AUGUST 2020
BRIEFING PAPER
HOUSING
Learning from international
housing delivery systems
From
Copenhagen
to Tokyo
SPUR Housing Research
International Examples of Housing Delivery
AECOM
Acknowledgments
This report is a component of the SPUR Regional Strategy, a vision for the future of the San Francisco Bay Area
spur.org/regionalstrategy
AECOM for SPUR
Authors:
Sarah Karlinsky
Paul Peninger
Cristian Bevington
Thank you to the Core Funders of the SPUR Regional Strategy:
Chan Zuckerberg Initiative
Clarence E. Heller Charitable Foundation
Curtis Infrastructure Initiative
Dignity Health
Facebook
Genentech
George Miller
John S. and James L. Knight Foundation
Marin Community Foundation
Sage Foundation
Silicon Valley Community Foundation
Stanford University
Additional funding provided by AECOM, Fund for the Environment and Urban Life, Microsoft, Seed Fund, Stripe, Uber
Technologies and Wells Fargo.
SPUR Housing Research
International Examples of Housing Delivery
AECOM
Table of Contents
1. Introduction ................................................................................................................................ 1
2. Copenhagen .............................................................................................................................. 3
Key findings ................................................................................................................................................................................ 3
Housing stock overview ........................................................................................................................................................ 4
Policy ............................................................................................................................................................................................. 6
Financing housing .................................................................................................................................................................... 8
Large-scale urban development ........................................................................................................................................ 11
References ................................................................................................................................................................................. 12
3. Berlin .......................................................................................................................................... 13
Key findings ............................................................................................................................................................................... 13
Housing stock overview ....................................................................................................................................................... 14
Policy ............................................................................................................................................................................................ 16
Financing housing ................................................................................................................................................................... 18
References ................................................................................................................................................................................. 19
4. Vienna ...................................................................................................................................... 20
Key findings .............................................................................................................................................................................. 20
Housing stock overview ....................................................................................................................................................... 21
Policy ........................................................................................................................................................................................... 22
Financing housing .................................................................................................................................................................. 23
References ................................................................................................................................................................................ 25
5. Amsterdam ............................................................................................................................. 26
Key findings .............................................................................................................................................................................. 26
Housing stock overview ...................................................................................................................................................... 27
Policy ........................................................................................................................................................................................... 28
Financing housing .................................................................................................................................................................. 30
References ................................................................................................................................................................................. 31
6. Tokyo ........................................................................................................................................ 32
Key findings .............................................................................................................................................................................. 32
Housing stock overview ...................................................................................................................................................... 33
Policy ........................................................................................................................................................................................... 34
Financing housing .................................................................................................................................................................. 35
Large-scale urban development ...................................................................................................................................... 36
References ................................................................................................................................................................................ 37
7. Singapore ................................................................................................................................ 38
Key findings .............................................................................................................................................................................. 38
Housing stock overview ...................................................................................................................................................... 39
Policy .......................................................................................................................................................................................... 40
Financing housing .................................................................................................................................................................. 42
Large-scale urban development ...................................................................................................................................... 43
References ............................................................................................................................................................................... 44
SPUR Housing Research
International Examples of Housing Delivery
AECOM
1
1. Introduction
As part of the research phase of the SPUR Regional Strategy, AECOM prepared a set of international
case studies of housing delivery with the aim of informing policies to reshape the San Francisco Bay
Area’s housing delivery systems.
The cities included in this document are Copenhagen, Berlin, Vienna, Amsterdam, Tokyo and Singapore.
These cities were chosen for a variety of reasons, including that they compared well to the Bay Area in
terms of demographics, economic composition and housing market characteristics. Although the
political and economic systems are very different in each case, the city case studies presented here all
have a compelling and noteworthy approach to successfully delivering housing, which could inform
future policy innovation in the Bay Area.
The selected case studies demonstrate a breadth of approaches that address both supply and demand
challenges for housing in its entirety, as well as affordable housing more specifically. They draw on a
range of mechanisms, such as regulatory mandates, deregulation and regulatory streamlining, land use
and financial incentives, tenant support and protections, and intergovernmental collaboration.
The case studies included should not be seen as the only interventions each city is undertaking but as
specific elements of each city’s housing toolkit. As the Bay Area looks to update its toolkit, these
mechanisms—along with many others, old and new—can be combined in novel ways to create a more
efficient, integrated and equitable housing delivery system.
Lessons Learned and Best Practices
Although each of the cities profiled in this report has a unique set of policy, regulatory and economic
characteristics, there are some common themes across the cities that can point to new and innovative
policy and governance models for a more effective housing delivery system in the United States broadly
and in the Bay Area specifically. It is worth noting that these case studies were prepared prior to the
COVID-19 pandemic and thus do not take into account new policies for providing housing or income
support to renters and homeowners in these cities. However, two overarching commonalities among
these cities and their housing sectors do position them to respond more quickly and effectively to
housing need in the event of a major crisis like COVID-19:
1. Strong national government leadership in housing. In all of the case studies in this report, the
central government plays a strong role in financing and regulating the housing sector. The
ongoing commitment of these national governments to ensuring a functioning, responsive
housing sector is based on broader societal values around housing being not only an economic
commodity but also a public good.
2. Housing as basic social and economic infrastructure. Much like education or health care,
housing in these cities is treated as a public good and a necessary element of basic economic,
social and public health infrastructure, but it is also a type of traded commodity in a market
economy.
Unfortunately, the Bay Area by itself has a limited ability to drive transformative policy discussions at
the national level about either the role of the federal government or the broader conception of housing
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in U.S. society. But lessons learned from Copenhagen to Singapore could — with great political
leadership and courage — be applied in the region. The most significant of these include the following:
Active city and regional financing and development entities. Copenhagen and Tokyo have created
strong financing and development agencies, which act alongside and in partnership with private
developers, nonprofits and cooperatives to develop infrastructure, leverage the value of government-
owned land assets, and finance and develop new housing.
Streamlined planning and regulatory approvals for housing. Most of the cities profiled in this report
have planning and regulatory systems with less local control and fewer conditional approval processes
than is the case in California and the Bay Area. The most dramatically different approach is in Tokyo,
where landowners and developers enjoy simplified zoning regulations and relatively greater freedom to
develop urban parcels with the residential product types and densities that the market will support.
Greater government involvement in land markets. Many of the case-study cities play an active role in
either acquiring land or regulating land transactions to mitigate the role that land market speculation
plays in driving up housing prices.
Robust tenant protections. Through the creation of rent price indexes (Berlin) or broader tenant rights
and protections (Amsterdam), many of these cities actively support renting and renters as a critical and
valued component of the housing sector.
Nonprofit and cooperative leadership in housing delivery. Compared to most U.S. cities, a greater
percentage of the housing sock in these case-study cities is controlled by nonprofit agencies and
cooperatives, either independent entities or organizations linked to the national or local governments.
Given the already strong nonprofit housing sector in the Bay Area, this model may be something that
could be brought to scale in the Bay Area with greater financial support from state, regional and local
agencies.
