to secure an interest rate increase of 15 basis points by dedicating at least 20% of annually allocated dwellings to a priority population, as per French law. Both parties have agreed to allocate 50% of the bonus amount annually to a social housing foundation.

This scheme is hailed as highly innovative in Europe, notably for integrating non-financial performance into its mechanism. Similar initiatives exist in the Netherlands. Amidst the COVID-19 recovery phase, this French scheme facilitates social housing investment programs under optimal conditions while fostering a profound social commitment.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España

“Apartamentos Dotacionales” in the Basque Country- The Endowment Accommodation model

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“Apartamentos Dotacionales” in the Basque Country- The Endowment Accommodation model

Mismatches Services Diversity
Policies and regulations Local policies Land Planning
Urban Design
Promotion and production Public promotion

Main objectives of the project

The Department of Housing in the Basque Country is repurposing vacant plots designated for municipal facilities as per urban planning regulations. They are transforming these spaces into residential accommodations with leases extending up to five years. This innovative initiative aims to facilitate access to the housing market for young or socially disadvantaged individuals.

Date

  • 2006: En proceso

Stakeholders

  • Department of Housing in the Basque Country

Location

Continent: Europe
City: Bilbao
Country/Region: Bilbao, Spain

Description

Located at the north of Spain, the Basque Country faces a scarcity of both private and public rental accommodations, leading to a delayed residential emancipation for young individuals, often occurring after the age of 30. In response, a pioneering initiative was established in 2006 to repurpose plots designated for municipal facilities, thereby creating a novel housing solution known as the Endowment Accommodation model. These plots, initially earmarked for municipal use as amenities, compelled by urban planning regulations, have been transformed into temporary residential units. Thus, by using the limited options urban planning rules, the authorities managed to build on public land. Apart from developing services for the community, they offer a diverse typology of accommodation (usually less specious than a housing unit) that enriches the diversity of the project and densify cities.

This innovative approach has not only empowered numerous young people to achieve housing autonomy but has also addressed certain social housing emergencies. Over time, the demographic benefiting from this model has expanded beyond solely young individuals. Recent revisions to the governing by-laws now allow older individuals to access this housing temporarily. In exchange for participating in social rental programs by offering their own homes, older homeowners can access more suitable accommodations tailored to their needs—accessible, equipped, and modern. Simultaneously, other families can access larger housing units through social rental programs.

The evolution of this housing model towards publicly managed intergenerational co-housing represents a significant development, facilitating the release of other housing units for social needs. However, challenges persist, primarily concerning communication. Clear communication is essential both with municipal authorities, who may require clarification due to the unconventional use of land, and with the occupants of these accommodation units, who must understand the temporary nature of their lease, limited to a maximum of five years.

The Department of Housing has actively collaborated with municipal technicians and social services to address these challenges. Efforts have been made to streamline communication and transition tenants to more permanent housing solutions after the expiration of their leases. The model has also been a success in Barcelona and Madrid, showing it remains crucial for densely populated cities with limited available land, offering an innovative and much-needed solution to the housing crisis within the constraints of urban planning tools available to local authorities.

Links

Authors:

CSCAE Consejo Superior de los Colegios de Arquitectos de España