Unlocking Affordable Housing Financing: Innovative Solutions for the Housing Sector

1. CECODHAS Housing Europe Madrid, 13/06/2014

2. About Us The Federation of cooperative, public, social housing Network of national and regional housing-provider federations • 4,500 public, voluntary housing organisations • 28,000 cooperative housing organisations 41 members in 19 EU Member States Manage 25 million dwellings Vision: Access to decent and affordable housing for all in communities which aresocially, economically and environmentally sustainable and where all are enabled to reach their full potential.

4. The cost of housing EU citizens are confronted with the “scissors effect”: they spend more and more on housing while governments fail to support the affordable housing sector despite the growing demand. Source: CECODHAS Housing Europe 2013, Rethinking investment in homes

5. The impact of the crisis • Changing housing demand • Decrease in public budget allocated to social housing • Reduced access to credit • Restructuring of social housing providers and sale of the housing stock

6. Financing social housing Market price DEMAND SIDE SUPPLY SIDE Affordable price Rent Total cost Rent/share paid by tenants Equity/ own capital It depends on history of affordable housing supplier Loan/bond Households expenditure • Better conditions if: • Public guarantee • risk sharing mechanisms • Good financial track records …. Housing benefits Land /Share… • Land at preferential price (or not) • Community land trust,…. • Or shared ownership… Social/protection policies counted as social expenditure • Public grants generally decreasing • tax advantages Subsidies Public support/expenditures Public support as guarantee, preferential price…

7. Our finance related proposals Unlocking the access to the financial market for social infrastructure should be seen as a long-term investment • Adapt the offer of financial products to the existing demand • Long-term affordable contractual conditions as a prerequisite to stabilize the housing market • Attract private financing through PPP models with societal added value

8. Some existing practices • Austria: Long-term public loans. • France, Finland and Germany: Loans with low subsidized interest rates. • The Netherlands, Finland and some German Länder: State’s endorsement. • England, the Netherlands: some operators have themselves graded by the rating agencies, assuring loans at better conditions. • Austria and England: Mechanisms to share risks. • Fiscal advantages to social housing providers in most countries. • The existence of intermediary/dedicated sources of funding (such as “Livret A” in France) is proving particularly effective in shielding the social housing sector from the current turmoil.

9. Unlocking of EU funds

10. European Structural and Investment Funds • Impose obligatory minimum percentages in the ERDF that must be invested in sustainable energy, including energy efficiency (from 12% for less developed regions to 20% for more developed regions). • More than double the funding allocation for Sustainable Energy and Energy Efficiency, to an estimated €23bn, under Thematic Objective n°4 “Transition to a Low-Carbon Economy”. • Expand the scope of eligibility for investments in energy efficiency in buildings beyond the ERDF to encourage investments also from the Cohesion Fund (where the housing sector was previously excluded) and the European Social Fund (supporting the up skilling of the labour force for green jobs). • Givethe possibility to use Funds to set up RenovationLoans.

11. ERDF - European Regional Development Fund • Ex: UNITED KINGDOM: The Housing Finance Corporation Limited (THFC) was allocated £12m from the London Green Fund (supported by the ERDF) in March 2013. • Loans to registered social housing providers • Up to now: 3 housing associations have secured overall £50 million loan • Environmental requirement: level 4 of the Code for Sustainable Homes

12. European Funding Structural Funds, H2020,EaSI, ERASMUS +, LIFE + Visit our webpage on EU Funds at www.housingeurope.eu

13. Looking forward Financial Stability and Housing: 5th November at the European Parliament, Housing Europe Finance Watch joint conference • The incentive structure within much of the banking sector has made ever increasing returns on investment the objective regardless of its effect in the real world. The financial system should serve the needs of the real economy. New regulation are all about protection of financial stability of banks. • The role of the public sector in putting the basis for a balanced housing sector is justified as long as the supply and the demand sides do not meet. • Purchasing power, reduced inequalities, and full participation in education and labour markets are politically desirable and can only be achieved if there is enough affordable quality housing to go around with the right mix of rental, owned, cooperative and shared ownership housing.

14. Our team SORCHA EDWARD Secretary General JULIEN DIJIOL Policy Coordinator ALICE PITTINI Research Coordination ALESSANDRO CESALE Project Officer MICHALIS GOUDIS Communication Officer ALICIA GOMES CAMPOS Membership Outreach and Event Organiser FRANCESCA ZAGANELLI Project Assistant EDUARD CABRéROMANS Research Assistant

15. Upcoming event The City of Tomorrow: The role of affordable & social housing providers 3-4 July 2014, Versailles, France More information on www.solardecathlon2014.fr