Ronald van Leeuwen February 2012 SECOND HOMES AS AN OPPORTUNITY IN DEMOGRAPHICALLY DECLINING REGIONS? An Analysis of the Match between the Demand for Second Homes and the Supply of Vacant Dwellings in Zeeuws-Vlaanderen Ronald van Leeuwen May 2012 SECOND HOMES AS AN OPPORTUNITY IN DEMOGRAPHICALLY DECLINING REGIONS? An Analysis of the Match between the Demand for Second Homes and the Supply of Vacant Dwellings in Zeeuws-Vlaanderen Colophon Author: Ronald Frederik Johannes van Leeuwen Student no.: 0709204 University: Radboud University Nijmegen Department: Nijmegen School of Management Study: Master Spatial Planning Product: Master's Thesis Supervisor: Dr. T. Stav Institution: Province of Zeeland Supervisors: Drs. M. van Woerkom and Drs. L.G. Kaagman Drs. A. Drijgers iii iv PREFACE Before you is my Master's thesis on the opportunities for second homes in demographically declining regions. This thesis has been written as the completion of the Master's degree in Spatial Planning at the Radboud University Nijmegen and was commissioned by the Province of Zeeland. This thesis would not have been possible if it was not for the help of the three municipalities in Zeeuws-Vlaanderen (Sluis, Terneuzen and Hulst), the interview partners and all the second home owners who were kind enough to respond to my questionnaire. Especially gratifying was the genuine interest that many of these second home owners showed and it was great to hear the stories of the people of which this thesis is actually about. I also would like to thank all my colleagues at the Province of Zeeland for their support. In particular, I would like to thank Danny for his help with many of the maps in this thesis and Bea and Erik for their help with the questionnaires. In Mathieu, Léon and Arjen, I had great supervisors at the Province of Zeeland. They gave me a great opportunity to do my research and really helped me with their experience and expertise. Most of all however, I am thankful for their enthusiasm and I will never forget how excited three grown-ups can be at the sight of an interesting map. Tamy, my supervisor at Radboud University Nijmegen, also stands out because of her expertise and enthusiasm. I have really enjoyed our discussions throughout the different stages of my research. They did not only help me to write a better thesis, but also helped me to develop my personal enthusiasm for doing research. Last but not least, I would like to thank my family and my partner Merel for their endless support and patience throughout my entire education. Middelburg, May 2012 v ABSTRACT Introduction Second homes. Traditionally locals and policy-makers rather considered them as a threat than as an opportunity. Second homes are often assumed to displace local housing searchers and to threaten the liveability in towns (e.g. Coppock, 1977a; Gallent, Mace & Tewdwr-Jones, 2005; Marjavaara, 2008). In demographically declining regions as Zeeuws-Vlaanderen, this perspective on second homes is changing however. Regions of which the number of households is declining are increasingly dealing with housing vacancy and therefore it is argued it is "always better to have houses only occupied during a couple of weeks a year than not occupied at all" (PZC, 2011, own translation). Recently, this has for instance led to discussions about possibly revising the second home policy of the municipality of Sluis in Zeeuws-Vlaanderen, where second homes are traditionally prohibited inside towns (Municipality of Sluis, 2011b). Jan Latten (2010), professor at the University of Amsterdam, has even presented second homes as an important opportunity for shrinking regions. Latten argues there is a growing need for "part-time dwelling" (18, own translation), in which people for instance combine a work week from Monday till Thursday in the Randstad1 with life at the countryside in the weekends. Shrinking regions in particular can meet this demand because of their relatively low housing prices, space and tranquillity, claims Latten. Opposed to the ideas of Jan Latten is the view of the Netherlands Environmental Assessment Agency (Verwest, Van Dam & Daalhuizen, 2010) and the Recreation Expertise Centre (Van de Laar, 2010). They claim the opportunities for second homes in shrinking regions are limited. First, because the future demand for second homes is highly uncertain and second, because they claim there is a mismatch between what (potential) second home owners demand and what shrinking regions have to offer. In this study it has been tested to what extent such a mismatch exists in Zeeuws-Vlaanderen. Research Approach The extent to which the demand for second homes and the supply of vacant dwellings match, has been investigated through a comparison of the locations and basic characteristics (building periods, dwellings types and dwelling values) of these dwellings in a single embedded case study. Central in this study is the Dutch shrinking region Zeeuws-Vlaanderen and within this case four specific types of towns have been analysed: (i) A town approximate to the shore with a highly assessed residential environment (Retranchement); (ii) A town approximate to the shore with a lowly assessed residential environment (Breskens); (iii) Towns distant from the shore with a highly assessed residential environment (Graauw and Hoek); (iv) Towns distant from the shore with a lowly assessed residential environment (Oostburg and Schoondijke). 