Round Table Affordable Housing & Assisted Living: Investing in affordable housing and senior housing attractive

September 29, 2025

_{This report was originally written in Dutch. This is an English translation.}

When investing in affordable housing and assisted living, impact plays a role alongside risk and return. There is also a distinction between regulated and unregulated housing, with the risk-return profile of the unregulated variant sometimes even proving more favourable.

By Hans Amesz

What do you mean by assisted living and affordable housing?

Paul van Stiphout: 'By assisted living, we mean compact homes of at least 45m² where light care can be provided, often supplemented with communal areas where activities take place. For investors, this is a form of care property with a broad target group and a relatively low risk profile, because it is less dependent on a single care provider and has alternative uses.'

Dillon Lorda: 'Senior housing in the United States can include assisted living, but also independent living. We have a long history of investing in this segment of the market from an institutional perspective. This is an area we have focused on because, as with low-income housing, there is a very strong supply-demand situation for senior housing, and low-income housing also offers attractive opportunities for generating attractive, risk-adjusted returns.'

Jeroen Heine: 'Assisted living is a form of residential care that provides primary support services to people who need help with daily activities such as washing, dressing, medication management and meal preparation, but do not need the level of service provided in a nursing home.'

Jaap van der Bijl: 'The interesting thing about assisted living is that it always tends to be aimed at the older age group. That is understandable; it has to do with the need for care and support. But we also look at other target groups, such as young people who are mentally independent but still need some support in their first career steps or family life. We make a distinction between the level of support and whether you, as a fund manager, can offer that through your external property manager or whether you carry out operational activities yourself.'

Onno Hoff: 'It's not really a separate asset class or niche. You have properties for young adults, but also properties for seniors, where you offer services and support.'

What can be said about affordable housing?

Heine: 'In practice, this means that the rent may not exceed a certain percentage of the average income in the area concerned. It also depends on the location of the residential properties.'

Hoff: 'In general, there is no typical definition of affordable housing. The Nibud states that 30% to 35% of income can be used for rent. This varies per region and per country. In England, for example, affordable is defined as 80% of the market rent.'

Lorda: 'In the United States, there is no consistent definition of affordable housing. I believe that most of the ways in which affordable housing is defined and the seemingly arbitrary quantitative terms used to segment the market miss the point. Most markets have a persistent shortage of housing for lower-income households. The income level at which the shortage exists and the size of the population that is underserved by the housing market varies from market to market. From an investment standpoint, it is attractive that there appears to be an insatiable demand for different types of housing and different price ranges. In the United States, we define 30% of household income as the threshold for what is “affordable”. In my opinion, the use of a single universal threshold of 30% of household income does not take sufficient account of the inelasticity of these incomes and how much money is needed to meet all other essential needs, such as food, healthcare, transport, and so on.'

The Dutch government has not acted wisely for us as investors: long-term investors are in the worst possible position.

What factors determine investments in affordable housing and assisted living?

Edgar Hertog: 'Mainly risk and return, but also impact. You see that many investors are looking more towards impact investing. They want to invest in these asset classes, also to diversify their portfolios. The ESG strategy will change over time, mainly because many investors and pension funds are looking at a longer investment horizon rather than the short term.'

Van der Bijl: 'I think the factors driving interest in affordable housing are predictable, such as excess demand relative to supply. In that sense, it is predictable how demographic trends will play out. In terms of location, that helps, because as an end investor you don't want any surprises. The driving force behind affordable housing is risk-return. You don't need the impact aspect, but it is clearly a positive element. Everyone seems to understand, or assume, that there is a real impact in residential. If you look at the current stock and build new homes, you can claim additionality in terms of impact. Everything you build will be very energy efficient. And you add affordability criteria to that, which you can define through regulation: target groups, incomes, and so on. Ultimately, you have to balance this double return between financial and non-financial.'

Van Stiphout: 'For me, the crux lies in the definition of impact. If you meet all the sustainability requirements in terms of housing investments, you can see from the data that building for the middle segment for middle incomes actually yields the best risk-return profile. You can then conclude that you are “automatically” making an impact. But for us, impact investing goes a bit further than that: it means measurable social value that is in line with the objectives of customers.'