In all of the case-study cities, by and large we see greater cross-jurisdictional collaboration and a
stronger sense of regional common purpose than is currently the norm in the Bay Area. But if the
COVID-19 crisis has made one thing clear, it is that political boundaries are largely meaningless in the
face of public health and economic challenges facing this region; if cities and counties work together to
address challenges like COVID-19 and its devasting impact on all housing stakeholders (renters,
homeowners, landlords, developers, investors, etc.), the region will have a much greater chance of
emerging from the crisis with a functioning housing delivery system that can effectively meet the still
great and increasing demand for housing to serve this diverse and growing region.
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2. Copenhagen
Key findings
1. The city takes an inclusive approach to providing housing. Relevant policies at the national and
local levels empower residents and tenants to be in control of their own living conditions. As a
result of both cultural norms and policy support, housing is seen less as a commodity to be bought
and sold and more as an essential element that all residents should have access to in a successful
and globally competitive city.
2. There is a development corporation that is politically independent. A development corporation
formed by the city or national government operates outside of political cycles, enabling long-term
strategic decisions regarding infrastructure and development. The corporation’s role in providing
critical infrastructure also encourages new development and allows the corporation (and city) to
benefit from the land value increases.
3. Funding is recycled. A one-time investment establishes the initial funds, which are then maintained
through repayment agreements, in particular compulsory contributions after the initial mortgages
have been paid off. The funds are replenished and can grow to allow for future development.
4. Financial requirements apply to housing association management. Under these requirements,
compulsory contributions from tenants cover the cost of loan repayments and the management of
housing developments. In addition, housing associations must have reserve funds specifically for
maintenance, renovation and construction. These requirements ensure that housing associations
are financially equipped to maintain quality.
5. The city uses a combined public asset portfolio. Combining all public assets in a single portfolio
allows the city both to identify land and assets for housing and to use the portfolio’s combined
value as collateral for financing large-scale development.
6. National and city government form partnerships. Strong relationships between different levels of
government support large-scale development by pooling resources, political clout and capacity.
This kind of partnership enabled Copenhagen to establish its development corporation and to
include Copenhagen’s port site in the city’s asset portfolio, spurring significant development in the
city by making it easier to set aside land and pay for development.
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Housing stock overview
In order to demonstrate Copenhagen’s unique approach to providing housing, this report compares the
city proper to the wider region. Even at this local scale, real differences can be seen. Within the city,
most housing units are provided through cooperatives, but in the wider region, the predominant
housing type is an owner-occupied unit. The majority of owner-occupied units within Copenhagen are
flats/apartments versus single-family houses in the wider region.
Housing type
Number of dwellings
Percent of total housing market
Region
Copenhagen
Region
Copenhagen
Owner-occupied
family houses
209,000
18,000
24
5
Owner-occupied
flats
127,000
70,000
15
20
Cooperatives
135,000
112,000
15
31
Social housing
189,000
57,000
22
16
Private rentals
175,000
77,000
20
21
Other rentals
38,000
24,000
4
7
Total
874,000
357,000
100
100
24%
15%
15%
22%
20%
4%
Housing Type,
Region (%)
Owner-occupied family
houses
Owner-occupied flats
Cooperatives
Social housing
Private rentals
5%
20%
31%
16%
21%
7%
Housing Type,
Copenhagen (%)
Owner-occupied family houses
Owner-occupied flats
Cooperatives
Social housing
Private rentals
Other rentals
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Ownership
Number of dwellings
Percent of total housing market
Region
Copenhagen
Region
Copenhagen
Owner-occupied
(individuals, including
partnerships)
440,567
92,653
47.5
28.8
Nonprofit building
societies
211,095
62,440
22.8
19.4
Limited liability
companies
75,524
40,393
8.1
12.5
Cooperatives
139,770
99,286
15.1
30.8
Public authorities
17,790
4,646
1.9
1.4
Other or unknown
42,838
22,470
4.6
7.0
Total
927,584
321,888
100
100
47.5
22.8
8.1
15.1
1.9
4.6
Building Ownership
Type, Region (%)
Owner-occupied (individuals, including
partnerships)
Nonprofit building societies
Limited liability companies
Cooperatives
Public authorities
Other or unknown
28.8
19.4
12.5
30.8
1.4
7
Building Ownership
Type, Copenhagen (%)
Owner-occupied (individuals, including
partnerships)
Nonprofit building societies
Limited liability companies
Cooperatives
Public authorities
Other or unknown
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Policy
Land use
City and local governments in Denmark (including Copenhagen) can make decisions regarding building
permission and land zoning, as well as act as the urban developer. For example, in order to support the
development of housing and commercial activities, the city has rezoned publicly owned land to
residential and commercial and then transferred these asses to the Copenhagen City and Port
Development Corporation (see later sections for more information) to allow the implementation of
critical enabling infrastructure.
The city also establishes detailed regulatory plans intended to control land use and set density and
building envelope requirements, ensuring that high-quality development occurs across the city.
Importantly, these requirements are not intended to hinder creativity or innovation but to enable them
in a manner that enhances the city.
Affordable housing
Denmark’s national policy seeks to provide “affordable housing for all” as well as allow people to
influence their own living conditions. In recent years, this policy stance has focused particularly on the
elderly and other specific segments of society that are most in need. The housing subsidies reflect this,
with subsidies that enable individual households to enter and remain secure in the housing market,
rather than just subsidies for construction.
Tenant protections
All housing types except owner-occupied dwellings are subject to rent regulations, in particular units in
housing associations. However, this approach has been attributed to reduced investment in the sector.
National and local governments in Denmark provide housing allowances to those residents in need.
Such benefits are based on household income and size.
Social housing -- publicly financed housing that serves low, moderate and middle-income households -
is largely made up of older developments, which are often located in inner-city estates. Unlike in many
developed cities, these older developments are widely considered to be of better quality than other
rental housing, which can be linked to the funding and financing approaches in place, as outlined in the
sections that follow.
Each housing estate is required to be financially stable, with its individual books balanced. Separate
estates, including those operated by the same housing association, are advised not to seek cross-
subsidization between estates, meaning that cashflow from one estate should not be used to subsidize
deficits in another estate.
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Tenant representation on estate management boards and housing association boards ensures a sense of
ownership and embeds residents in decision-making processes.
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Financing housing
The National Building Fund for Social Housing
The fund aims to channel profits made from social housing into ensuring the security of future housing,
as well as to maintain and manage existing stock. Established in 1967, the fund provides both financial
support and technical assistance to social housing associations.
Financing comes from compulsory contributions by tenants of estates established before 1970 as well
as from mortgage payments by tenants. Payments from tenants that were initially used to cover the
mortgage repayments continue after the mortgage has been repaid.
Contributions equal about $120 million (DKK 827 million per annum, 2011). Annual contributions are
adjusted to reflect changes in the Danish regulatory index for housing construction.
For developments that were financed before 1999, two-thirds of the liquid assets earned after the
mortgage has been repaid are transferred to the national fund, with the remaining one-third going to
the local Disposition Fund of the relevant housing association/organization. For developments financed
from 1999 onward, one-third of the total liquid assets is sent to the national fund, with two-thirds kept
by the local Disposition Fund.
Assets that have been transferred to the national fund are split, with half going to the Central
Disposition Fund and the remaining half deposited in the New Housing Construction Fund.
