IVBN: The price of community management
This column was originally written in Dutch. This is an English translation.
A residential building does not in itself constitute a community. Community management is what makes shared facilities valuable. However, the tightening of the rules on service charges is putting this social added value under pressure.
By Simon van der Gaast, Senior Policy Adviser, IVBN
In an increasing number of housing concepts, social interaction is not an afterthought, but an integral part of the design. Anyone wishing to foster social interaction must also make it possible. This clashes with the tightening of the rules on service charges. Community management can no longer be funded through rent or service charges, but requires separate agreements with residents. This creates uncertainty about long-term funding and makes it more difficult to secure a community manager’s long-term commitment to a housing concept.
Community management facilitates interactions that would otherwise often not occur. It lowers the barriers to people seeking each other out and helps to combat loneliness. It also ensures continuity. New residents are shown the ropes, communal spaces are brought to life, and residents realise more quickly what is possible within a building. This contributes to social safety and quality of life, as residents get to know one another and find it easier to approach each other. For investors, this directly impacts the future value of the housing product.
Where community life becomes vulnerable
Communal facilities require maintenance, digital support and professional guidance. Under the new service charge regulations, these costs can no longer simply be included in the rent, certainly not for rent-controlled properties. Without structural funding, community management becomes reliant on temporary solutions, whilst it is precisely the long-term approach that is needed for a building to function effectively as a community. If these costs can no longer be covered collectively, it becomes more difficult to combine affordable housing with high-quality shared facilities.
The rationale behind the tightening of the service charge regulations is understandable. The government wishes to better protect tenants against unclear or excessive service charges. Past abuses have shown that strict rules are necessary. However, if all supplementary services and facilities are judged by the same yardstick, a new risk arises. This would also affect concepts that residents value and that contribute to social cohesion, quality of life and affordable housing with shared spaces.
Regulations that recognise good concepts
The question is therefore not whether everything should simply be funded via service charges, but whether regulations allow scope for housing concepts that demonstrably contribute to social objectives. If professional parties are prepared to bear part of the costs themselves and residents gain access to valuable facilities for a limited contribution, this calls for a nuanced approach rather than a blanket ban.
Predictability is particularly important for institutional investors. Anyone investing in homes with shared facilities must be able to assess how management, services and facilities can be financed sustainably. Social quality is not an afterthought, but an integral part of a building’s quality and operation. If the financing becomes uncertain, not only does a cost item disappear, but so does part of the value that makes the housing concept distinctive.
Room for social value
We want to combat loneliness, strengthen neighbourhoods and enable people to live independently for longer. But to do so, we must also accept that community-building comes at a cost. Not an exorbitant one, not an opaque one, but a structural one. Regulations must prevent abuses, but also allow scope for concepts that demonstrably add value. Because if we truly value social interaction, we must also make it possible for someone to organise such interaction.