Van der Bijl: 'If you respond better to the ultimate beneficiaries, a distinction can be made between regulated and unregulated housing. Both create impact. The risk-return ratio on the unregulated side may even be better.'

Lorda: 'When it comes to housing for lower incomes, if you invest with a long-term orientation and a holistic view of physical real estate, you are naturally inclined to generate meaningful positive social and environmental externalities, or impact, and that impact will be much greater than if you have a short-term, value-driven investment strategy.'

Van der Bijl: 'With that in mind, I have come to the conclusion that you have the greatest impact in the unregulated sector, as regulation naturally enforces certain social externalities. It is in the unregulated sector that you compete with an investor who may drive up rents or turn that property into something completely different.'

How are affordable housing and assisted living positioned within institutional portfolios? Is it primarily classified as a property investment, an impact investment, or both?

Hoff: 'I think differently about the additionality of new construction because simply adding more buildings is not enough. Where is the extra effect? If we invest in an existing building and make it Paris Proof sustainable, we reduce energy costs, for example. Then you really achieve impact and do more than just build new buildings. After all, the latter is more a result of buying more new houses than it is an extra investment in sustainability.'

Van der Bijl: 'We are on the Paris Proof roadmap to adapt the current stock. We see that in terms of regulations and also in terms of ESG, this is hardly expressed in value, at least not in capital value. The challenge is to achieve a solid return when investing in sustainability in your existing buildings. In addition, at least 70% of tenants must agree so that sustainability can be implemented. A small rent increase may be necessary to see part of the investment reflected in the value of the building. We minimise the risk and create small green pearls in our oyster, and hopefully the valuation will rise.'

The unregulated sector is the sector where you have the greatest impact, as regulation naturally enforces certain social externalities.

Lorda: 'Can you use equity in the Netherlands to develop housing that is affordable for households with extremely low incomes without subsidies? In the United States, that segment of the market is served almost exclusively by non-equity, non-return-oriented capital.'

Hoff: 'Yes, you can, and sometimes you have to, because most zoning plans have percentages that go to social housing, mid-range rentals or the unregulated sector. So sometimes you are more or less obliged to also provide social apartments or social housing if you have a good position in an area.'

Van Stiphout: 'Ultimately, there are significant differences in how institutional investors view affordability, whether as a regular investment or as an impact investment. But what we always emphasise in our discussions is that, ultimately, it's about the supply problem. Whether you want to invest in affordable housing, higher segments, assisted living or niches such as student housing, it's all necessary.'

Heine: 'The family offices we work with have a lot of confidence in the development of this type of investment opportunity. It is still a niche market at the moment, but that is precisely what makes it attractive. As long-term investors, we see opportunities to make more of an impact. I expect this to become a growing investment category for many family offices, especially in the Netherlands.'

Hertog: 'Internationally, Senior Living is still an immature market when compared to Purpose Built Student Accommodation, or PBSA. The reason for this is the operators. The scalability of the operators is not great enough, so you don't have the large players that you see in the PBSA market. This makes it difficult for investors to understand the market. What you see now is that investors are mainly making domestic investments. It's not the case that someone from South Korea or the United States is investing heavily in Senior Living. In order for the market to grow and mature, it is important that, together with investors, operator scale and scalability are achieved. Does this mean that you are looking more at a European product? Yes, okay. Our strategy has always been European-focused, not focused on one country. That is also the risk profile. When we invest, we try to do so across Europe. Of course, we sometimes exclude countries because of hedging or legislation. Countries that are currently interesting are Spain, Italy, Sweden and also the United Kingdom. The main reason for the latter is political: the legislation is fairly stable over time. Compared to the UK, the Netherlands and Sweden, the markets in Italy and Spain are still a little immature. But good steps are being taken there, so that the development towards greater maturity is progressing rapidly. Many investors are going to Spain. The Dutch government has not acted wisely for us as investors: long-term investors are in the worst possible position. Everything from affordability to legislation and taxation does not help us make the right decision to invest in the Netherlands. I would not say that we are not investing in the Netherlands, but we will be very cautious.'