It is expected that the payments received from the repaid loans and deposited into the National
Building Fund will rapidly increase, from $50 million (DKK 343 million) in 2008 to $370 million (DKK
2,520 million) in 2020.
Housing associations have the right to use two-thirds of the compulsory contributions that they receive
for new construction and rehabilitation, maintenance and modernization of existing housing stock in the
estate from which the contributions were drawn, via the Central Disposition Fund
Central Disposition Fund
The fund is used in multiple ways:
• Grant payments for renovation, refurbishment and maintenance works
• Support to socially vulnerable areas now and in the future (this can take many forms but does
include rent subsidization and must be approved by the local municipality and community)
• Demolition grants
• Infrastructure upgrades
• Operational expenses where there are financial struggles and/or deficits
• New construction grants
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New Housing Construction Fund
This fund draws funding from developments financed after December 31, 1998 (as detailed above). The
sources of funding include both profits gained from tenant contributions and the transfer of liquid
assets upon completion of the mortgage term (35 years). The fund is used for the construction of new
housing.
Other subsidies and incentives
Social housing is also subsidized by the central government through the copayment of mortgages
aimed to assist with the financing of new housing construction.
Subsidies are also offered through urban renewal programs, as well as direct contributions to capital
costs.
Tenant contributions in social housing are determined by cost recovery principles rather than seeking to
generate additional profit for the developer, meaning that payments made by the tenants should cover
the cost of development (based on mortgage rates) and of maintenance and management of the
property.
Social housing is exempt from national income and real estate taxes.
Cooperatives
Denmark, and in particular Copenhagen, supports a cooperative approach to providing both housing
association units and private housing. This approach has become a widely accepted part of the Danish
housing market. Though both models below are considered cooperatives, there are distinct differences.
• Private nonprofit housing associations
─ Residents have collective ownership over properties and control over the association. They
make up the majority of the individual estate management boards and have strong
representation on the overall housing association boards. While they are still considered
tenants of the association, residents have significant control and decision-making powers
compared to other models.
• Private cooperatives
─ Individual residents hold shares in the common property and communal areas and have usage
rights to their flats.
─ Since 2005, residents have been permitted to take out loans using cooperative apartments as
collateral.
─ Cooperatives have overtaken rental units as the major provider of housing, which can be
attributed to changes in legislation in the 1970s. The law stipulates that private landlords give
tenants the opportunity to form a cooperative and take over the property before private
resale. The formation of cooperatives is supported by state credit guarantees and tax
exemptions.
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Copenhagen City and Port Development Corporation
Land that has been developed by the Copenhagen City and Port Development Corporation (CCPDC) is
sold at a heavily discounted price to facilitate the development of social housing.
The CCPDC helps to link developers and social housing associations/organizations, which facilitates the
transfer of the properties to social housing providers when development is complete.
For further details on CCPDC, see the “Large-scale urban development” section below.
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Large-scale urban development
Copenhagen City and Port Development Corporation
Copenhagen has a history of using specially established corporations to deliver infrastructure. For
example, Orestad Development Corporation helped to build the metro system and was a founding
component of the CCPDC.
Established in 2007 as a co-owned corporation between the city (55% ownership) and national
government (45% ownership), CCPDC has evolved toward greater city ownership (95%), with only 5%
now owned by the national government. This shift gives the city greater autonomy to make decisions
and plan strategically for its future.
When the corporation was formed, a comprehensive assessment of public assets and land was carried
out, including an assessment of market value (which is used as collateral for loans). To aid decision-
making processes, publicly owned assets were bundled together in a single portfolio.
To ensure that CCPDC can take long-term strategic views on development, the corporation is insulated
from politics, which also allows it to be agile and to respond appropriately to changing market
conditions.
CCPDC primarily funds infrastructure, such as public transit, roads, recreation and other public amenities
that support and facilitate urban development. Since its formation, the corporation has undertaken
around 50% of all redevelopment in Copenhagen.
The corporation is now funded through the sale and lease of public land and assets after infrastructure
projects have been carried out, allowing land value increases to be captured and reinvested to fund
future infrastructure delivery.
CCPDC can borrow against the value of public assets while also benefiting from low-interest loans that
result from the city’s AAA credit rating.
The corporation does not operate in isolation but instead forms partnerships with both private and
public urban development entities.
The harbor/port land, which was originally owned by the national government, was transferred to the
corporation to allow the corporation to leverage land and development value to deliver $2 billion in
metro transit investments. As a result of the corporation’s initial investment in the metro a further $495
million investment was successfully secured from other sources.
The North Harbor redevelopment alone has led to $15 billion in reinvestments.
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References
Building and Housing Register (BBR), March 2011 - Sasha Tsenkova and Hedvig Vestergaard, Social
Housing Provision in Copenhagen, University of Calgary,
https://www.enhr.net/documents/2011%20France/WS07/Paper-Tsenkova-WS07.pdf
BL—Danish Social Housing, “The Danish Social Housing Sector,” 2018, https://www.bl.dk/in-english/
Bruce Katz and Luise Noring, The Copenhagen City and Port Development Corporation: A Model for
Regenerating Cities, Brookings Institution, 2017, https://www.brookings.edu/wp-
content/uploads/2017/05/csi_20170601_copenhagen_port_paper.pdf
“Copenhagen in Brief,” Copenhagen.com, 2020, https://www.copenhagen.com/in-brief
Council of Europe, “Copenhagen, Denmark—Intercultural City,”
https://www.coe.int/en/web/interculturalcities/copenhagen
Eric Clark et al., Financialisation of Built Environments in Stockholm, Copenhagen, and Ankara: Housing Policy and
Cooperative Housing, FESSUD Working Paper No. 167, 2016,
http://portal.research.lu.se/portal/files/26593771/16_FESSUD_WPS_167.pdf
Landsbyggefonden, “The Danish Social Housing Sector,” https://lbf.dk/om-lbf/english/
Sasha Tsenkova and Hedvig Vestergaard, Social Housing Provision in Copenhagen, 2011,
https://www.enhr.net/documents/2011%20France/WS07/Paper-Tsenkova-WS07.pdf
Statbank Denmark, http://www.statbank.dk/statbank5a/default.asp?w=1536
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3. Berlin
Key findings
1. Renting is supported as a long-term approach to housing. Berlin, and Germany as a whole, has
long been a place where renting a home is broadly accepted as a long-term housing option. Rental
housing is the most common type of housing in Berlin. Strong tenant protections allow renters to
feel secure in their homes, as opposed to the short-term lease agreements common in other parts
of the world.
2. Housing is viewed less as a commodity to buy and sell than as an essential right. Historically,
housing in Berlin has been disconnected from speculative investment markets, and for the most
part it still is. The local culture—which sees housing as something everyone should have access to,
not as a vehicle for personal wealth—has helped to maintain affordable housing across the city until
recent years.
3. A rental price index prevents excessive increases. Landlords are discouraged from increasing
rents by levels deemed to be excessive, and tenants are equally discouraged from paying excessive
amounts for rental properties as determined by a voluntary index, meaning that the index operates
mainly as a moral code for both landlords and renters, with legal backing only provided to settle
disputes.
4. Municipal governments have strong powers to purchase property before private developers.
With a right of first refusal on property sales within municipal government boundaries, local
governments can seek to ensure that sites that would otherwise be purchased and redeveloped
into high-end properties remain affordable and meet the needs of the existing population. In many
cases, the municipalities have a long history of exercising this right.