1 The term Randstad refers to the polycentric agglomeration of the four largest cities in the Netherlands (Amsterdam, Rotterdam, The Hague and Utrecht). vi In these towns demand and supply have been compared with each other by using a combination of different data collection methods, namely: literature study, a questionnaire with current second home owners, interviews with local real estate agents, observation of the towns, and quantitative data from the three municipalities in Zeeuws-Vlaanderen (Sluis, Terneuzen and Hulst). The second home market is a complex market, which is quite different from the market for permanent dwelling. As a tool to capture as much of the complexity of the second home market as possible, a theoretical framework of different types of second home use has been formulated. This framework distinguishes five different ways in which a second home can be used: (i) Investment properties (which are primarily used for investment purposes and are not used by their owner) (ii) Vacation homes (which are visited a couple times a year for relatively long visits as a vacation accommodation) (iii) Weekend homes (which are frequently visited for relatively short visits during weekends and/or vacations) (iv) Pied-à-terre (which are primarily used for working purposes) (v) Full alternatives to the first home (which are frequently visited for relatively long visits and of which the visits are not restricted to weekends or vacations) Mismatch between Demand and Supply Of the total housing supply in Zeeuws-Vlaanderen, 4,67 percent are vacant dwellings and 7,77 percent are second homes. The majority of the second homes in Zeeuws-Vlaanderen are recreational dwellings2 (2.610), but the number of non-recreational dwellings which are being used as second homes (1.588) is also notable. Although there is some overlap between the demand for second homes and the supply of vacant dwellings in Zeeuws-Vlaanderen, this study predominantly shows a mismatch between demand and supply. First, there is a spatial mismatch. Locations of current second homes in Zeeuws-Vlaanderen and the questionnaire with second home owners show the proximity to amenities as the shore is by far the most important spatial determinant in the choice for a second home in Zeeuws-Vlaanderen. A relatively strong negative correlation exists between the number of second homes and the proximity of towns to the shore (Pearson's correlation coefficient = -0,625 and R squared value = 0,391), and for all five types of second home users the proximity of the shore has been the most important consideration in the second home decision-making process. In other words: the closer a town is to the shore, the larger the number of second homes generally gets. The scope of amenities as the shore is limited however, and notably less second homes were found in towns at more than 6 kilometres from the shore than in towns closer to the shore. Moreover, there is an important distinction between approximate to the shore and walking distance (less than 1,5 kilometres) of the shore. The majority of the current second home owners explicitly 2 A recreational dwelling is a dwelling, which in the land-use plan has been assigned a recreational function instead of a residential function. 98,16 percent of the recreational dwellings in Zeeuws-Vlaanderen are located at vacation parks. vii chose for a dwelling at walking distance of the shore. These people almost all possess a property on a vacation park, whilst 85,82 percent of the current second home owners have stated they prefer having a second home inside or around an existing town over a second home at a vacation park. For those people the location at walking distance of the shore is suggested to have been decisive. This especially goes for second homes that are used as investment properties or as vacation homes, since these locations have a larger and more stable leasing potential. The current supply of vacant dwellings however, is generally not found at these locations, and this thus represents a spatial mismatch between demand and supply. Second, there is a mismatch between demand and supply because second home owners seem to prefer other kinds of dwellings than the dwellings which are generally vacant. To some extent there is an overlap between what second home owners demand and what is currently vacant: second home owners generally purchase relatively small and simple dwellings which are also relatively inexpensive (< € 200.000), and this is basically the same price segment many of the vacant dwellings are in.