Hoff: 'I would like to promote the Netherlands. We have seen too many changes in a short period of time. In terms of regulation, we are in the middle compared to other European countries. Incidentally, it is not so much about where you are in terms of regulation, but about the number of changes. There is more stability in the number of changes than in the regulations themselves. Something needs to be done about this, especially for foreign investors.'

Hertog: 'That's right. There are major differences between Dutch pension funds and international pension funds, especially in terms of taxation, which means our returns are lower. To attract more investors, I would want to tackle that first. It's mainly tax-driven. Legislation is always changing everywhere, that doesn't matter to us, but taxes are important because they are the long-term driver for investment. Politicians see real estate more as something to be penalised than as something from which to derive benefits.'

There is more stability in the number of changes than in the regulations themselves. Something needs to be done about this, especially for foreign investors.

Van der Bijl: 'I understand the point, because it does not attract foreign capital, and we absolutely need to be able to attract that in the housing market. I like regulation because it makes a clear distinction between good and bad things you can do, and the premium you can get. There is risk everywhere, and if I can get the premium, that's fine. Regulation makes a distinction. The question is whether there is a premium to be gained. That's how we look at it. Whether it's a risky country or not, we don't rule anything out, not even the Netherlands.'

Are there any preferred countries for investing in Essential Living? Can a comparison be made between the United States and Europe?

Lorda: 'Unfortunately, the high demand for housing for lower incomes is not limited to a specific region. The common underlying question is: does the imbalance between supply and demand offer opportunities to generate an attractive risk-adjusted return by creating or maintaining housing for underserved households? In many countries and markets, the answer is 'yes”! The strategy I am working on focuses on the United States, but I know that some of my colleagues are also looking at Europe.'

Van Stiphout: 'Some regulation is necessary to protect the bottom end of the market, but too much regulation is counterproductive for the investment climate. Finland shows that a lighter approach can work well, while the Netherlands and parts of Germany, for example, go so far that you might wonder whether we are still solving the right problem. Namely, increasing supply.'

Lorda: 'Walter Wristol once said: ‘Capital goes where it is welcome and stays where it is treated well.’ Uncertainty and barriers, for example in the area of legislation and regulations, come at a price. Households are generally better served by incentives to create more supply of all kinds than by heavy sanctions for supply that does not serve the target group, or by a better combination of restrictions and incentives.'

When it comes to impact, there is always the discussion: do you want to make an impact close to home, or does the location not matter because you want to do good for the whole world?

Heine: 'We have a geographical focus for direct investments in the Netherlands, Belgium, and perhaps Germany. For our fund investments, we focus on Europe. We invest directly in the Netherlands because we know that market and can make an impact there. As far as the funds are concerned, we discuss their impact agenda with the fund managers. Sometimes we are given a position on the impact board so that we can influence their decisions.'

Hoff: 'In terms of impact investing, we started with infrastructure and solar parks. Now there are more and more new funds that also focus on real estate. From a national perspective, I would say: invest in the Netherlands, because many tenants are the same people we invest for indirectly, namely the participants in Dutch pension funds.'

Van der Bijl: 'What we are doing today, partly because you see changes in the political attitude towards ESG, is trying to shift the value proposition of ESG to issues that people and capital providers easily understand: affordability, which benefits a clearly defined interest group, namely tenants. It doesn't make much sense to go to the tenants in an existing building and say we're going to save the world. What I need to do is excel in executing the skills we have and future-proof the portfolios and the platform. Of course, investors decide where they invest. If they think they can have more impact on climate mitigation elsewhere, reallocation is an option.'

Households generally benefit more from incentives to create more supply of all kinds than from heavy penalties for supply that does not serve the target group.

Hoff: 'Let's be more ambitious. We often focus on the E in climate change, but we should also do more with regard to the S. That means lower energy costs and healthier homes. And in senior living, you can reduce healthcare costs in the Netherlands by creating better products closer to healthcare services. Impact is added value; make it measurable and give it value, whether financial or social.'