5. There are long-standing municipal affordable housing providers. Municipal affordable housing
providers have long histories and a strong presence in the city. They are supported across all levels
of government, allowing them to operate effectively even in increasingly competitive property
markets.
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Housing stock overview
Unlike many cities around the world, Berlin has a preponderance of rental housing (84.9% of total units).
A combination of private landlords, cooperatives and government entities supplies these rental units.
Only 15.1% of housing units were classified as owner-occupied in 2017.
Berlin is also in a relatively unique situation, because much of its affordable housing is naturally
occurring (meaning that it does not require subsidies). Just 10.8% of total units are subsidized. Most
units are supplied by regular providers (68.8%), with affordable housing providers responsible for 31.2%
of all units in the city. This structure, however, puts the city at risk from market fluctuations as it
becomes a more desirable place to live.
Housing type
Percent of total housing
market
Number of dwellings
Rentals
84.9
1,626,500
Private rentals
59.7
1,144,640
Municipal housing
15.4
294,725
Cooperatives
9.8
187,135
Owner-occupied
15.1
290,000
Total
100
1,916,500
59.7
15.4
9.8
15.1
Housing Type (%)
Private rentals Municipal housing
Cooperatives Owner-occupied
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Provider
Number of
dwellings
Percent of
category
Percent of total
housing market
Subsidized
Rentals
Private rentals
90,243
43.5
4.7
Municipal housing
94,098
45.3
4.9
Cooperatives
23,175
11.2
1.2
Total
207,516
100
10.8
Unsubsidized
Rentals
Private rentals
1,054,397
61.7
55
Municipal housing
200,627
11.7
10.5
Cooperatives
163,958
9.6
8.6
Owner-occupied
290,000
17
15.1
Total
1,708,984
100
89.2
Total dwellings
1,916,500
Provider
Number of
dwellings
Percent of
category
Percent of total
housing market
Rentals
Private rentals
114,915
19.2
6
Municipal housing
294,725
49.4
15.4
Cooperatives
187,135
31.4
9.8
Total
596,775
100
31.2
Rentals
Private rentals
1,029,725
78
53.7
Owner-occupied
290,000
22
15.1
Total
1,319,725
100
68.8
Total dwellings
1,916,500
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Policy
Rent index (Mietspeigel)
The index is updated and published every two years so that both landlords and tenants can use it to
compare prices for similar properties. The index prices apply to both existing lease agreements and new
leases. Landlords are permitted to increase the price of rent to the level indicated in the index. While
this rule is not legally binding, it can be used as part of legal proceedings in dispute cases.
Rent break (Mietpreisbremse)
A national tool that can be adopted at the state level, this mechanism is intended to control rent
increases in private contracts. Adopted in Berlin in 2015, the policy limits the increase for new leases to
10% above the index price for the applicable type of unit. However, the regulation only applies to
buildings constructed before 2014 and can only be used for up to five years. It also doesn’t apply in
cases of modernization (see below). Once again, this law is only enforced in situations where a landlord
or tenant brings legal action.
Modernization
In many cases, rent increases are heavily controlled. However, when extensive building improvements
have been made, the landlord can negotiate much higher increases. In a hot property market such as
Berlin, this allowance has resulted in rent increases of about 40% to 50%, with occasional reported
increases of 200%. To discourage such large increases, the municipality can step in with its right of first
refusal (see below).
First refusal
When a building is put up for sale within a municipality’s boundary (a municipality, in this case, is one
level below the city of Berlin’s government), the municipality has the right of first refusal to purchase
that property. This right is not exercised in most instances, but one municipality, Friedrichshain-
Kruezberg, frequently uses it. The municipality purchases the properties and often retains them as
affordable housing via its own municipal housing company.
In some cases, in particular with modernization projects where the intent to increase rents is clear, the
municipality will negotiate with the developer or landlord to prevent increases from happening—for
example, by instituting a lock-in period in which significant rent increases will not occur over an agreed-
upon time frame. The municipality has two months to agree to this approach, but ultimately a municipal
government could enact its right of first refusal to purchase the project if an agreement is not reached.
The use of this right can cause tension between municipalities and the Berlin city government when
there is a conflict of interest. In some cases, the right of first refusal has been overruled.
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European Union and European Commission: Target groups
As with all countries that form the European Union, Germany (and therefore Berlin) is subject to
European Commission directives. However, Germany has opted not to accept the commission’s “target
groups” approach to affordable housing allocation (see the Amsterdam case study for more information
regarding target groups). Germany determined that this approach would have negative impacts on the
country’s — and developers’ — ability to create socially mixed communities that have sufficient stability
to become long-term parts of the urban fabric.
Social housing
Across all providers of social housing — municipal housing companies and the private sector — tenants
must meet income requirements to qualify. Income levels are primarily set at the national level, but with
room for some local variation to reflect specific housing markets. For Berlin, the household income limits
have been set at:
• $18,500 (¤16,800) for single-person households
• $27,800 (¤25,200) for two-person households
• $6,300 (¤5,740) for each additional household member
• An additional $800 (¤700) per child
Means testing was introduced in 2015 to reflect the changes in the Berlin housing market in recent years
and to ensure that those most in need are able to access necessary housing. Approximately 250,000
residents in 125,000 units benefit from this policy. Both existing properties under the ownership of the
state and future state projects must set aside 55% of units for low-income households.
Housing cooperatives
As with the cooperative model found in Copenhagen, tenants in cooperative units have more rights than
a standard rental property agreement would allow and can play a role in the decision-making and
management of the cooperative. Lease agreements are perpetual, which provides long-term security
but also results in long wait lists and competitive applications when spaces do become available.
Turnover in cooperative units is extremely low.
Each cooperative is entitled to set its own application requirements and contract lengths, with
preference often given to those with middle to upper incomes in order to ensure a more stable financial
arrangement for all members of the cooperative.
In some cases, the cooperatives can also act as savings banks and neighborhood resource centers.
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Financing housing
Federal funding
The federal government allocates funds to the individual states, but how this funding is distributed
within each state is left largely to the state government to determine. Housing is one of the primary uses
of federal funding. In Berlin, funding allocated to housing is largely used for subsidies that incentivize
landlords and developers to provide affordable housing.
Subsidies
As previously mentioned, Berlin allocates part of its federal funding toward housing subsidies for
landlords and developers, in the form of public loans. In the city, many providers manage a mix of social
(affordable) and market-rate units, and Berlin does not prioritize one provider over another. But when a
property owner takes out a subsidized loan against a property, the funds must be used for social
housing. All units that are part of the development for which the loan is used are then considered to be
social units and are subject to lock-in periods which protect current tenants from rent increases for an
agreed upon length of time.
The scheme was originally introduced in the 1960s and ran till the 1990s, before being reintroduced in
2014. During the period when subsidies were abolished, the housing market was so depressed in Berlin
that units provided through this system were often more expensive than market-rate units. Many of the
original lock-in periods have expired or are about to, which means that landlords can now charge
market rates. Those landlords and developers seeking a loan post-2014 will often be subject to longer
lock-in periods (up to 30 years). Municipal housing companies that access subsidies must designate at
least 50% of units as social housing across their portfolios.
