HELSINKI, STOCKHOLM, AMSTERDAM How to stimulate housing production? An exchange of experience This report is part of the collaboration of the cities of Helisnki, Stockholm and Amsterdam and written by mr Cor de Jong, by the development corporation, city of Amsterdam. [email protected] Copyright of this research lay with the Development Corporation Amsterdam. This research can be used in other publications with mentioning the name of its owner: The Development Corporation Amsterdam. 1 European cities learn from each other: Helsinki, Amsterdam and Stockholm exchange experiences in order to stimulate housing production. Background Housing production has been a hot topic in a number of European countries for some time. In the Neth- erlands, the concern about achieving the objectives at both national and local levels has led to policy initiatives and to adjustment of the available instruments. Research shows that housing production in various European cities is at the least an area of attention and sometimes also a source of concern. In a joint project, the European cities Helsinki, Amsterdam and Stockholm exchanged knowledge and experience. The aim: can we learn something from each other in the area of promoting housing production? This article examines the interim results of the co- operative efforts. It first offers a brief description of how the exchange came about and what form it took in practice. The exchange in practice This exchange project came about more or less by accident. Representatives of the municipalities of Stockholm and Amsterdam who were attending an international conference in the autumn of 2003 hap- pened to start talking about what was going on in their city. Housing production came up in the conver- sation and it was quickly established that this topic was high on the political agenda in both cities. An exchange therefore seemed worthwhile, including Helsinki, since that city has a comparable policy fo- cus, which has already produced interesting results. Intensified contact in the spring of 2004 led to the plan to organise reciprocal working visits to discuss the themes and their component aspects. In that context, it is always useful to look at how policy aims lead to instruments and to concrete results. In other words, reviewing projects needed to be a fundamental part of the programmes! The first working visit took place in Amsterdam in June 2004. It was explained that the Municipality of Amsterdam had set up a municipal housing construction supervisory bureau ( Bureau Woningbou- wRegie ), which was directly attached to the Municipal Executive. That bureau works to promote projects and provide central direction for structural and cultural changes. In addition, the Municipal Council tem- porarily made a relatively large amount of money available to overcome financial bottlenecks in produc- tion. After an explanation of the particular tasks facing Amsterdam, the group went on an excursion to the large IJburg new housing development site and to the already completed Oostelijk Havengebied. This made it possible to compare a neighbourhood largely shaped by the municipal authority in the second half of the 1980s with a new area in which the national government primarily determined the conditions in the second half of the 1990s. What is the significance of the fact that government influence has de- creased to such a large extent in the space of ten years? The solutions developed in the three cities to meet the authorities' wish for housing production were also discussed. Can solutions that work in one city also be applied in the other cities? Another working visit took place on the second day, this time to one of the large urban renewal areas in the west of the city: Parkstad. This visit highlighted the housing issue as a whole, i.e. the physical, eco- nomic and social aspects, and showed how the problem is being tackled in specific projects. The day was concluded with a discussion in which a number of private developers (both corporations and oth- ers) also took part. 2 The second meeting took place in September 2004 in Stockholm. The first day was set aside for a large number of presentations. Firstly, the organisation of the 20K project in Stockholm was explained (the aim of the project is to build 20,000 new homes in 5 years using a project-based approach). The expla- nation included the projects that are the primary focus of municipal attention to achieve production tar- gets and how the control mechanisms work. The following presentations then covered such themes as incentives for developers to build and methods used by municipalities when selecting developers. The first day was concluded with a visit to the major redevelopment site at Hammerby Sjöstad. The second day started with a debate about the demand side of the regional housing market and what role regula- tions play in housing production. After a discussion of the planning aspects, the representatives went on a tour of a number of new housing development sites in the southern part of the city. These were smaller urban renewal sites. The last meeting took place in early March 2005 in wintry conditions in Helsinki. After an initial informal excursion on the Sunday afternoon, the group was officially welcomed to Helsinki on the Monday morn- ing by the Mayor, Ms Eva-Riita Siitonen. The official welcome was followed by introductions to the hous- ing policy and housing production requirements in Helsinki and the way in which the land policy and the ground lease system are used in this regard. After an explanation of the way in which the municipality influences the relationship between market value, selling price and construction costs as regards part of the production requirement (HITAS), the first excursion took place, in which the representatives visited a number of major redevelopment sites just outside the inner city. The second day started with a bus tour of a number of projects slightly further away, after which the somewhat abbreviated afternoon pro- gramme focused on planning aspects and the way in which the different players in the process work to control construction costs. Helsinki, Amsterdam and Stockholm: backgrounds At first glance, there are a number of striking similarities between the cities of Helsinki, Amsterdam and Stockholm. All three are medium-size European capital cities. The population varies from 550,000 in Helsinki to the 720,000 inhabitants of Amsterdam. The three port cities have old port districts that are being or have already been restructured. Each of the three countries has a deeply embedded culture of government-imposed urban and rural planning. In addition, and partly as a result of that culture, there is an accumulation of rules and regulations. All three cities have a ground lease system and all three own a significant portion of the land within the municipal boundaries. In Helsinki and Stockholm, approxi- mately 70% of the land is owned by the municipal authority; in Amsterdam, the figure is about 90%. In Stockholm and Amsterdam, all built-up municipal land is and in principle will continue to be leased out. This trend has been shifting somewhat in Helsinki in recent years: at some locations, full ownership of the land is sold. The decision to lease out or sell full ownership is determined by the complexity of the task at the specific location and by financial and economic considerations. However, even in Helsinki, some 75% of the land is leased out. The building requirements In all three cities, the city council has set a quantitative target for housing production. In Amsterdam, the Municipal Executive promised the city council that the construction of 16,000 homes would start in the period 2002-2006. The plans in Stockholm are a bit more ambitious: they want to build 20,000 homes in the same period! The aim in Helsinki is to build 3,500 homes a year in the period 2004-2008. Both in Stockholm and in Amsterdam, specific city officials have been appointed as 'factotum' to ensure that the production goals are achieved. 3 The administrative organisation And now a number of prominent differences. The organisation of the city council's influence on produc- tion differs somewhat: Helsinki has a single-level administration and the associated civil servants to run the entire city. In Amsterdam, besides the central city administration, there are also 14 city districts, each with its own district council. These city districts are largely responsible for housing production. The central administration sets a number of policy frameworks, but then only directly influences the major metropolitan projects and the projects in city districts that are run by administrative coalitions. These metropolitan and coalition projects account for approximately 50% of production. The city of Stockholm is divided into 18 districts, which have a great many tasks and powers in terms of social and civil-society facilities, management, public areas, etc., but not in terms of housing production. They are involved in the discussion of the plans for their district, but do not have administrative responsibility for those plans. Achieving the production targets Production in Helsinki has been fairly high for years now. Since 1997, more than 3,000 homes have been built there per year, with peak years in 2000 and 2001 when well in excess of 4,000 new homes were built. The production targets are also being met under the current administration. Since 2003, slightly more than 3,500 homes have been built on average each year. An upward trend has begun in Amsterdam: after a low point of construction starting on 1,750 homes in 2000, this figure rose to 2,750 in 2002 and more than 4,900, no less, in 2004. The target for 2005 is to start construction work on more than 5,200 homes, in order to reach the desired 16,000 in this pro- gramme agreement period.