Van der Bijl: 'You can set a good example and demonstrate best practices. That helps to integrate ESG into a broader network and also helps with valuations.'

Hoff: 'I completely agree. We need to help each other bring more impact capital to the market in order to really focus on impact goals and make them measurable.'

Van Stiphout: 'Capital and impact should not be exclusive, they should not be mutually exclusive. Impact capital should be rewarded with an appropriate return. We need to make it clear that impact investments really do deliver returns commensurate with the risk.'

If assisted living scores well in terms of both returns and impact, why isn't there much more investment in it?

Van Stiphout: 'Assisted living is an interesting category, but it remains a relatively small-scale and complex market. Locations are scarce and cooperation with care providers is essential. As a result, capital is less likely to move here than in regular housing construction. But we also see obstacles there, such as the unfavourable tax climate in the Netherlands.'

Can we achieve the Paris targets with lower rents and margins in affordable housing?

Hoff: 'You need value. Underlying value, vacant value or renovation value. There is increasing evidence that it pays off. After a renovation, there is a different valuation. With existing properties, you cannot increase the rent as much as you would like. The termination rate is extremely low with low rents. This makes it more difficult to make adjustments. The business case for label D is still there, but after that it becomes more difficult.'

Van Stiphout: 'Almost 90% already have label A or higher. The marginal return on additional CO₂ savings declines rapidly. This makes it more difficult to justify large investments. I must say that the property valuation system now rewards energy-efficient buildings. That is a good thing.'

How do we prioritise making the existing housing stock more sustainable?

Hoff: 'Approximately 85% of the homes that will exist in 2050 are already there. That is where the problems with energy and affordability lie. Existing buildings are less attractive, the business model is difficult, data is lacking and valuations are not up to standard. So there is a challenge there, and this should be given more priority.'

Heine: 'Redevelopment of religious buildings, such as monasteries and churches, and cultural heritage, old buildings, is circular in itself: no demolition and new construction, less use of new materials.'

Hertog: 'Renovation from D to A label should be much more economical in terms of CO₂ emissions compared to new construction, so renovation should clearly be high on the agenda. Valuations and transfers stand in the way of renovation.'

Van Stiphout: 'Legislation and regulations are forcing improvements. Poor EPC (energy performance coefficient) labels will soon no longer be allowed to be rented out.'

Van der Bijl: 'The valuation industry needs to develop better tools to explain and assess sustainability differences. Reference transactions are often unclear due to all kinds of deal structures.'

Building for senior citizens who are currently unable to find suitable housing sets off a chain of relocations. This also frees up more housing for young people.

Hoff: 'Valuers adhere to the red book: market transactions. If these are not available, it is difficult.'

Lorda: 'The market does not price environmental externalities appropriately and, as a result, sustainable building characteristics are not reflected in transaction values.'

Van Stiphout: 'With physical climate risks, such as in Hurricane Alley in the United States, you do see this happening: insurance costs rise, coverage decreases and assets become uninsurable. This is not yet the case with CO₂. The market does not price it adequately, but we do expect this to happen in the long term.'

Van der Bijl: 'The industry wants to integrate ESG into leadership and represent value correctly in order to continue to attract capital.'

Van Stiphout: 'It depends on the time horizon. We see financial returns in ESG investments within our investment horizon, but it is difficult to predict when the value will become visible.'

Lorda: 'With a short-term investment strategy, you think differently about external social or environmental effects and costs than you do with a ten- to twenty-year business plan. With a long-term plan, you are more inclined to invest in energy efficiency and other characteristics that affect cash flow but may have less impact on sales value.'

Hoff: 'There are more questions from pension funds and advisors about sustainability and risks for the future. It is not yet reflected in the price, but people recognise it.'

Van der Bijl: 'What is 'best use”? Does best use comply with regulations and ESG? Market transactions that do not comply with this should not be used as a reference. We are large enough to capture a significant share of the market.'

Wouldn't it be better to build affordable homes where land is cheap, so that you can build more of them? For example, wouldn't it be better to build twenty homes in the region than five homes in the city?