Municipal housing companies
Municipal housing companies in Berlin are obligated to provide social housing for low-income
households that would otherwise not be able to access the private rental or owner-occupied markets.
Many of these companies have long histories in the city dating back to the 1920s, when they were
established to respond to the severe economic decline after World War I. Their aim has always been to
ensure that those who needed it could access safe, high-quality and healthy housing. The companies are
technically private companies, but they are wholly owned by the state of Berlin. Through a blend of
social and market-rate housing, the companies are run to turn a profit, but the profits generated are
then fed back into the Berlin state treasury to be reinvested in the city’s housing stock.
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References
Erik Kirshbaum, “‘Poor but Sexy’ Berlin Now Home to Soaring Rents and Rising Tensions,” Los Angeles
Times, April 24, 2018, http://www.latimes.com/world/europe/la-fg-germany-berlin-property-20180424-
story.html
Feargus O’Sullivan, “Berlin Just Showed the World How to Keep Housing Affordable,” CityLab, Nov. 12,
2015, https://www.citylab.com/equity/2015/11/berlin-just-showed-the-world-how-to-keep-housing-
affordable/415662/
Feargus O’Sullivan, “Can Berlin Buy Its Way out of a Housing Crisis?,” CityLab, Jan. 2, 2018,
https://www.citylab.com/equity/2018/01/friedrichshain-kreuzberg-apartments-rent-prices/549314/
Investitionsbank Berlin, Housing Market Report, 2017
https://www.ibb.de/media/dokumente/publikationen/in-english/ibb-housing-market-
report/ibb_housing_market_report_2017_summary.pdf
Maarten van Brederode, Affordable Rental Housing in Amsterdam and Berlin: A Comparison of Two European
Capital Cities, University of Amsterdam master’s thesis, June 11, 2018,
http://www.afwc.nl/fileadmin/user_upload/Bestanden_2018/THESIS_Maarten_van_Brederode_FINAL.P
DF
Patrick Collinson, “Berlin Tops the World as City With the Fastest Rising Property Prices,” The Guardian,
April 10, 2018, https://www.theguardian.com/world/2018/apr/10/berlin-world-fastest-rising-property-
prices
Statistisches Bundesamt (Destatis), “Income, Consumption, and Living Conditions,” 2020,
https://www.destatis.de/EN/FactsFigures/SocietyState/IncomeConsumptionLivingConditions/IncomeC
onsumptionLivingConditions.html
“Why Is Berlin So Dysfunctional?,” The Economist, Dec. 2, 2017,
https://www.economist.com/europe/2017/12/02/why-is-berlin-so-dysfunctional
https://www.ihk-
berlin.de/blueprint/servlet/resource/blob/3178106/8435c9f495d401cf57c9109e458e8580/berlin-s-
economy-in-figures-2015-1--data.pdf
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4. Vienna
Key findings
1. Renting is supported as a long-term approach to housing. As in Berlin, renting is fully accepted as
a long-term living option and is protected by the city. The most common type of housing in Vienna,
rental units are largely provided by the city itself or at least subsidized by the government.
2. Land use and planning focuses on community development. The planning system in Vienna
supports and enhances both new development and existing communities through integrated and
community-led approaches.
3. The city is a major and trusted housing provider in the city. Not only is the city a major owner and
operator of housing in Vienna, it is also a trusted source of housing. Living in a city-provided or
city-subsidized home is considered a desirable form of housing. These high-quality units are
integrated within the city fabric.
4. Housing is primarily a place to live, not a commodity to buy and sell. As in Berlin, housing is
disconnected from speculative investment markets; however, Vienna takes this a step further by
restricting private developers’ ability to generate large profit margins through redevelopment.
Housing is not viewed as a means to increase personal wealth, but rather as an essential part of life
that everyone should have access to.
5. National and city governments collaborate. Both levels of government contribute to affordable
housing funding and subsidies, reinforcing the ethos that everyone should be able to afford a
home. In Vienna, the national government contributes a greater proportion that the city
government does.
6. Employees and employers contribute to subsidized housing. Through specific and transparent
taxation, employees and employers make direct contributions to affordable housing in Vienna and
in Austria as a whole. Linking this individual contribution to federal taxes supports the mentality
that it is a civil responsibility to support housing. The national government distributes the funds,
ensuring a fair share to those areas that need the most support.
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Housing stock overview
In Vienna, the majority of units are rental properties, but unlike in many cities, the vast majority of these
units are some form of affordable housing. In fact, 48.1% of all housing units in the city are considered to
be social housing. Owner-occupied and single-family homes make up just 22.8% of units in the city.
Housing type
Percent of
total housing
market
Rentals
77.2
Private rentals
29.1
Total social rentals
48.1
City operated social
housing
24.2
Nonprofit housing
23.9
Owner-occupied and other
22.8
29.1
24.2
23.9
22.8
Housing Type (%)
Private rentals
City operated social housing
Nonprofit housing
Owner-occupied and other
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Policy
Land use
Vienna has specific policies in place to ensure that new developments are designed to create and
enhance communities, with longevity at their core. This goal is particularly important in social housing
projects, which are located in low-rise but high-density developments. These developments are
encouraged to reinvest in existing communities and neighborhoods. The city gives preference to
projects that include “care functions” for key groups, such as the elderly or disabled, and favors rental
units over homeownership in new housing developments.
The city has also instated the “wohnbauoffensive,” which aims to remove current barriers to permitting
and construction activities and boost housing production by 30%.
Housing rehabilitation and renovation
When properties in the city are rehabilitated or renovated, it does not result in increased rent for
tenants. Strong tenant protections are supported by local community interest group and community
social support worker representation in all social housing projects, ensuring community backing to
ensure the tenants best interests are protected.
Housing research
The city currently runs the largest housing research program in Europe, which helps to ensure high-
quality housing that meets the needs of Vienna residents.
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Financing housing
Federal taxes
A portion of Austrian federal taxes subsidizes social housing. This tax is roughly 1% of net income and
consists of an equal share of employee and employer contributions. In Vienna, the amount collected is
approximately ¤450 million per year, which is then matched with a ¤150 million contribution from the
Vienna state budget. The financing arrangements are guaranteed until 2020, when they will be
reevaluated.
This money is used as a subsidy for the construction, renovation, rehabilitation and preservation costs of
social housing stock. Of the ¤600 million, the split is:
• ¤100 million for housing allowances
• ¤500 million for investment (two-thirds for the construction of new units and one-third for
rehabilitation and renovation)
Vienna Housing Fund
A city-owned nonprofit, this fund operates with complete independence from the city’s political
workings and election cycles. The fund was established with ¤45 million of publicly owned land from the
city and has remained self-sufficient since its inception.
With its ability to buy and sell property on the open market, the fund generates 7,000 to 13,000 new
units annually. It maintains a two-year supply of land to ensure that it’s not impacted by the short-term
fluctuations of the property market.
The scale of activity of the Vienna Housing Fund and the city’s housing associations is so significant that
these entities actually influence the overall housing market in the city.
City-provided housing
In contrast to many cities in Europe and around the world, Vienna did not dispose of its publicly owned
housing during postwar times but instead established a strategy to maintain ownership and to
rehabilitate the units. Today, the city is a major housing provider, with approximately 220,000 units
under its control. It is also often seen as the first point of contact for those looking to dispose of land or
property.
Subsidies
Subsidies are provided in the form of low-interest, long-term public loans to developers. The repayment
of the loans goes into a revolving fund that provides loans to new developers and landlords. Generally
speaking, approximately one-third of construction costs can be covered by this type of loan. As a result,
around 80% of all new builds in the city use this subsidy scheme in some way.
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In order to access such a loan, the developer or landlord must demonstrate that the development being
proposed fulfills prescribed design and quality criteria. Applications for subsidies or even bids to
purchase city-owned land can be made in various ways, including through design competitions in which
the winner receives the subsidy or land, helping the city ensure the design quality of new builds.
Vienna operates supply-side subsidies to encourage housing development across the city rather than
demand-side subsidies (to tenants). There are no indirect subsidies, such as tax reductions, for those
investing in affordable property; this policy prevents higher-income groups from benefitting from such
developments.
Private developer contributions
Private developers that wish to participate in the Vienna housing market must return profits generated
from housing development to a revolving fund, which is used to fund other housing projects the city
operates.
Specialty housing banks
Financial institutes have been set up specifically to offer funding and financing arrangements to
developers, landlords and homeowners to build and purchase property. These institutes receive tax
breaks.
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References
Adam Forrest, “Vienna’s Affordable Housing Paradise,” Huffington Post, July 19, 2018,
https://www.huffingtonpost.com/entry/vienna-affordable-housing-
paradise_us_5b4e0b12e4b0b15aba88c7b0
City of Vienna, “Demographic Information 2019,”
https://www.wien.gv.at/english/administration/statistics/population.html
Hope Daley, “Vienna Leads Globally in Affordable Housing and Quality of Life,” Archinet, July 25, 2018,
https://archinect.com/news/article/150074889/vienna-leads-globally-in-affordable-housing-and-
quality-of-life
Joe Cortright, “Housing Policy Lessons from Vienna: Part I,” City Observatory, July 20, 2017,
http://cityobservatory.org/housing-policy-lessons-from-vienna-part-i/
Michael Fitzpatrick, “What Could Vienna’s Low-Cost Housing Policy Teach the U.K.?,” The Guardian, Dec.
12, 2017, https://www.theguardian.com/society/2017/dec/12/vienna-housing-policy-uk-rent-controls
Wolfgang Forster, “Vienna: Sustainable Housing for a Growing Metropolis,” Feb. 27, 2018,
https://www.nesc.ie/assets/files/Forster.pdf
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5. Amsterdam
Key findings
1. Housing associations have a strong presence. The significant use of housing associations means
that much of the housing stock is subsidized in some form and is subject to rules and regulations
around price, accessibility and quality.
2. There are strong planning policies. Through robust land use policies, the city ensures that new
development and redevelopment projects meet policy requirements, that existing communities are
protected and that new communities are integrated.
3. The city owns a significant amount of housing. Because the city of Amsterdam owns and operates
a large stock of properties, it can exercise a lot of control over providing housing to residents and
can set prices that are less vulnerable to external market forces.
4. Rents are controlled. The city (and the Netherlands as a whole) supports the culture of renting by
restricting the amount that rent can be raised per year. Rent control protects renters from rapid
increases, which can force vulnerable communities to move.
5. Prices for housing are point-based. Meant to reduce market influence over housing, the point-
based system (see “Financing housing” below) aims to ensure that the price reflects the true value
of the unit as a home rather than as an economic commodity. Note that the price/market value has
now been included in this system, which will have some impact on the effectiveness of this
approach to providing affordable units (but market value is just one of several criteria).
6. Strong tenant rights and protections are in place. Along with rent control, tenant rights create a
culture favorable to tenants, supporting affordable renting as a viable long-term option for
housing. These protections also promote the development of community by allowing people to
plan for the long term in a property rather than seeing it as a temporary stopgap or an unstable
situation.
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Housing stock overview
The majority of housing units in Amsterdam (52.6%) are in some way regulated. The single largest
category, units regulated by a housing association, makes up 39.4% of the total units in Amsterdam,
though it should be noted that not all housing association housing is regulated as outlined in the table
below. Owner-occupied units account for 32.5% of all units in the city. Though not as much as Berlin and
Vienna, Amsterdam does provide a significant proportion of its housing through the private rental
market (both regulated and unregulated) at 24.4%.
Housing type
Number of dwellings
Percent of total
housing market
Total dwellings
427,900
100
Housing associations
184,300
43.1
Private rentals
104,300
24.4
Owner-occupied
139,300
32.5
Provider
Number of
dwellings
Percent of
category
Percent of total
housing market
Rentals
Housing
associations
168,700
74.9
39.4
Private rentals
56,600
25.1
13.2
Total regulated
225,300
100
52.6
Rentals
Housing
associations
15,600
7.7
3.7
Private rentals
47,700
23.5
11.2
Owner-occupied
139,300
68.8
32.5
Total unregulated
202,600
100
47.4
Total dwellings
427,900
43.1
24.4
32.5
Housing Type (%)
Housing associations Private rentals
Owner-occupied
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Policy
Land use
City planning and land use policies seek to create and maintain mixed communities that have both a
demographic mix and a mix of uses. The Dutch/Amsterdam planning system is generally considered to
be flexible and agile enough to respond to issues and effectively learn from past errors.
Housing Act of 2015 (target groups)
In line with EU/European Commission regulations, new housing policy was introduced in the
Netherlands to ensure that housing provided by housing associations was reserved for those deemed to
need it the most (“target groups”). As a result of this update, 90% of new housing association contracts
are given to households considered to be socially disadvantaged (earning no more than ¤33,000).
Housing associations must comply with this regulation to continue accessing state aid through loan
guarantees, among other things. The associations are permitted to rent up to 10% of the remaining units
to households with incomes up to ¤40,349.
Social housing
Units considered to be social housing make up the majority of affordable rental properties in the city.
This approach stems from the rise of the welfare state and has become an integral part of life in the
Netherlands, as in many northern European and Scandinavian countries. The city of Amsterdam still
owns a significant proportion of the city’s housing stock, though this is decreasing.
The income limit for social housing is ¤36,165, though this does not take into consideration any potential
variations in household makeup (size, number of children, etc.). The income limit for regulated units
provided by private landlords is ¤44,360.
All limits (including those set by the 2015 Housing Act) only apply to new contracts. In the Netherlands,
residential contracts are generally given for an indefinite period of time and are not terminated based
on any increases in income over the previous limits. Therefore, once tenants secure a unit, their tenancy
can in many cases be considered to be secure regardless of future circumstances.
In 2016, new contracts for young people (up to age 28) were introduced. These temporary, five-year
agreements support those entering the city’s job market, particularly in more junior roles. Since these
younger people will likely see income increases by the end of the five-year period, this system uses a
stepping-stone approach that helps young workers while also ensuring a rotating supply of more
affordable units.
Because contracts are long and tenant protections are strong, there are long waiting lists for affordable
units, reported to be up to 14 years.
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There are also nationally set limits for the amount that can be charged for affordable units. In 2018, the
maximum allowable rent was ¤710.68 per month, which remains fixed for three years.