Heine: 'Perhaps, but you need to know the local needs and circumstances.'

Hoff: 'It is more attractive within the city than in the suburbs because of the higher exit value. The impact is greater with twenty homes than with five, but in the long term, inner-city locations are important, also for people who have to live in the city.'

Van der Bijl: 'You have to carefully investigate which neighbourhoods have potential. Tenants' preferences are often idealistic and unrealistic in terms of price.'

Van Stiphout: 'The dynamics on the outskirts of the city are significant in this respect. Families are moving there. Life in the busy city is less suited to them.'

Lorda: 'Both strategies are necessary. Location characteristics such as access to amenities such as good schools, grocery stores, healthcare, etc., also determine the value for the customer and the impact on expansion.'

Van de Bijl: 'Given the demand and the size of the region, I would prefer twenty homes in the suburbs to four in the city. Incidentally, young people are struggling at the moment. They have little chance of finding a home, and that is damaging to society. The focus is too much on housing for the elderly. Young people deserve more attention in that regard.'

Van Stiphout: 'I think a holistic view of the housing market and consumers is justified. It's not either/or, it's both/and. Building the right product for seniors who are currently unable to find suitable housing not only helps that target group, but also sets in motion a chain of relocations. This also frees up more homes for young people.'

Investment in housing for middle and low incomes must be driven by demand from potential tenants.

What strategies can we implement to improve mobility in social housing and assisted living and ensure that these homes remain accessible to those who really need them?

Hertog: 'The main question is: how do we ensure greater mobility and housing turnover so that people do not remain stuck in their affordable homes? Because I think that around 8% of tenants no longer belong in those homes; they should be living somewhere else. Of course, we cannot force them to move, but it is a problem that we need to address. Above all, more homes need to be created; that is crucial. But we certainly also need to look at turnover in housing.'

Hoff: 'It needs to be made attractive to move on. That could be done with the product itself, but perhaps also with a negative incentive, such as rent increases based on income.'

Hertog: 'Indeed, it must be made attractive to take that step. I don't know exactly how it works in the United States, but with mid-range rentals, tenants” income is checked at the start. If their income is too high, they are not allowed to rent the property. However, how often do you check something like that? It's only done once. If someone starts earning a lot more after that, or receives a large inheritance, for example, they don't have to move out.'

Lorda: 'The American rental market is very large and very liquid. The average turnover is 50%, so people move every two years on average. The lower the rent, or the greater the value proposition of the property, i.e. the greater the difference between the rent paid and what it would otherwise cost to live there, the less likely people are to move. We have properties with a turnover of 2% to 5% because they offer such good value for the resident. Our housing policy should be aimed at ensuring that people who start out in affordable rented accommodation on a low income eventually progress in terms of income and wealth to such an extent that they can move on. There are currently rules that discourage this, by setting arbitrary limits on costs and subsidies. I would like to see more capital made available, on more appropriate terms, and fewer barriers to the creation of new housing, so that we as investors can meet the different types of demand: whether it is a firefighter, teacher or nurse who wants to live in a certain place, or a household with a very low income. We should be able to realise, own and manage that housing product in a way that really meets people's needs. And I believe that those people themselves should determine what they need and where they want to live, not politicians as regulators or us as investors.'

Would anyone like to make a final comment?

Van Stiphout: 'When it comes to housing, mobility and affordability, it's not black and white. Ultimately, it's about creating more supply across the board, because that's the key to a better functioning housing market. This presents a social and financial opportunity for institutional investors.'

Heine: 'For us, investing in housing for middle and low incomes must be driven by the demand from potential tenants and by a holistic approach to their living conditions and needs. That is what ultimately leads to the best risk-adjusted returns and the most positive outcomes for these tenants. We deploy our capital where we can make the greatest social impact.'

Hoff: 'I think we have a housing crisis in the Netherlands. As a sector, we should unite and tell the government and politicians what they need to deliver on. Only together can we solve this.'

Van der Bijl: 'It's a puzzle. Don't talk about it too much; the puzzle will solve itself if you start at the edges and slowly build up the picture. We, as a sector, need to start doing that.'