Amsterdamse Federatie van Woningcorporaties (AFWC)
The AFWC is a voluntary organization that aims to provide a platform for knowledge-sharing about
providing high-quality, affordable housing in Amsterdam. All housing associations signed on to the
ethos of the “undivided city” and agreed to collaborate. The AFWC is also supported by a strong
tenants’ association to ensure that tenants’ views are represented and that key stakeholders in the
market can have a balanced dialogue. Two of the AFWC’s core agenda items are making housing
affordable and increasing the level of construction in the city, with a set target of providing 162,000
units across the city.
Rent controls
Implemented at the national level, rent controls provide a strong shield against unjust rent increases. In
the regulated rental market, allowable rent increases vary by the income of the tenant. In 2017, for
households with income below ¤40,349, the maximum increase was 2.8%, and for those above ¤40,349
it was 4.3% (van Brederode, 2018). How housing associations administer increases can vary, with some
increasing prices more for those who earn more and less for those who earn less. Housing associations
receive household income information from the central tax office, and they’re only allowed to use the
information for the purpose of calculating rent increases.
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Financing housing
Housing associations
Housing associations are the predominant providers of social housing in Amsterdam. At one time, they
owned more than half of all units in the city. Today, housing associations remain a significant housing
provider, responsible for 43.1% of units (184,300) in 2017, though this represents a decrease from 48.1%
(195,600) in 2011.
Nine housing associations operate in Amsterdam, and all are members of the AFWC. They are legally
required to provide “decent, available and affordable” housing for those meeting the stipulated income
requirements.
The role that housing associations play in providing housing in Amsterdam and the Netherlands has
changed over time. In the 1990s, they began to grow increasingly independent but were still charged
with the goal of improving the city’s provision of high-quality affordable housing, especially in light of
rent increases and shortages.
Housing associations cater to a broad range of tenants, but they do cap the rent in the majority of units
to ensure affordability. They often oversee a variety of units in order to cater to different income
groups, and as part of their role, they can invest in social infrastructure such as schools, doctors,
business incubators and other necessary facilities to create complete, safe and successful communities.
Point-based price setting
Both regulated rentals and housing associations use a point-based system to calculate rent for units
using quality indicators such as floor space, amenities and energy efficiency. Since 2015, property value
has been included as part of the point system. Due to rapid increases in property values in recent years,
this change has impacted the valuation system in an already pressurized market.
Subsidies
In the 1990s, the city made a shift from supply-side subsidies, which aim to support construction, to
demand-side subsidies such as rent allowances for tenants — a change supported by the strong housing
associations in Amsterdam. After 2008, Amsterdam limited such subsidies to households with incomes
of ¤35,000 or less and also provided subsidies to landlords that roughly equaled two months of rent per
year. These payments were determined based on income, rent prices and household size/type.
In 2017, the average housing cost in Amsterdam was 28.3% of income across all households. The
average cost was 27.3% of income for those receiving allowances and 28.8% for those not (Berkers &
Dignum, 2017).
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References
https://www.afwc.nl/english
Berkers, V., & Dignum, K. (2017). Wonen in Amsterdam 2017 Woningmarkt. Gemeente Amsterdam
Federico Savini, Willem R. Boterman, Wouter P.C. van Gent and Stan Majoor. Amsterdam in the 21st
Century: Geography, Housing, Spatial Development and Politics, University of Amsterdam, Institute of
Geography, Planning and International Development Studies.
The Ineq-cities Project, “Amsterdam,” University College London,
https://www.ucl.ac.uk/ineqcities/atlas/cities/amsterdam
Jaco Boer, There Is Power in Unity, AFWC, March 2017,
http://www.afwc.nl/fileadmin/user_upload/Documenten/AFWC/Bestanden_2017/AFWC_100_jaar_EN
_march_2017.pdf
Jeroen van der Veer, Migration, Segregation, Diversification and Social Housing in Amsterdam, AFWC, June 19,
2017,
http://www.afwc.nl/fileadmin/user_upload/Documenten/AFWC/Bestanden_2017/5_Amsterdam_Jeroe
n_van_der_Veer.pdf
Maarten van Brederode, Affordable Rental Housing in Amsterdam and Berlin: A Comparison of Two European
Capital Cities, University of Amsterdam master’s thesis, June 11, 2018,
http://www.afwc.nl/fileadmin/user_upload/Bestanden_2018/THESIS_Maarten_van_Brederode_FINAL.P
DF
Melanie Hekwolter, Rob Nijskens and Willem Heeringa, The Housing Market in Major Dutch Cities, De
Nederlandsche Bank, 2017,
https://www.dnb.nl/en/binaries/The%20housing%20market%20in%20major%20Dutch%20cities_tcm47
-358879.pdf
Michael J. Wintle, “Amsterdam,” Encyclopaedia Britannica, https://www.britannica.com/place/Amsterdam
StatLine, “Population Dynamics; Birth, Death and Migration per Region,”
http://statline.cbs.nl/Statweb/publication/?DM=SLEN&PA=37259eng&D1=0-1,3,8-9,14,16,21-
22,24&D2=0&D3=93&D4=0,10,20,30,40,(l-1)-l&LA=EN&VW=C
World Cities Culture Forum, “Amsterdam,” 2020,
http://www.worldcitiescultureforum.com/cities/amsterdam/data
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6. Tokyo
Key findings
1. Planning rules have been relaxed. The city has encouraged development by simplifying zoning
rules, increasing density allowances and giving all landowners near-total freedom to develop on
land that they own. This freedom is available not only to large developers but to anyone who owns
land and can secure the funding and financing required.
2. Decision-making is top-down. Planning decisions are made at the national level, enabling a more
strategic approach. However, sometimes the goals of the federal government and the desires of
the local government are at odds.
3. The government provides financing. A program offering government-backed low-interest, long-
term mortgages allows much of the population to purchase property with confidence and without
the risk of unaffordable interest rate increases.
4. There is a large-scale housing and infrastructure agency. A government-backed agency aims to
enable and stimulate urban development. This ensures that the national government has a stake in
new development and a vested interest in its success. In addition to assisting developers, the
agency can deliver longer-term, more strategic development projects.
5. Housing is a home, not a commodity. Housing is seen as a necessity and not a commodity that can
yield a profit. The relatively short life expectancy of Japanese housing reinforces this culture. For
example, it is common that a housing unit be purchased and at the end of its useable life to hold
nearly no value, it is not expected to be a means for the owner to accumulate wealth.
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Housing stock overview
The most common housing tenure in Tokyo is rented housing, with just over 2.4 million units being
privately rented. Between these private rentals and owner-occupied units, the total number of units
provided through the private sector is almost 5.4 million units. In Tokyo, government-owned housing
makes up a relatively small proportion of the housing stock.
Housing type (2013)
Number of
dwellings
Percent
of
category
Percent of total
housing market
Rentals
Owned by local government
268,200
9
4.1
Owned by Urban Renaissance or other
public corporations
232,200
7
3.6
Private rentals
2,432,200
75
37.6
City provided social housing
167,000
5
2.6
Total rentals
3,100,200
47.9
Owner-occupied
2,962,100
45.8
Other
410,300
6.3
Total dwellings
6,472,600
100
47.9
45.8
6.3
Housing Type in 2013 (%)
Rentals Owner-occupied Other
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Policy
In Tokyo, and in Japan as a whole, buildings (including housing) are rebuilt every 20 to 30 years, largely
to accommodate rapidly changing technological advances in earthquake resilience. This results in a
constant cycle of work for construction workers and a higher demand for new properties. At the end of
its 20- to 30-year life span, housing can be virtually valueless.
Due to the changing policy rules around land use planning and this constant recycling of housing and
buildings, there tends to be less opposition to housing in Japan as a whole.
Land use
The national government is responsible for most land use planning decisions, with a particular
preference for projects that boost economic development. Japan uses a relatively simple 12-category
zoning system for all land use planning across the country. Because land use planning happens at the
national level, some decisions may conflict with local government aspirations.
Urban density standards have been increased and housing regulations have been relaxed so that
housing can be built almost anywhere, with limited protections for older neighborhoods. Together,
these measures encourage high-density urban development to occur with relative ease. Most
developments are multifamily buildings of three or more stories in height. However, this rapid growth
and push to density has not resulted in the average unit being smaller.
According to estimates, 100,000 new units are started every year in Tokyo alone, which means that
supply matches, and at times surpasses, the total demand in the city. Though still very expensive, Tokyo
is often ranked as one of the most affordable megacities for housing.
Importantly, Japan focuses on supporting this urban development with a fast, efficient and extensive
transportation network centered on high-capacity public transit serving its urban populations.
Urban Renaissance Law
One of the biggest changes to occur in Japanese planning was the passage of the Urban Renaissance
Law (URL) in 2002. During the 1980s, like much of the more “westernized” world, Tokyo and Japan
were grappling with the issue of inflated housing markets, with bubbles that were at risk of collapse. The
government recognized that this issue was partly exacerbated by urban and land use planning
approaches.
To remedy the problem, the URL removed municipalities’ abilities to control private property and gave
land and building owners the right to build a broad range of uses on their land, at times in direct conflict
with what their neighbors or the local government wants.
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Financing housing
Urban Renaissance Agency
The national Urban Renaissance Agency (URA) seeks to create a demographic mix in the developments
it controls. One way it encourages this mix is by offering discounts to family members who move within
prescribed distances of older relatives or to family members who are raising children. Discounts could
be 5% over five years, increasing to 20% based on established income criteria. By building mixed-age,
supportive communities, URA aims to reduce the cost for the state to provide services for these groups
(for example, elder care).
The agency offers specific discounts for those raising children in these units and offers three-year fixed-
term contracts to support greater security.
Anyone who wants to access URA units must meet certain criteria. For example, household income
must be at least four times the rental amount, to ensure that those moving into the developments can
legitimately afford to live there.
For more information on URA, see the “Large-scale urban development” section below.
Government-backed mortgages
In order to support homeownership, the Japanese government has recognized the potentially
prohibitive nature of securing mortgages and now offers low-interest mortgages directly through the
national government. These are locked in for 35 years, offering both security and longevity. Under the
program, a $300,000 mortgage at 1% interest for 35 years equates to $850 per month for a three-
bedroom home in Tokyo.
Minpaku (short-term rentals)
“Minpaku” regulations were introduced in June 2018 across Japan to support a controlled growth of the
short-term rental market. Previously, the Minshuku system required any short-term rentals to be of a
certain size, to be licensed and to have a management person on-site, though these regulations were
not enforced strictly. With the changes in the law, authorities can control where short-term rentals are
located. Any premises offering this type of lodging must be registered with the land ministry.
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Large-scale urban development
Urban Renaissance Agency
Established in the 1950s as the Japan Housing Corporation, what is now the Urban Renaissance Agency
was intended to stimulate growth during a postwar economic recession. Even though it has undergone
many changes (to its scope, its name and its powers), URA continues to focus on economic stimulation
and urban development.
In its role as a housing provider, URA operates much like municipal social housing providers. It often
provides social housing in high-rise apartment buildings on the urban fringe of Tokyo and other cities,
resulting in a portfolio of around 167,000 units under its management in the Tokyo metropolitan area
alone in 2016.
Today, URA seeks to create attractive, safe and disaster-resilient urban spaces, and cities that people
want to live in. Its priorities lie in the following areas:
• Urban rejuvenation and renewal: working with local authorities and businesses to improve the
competitiveness of cities
• Living environments: managing around 740,000 housing units (nationally) to ensure that housing
is comfortable and meets the needs of residents of all ages
• Disaster redevelopment: supporting areas impacted by previous earthquakes and at risk of future
disaster events
• Suburban environments: managing the impacts of aging and declining populations in towns and
suburban areas and creating attractive environments
As described in the “Financing housing” above, URA seeks to ensure that its housing developments
reflect a mix of demographic groups.
The agency can play many roles in the urban development process, including land assembly,
coordination/project management, brokering deals, executing the project, master planning and
advising.
URA also engages in nationally significant infrastructure projects, in particular those that enable urban
development. The agency works in collaboration with private companies and regional public agencies.
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References
Barbara Eldredge, “Why the Average Family in Tokyo Can Own a New House for $850/Month,” Curbed,
Feb. 3, 2017, https://www.curbed.com/2017/2/3/14496248/tokyo-real-estate-affordable-homes
e-Stat, Tokyo datasets, https://www.e-stat.go.jp/en/stat-
search/files?page=1&query=tokyo&layout=dataset&toukei=00200522&tstat=000001063455
Japanese Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry,
2016 Economic Census for Business Activity, June 28, 2018, https://www.stat.go.jp/english/data/e-
census/2016/pdf/k_gaiyoe.pdf
Japan Property Central, “Forecast of New Apartment Prices in Tokyo from 2018 Onwards,” June 1, 2018,
http://japanpropertycentral.com/2018/06/forecast-of-new-apartment-prices-in-tokyo-from-2018-
onwards/
Noah Smith, “States Should Look to Tokyo to Increase Affordable Housing,” Orlando Sentinel, March 21,
2018, https://www.orlandosentinel.com/opinion/affordable-housing/os-ed-california-housing-density-
near-transit-tokyo-example-20180321-story.html
Scott Beyer, “Tokyo’s Affordable Housing Strategy: Build, Build, Build,” Forbes, Aug. 12, 2016,
https://www.forbes.com/sites/scottbeyer/2016/08/12/tokyos-affordable-housing-strategy-build-build-
build/#6ddc7fdc48d5
Stephen J. Smith, “Japan Shows the Way to Affordable Megacities,” Next City, Jan. 22, 2014,
https://nextcity.org/daily/entry/japan-shows-the-way-to-affordable-megacities
Urban Renaissance Agency, Profile of UR, https://www.ur-net.go.jp/profile/english/pdf/profile_en_all.pdf
“Urban Renaissance Housing in Japan: What, How, and How Much,” City-Cost, Aug. 3, 2017,
https://www.city-cost.com/blogs/City-Cost/z4qrG-living
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7. Singapore
Key findings
1. The city owns most of the land. Not only does the city own the majority of land resources, until
recently it was able to purchase additional required land at existing land values instead of paying
premiums for land that has permission for new development or increased densities. This has
enabled Singapore to execute extensive housing construction without the hindrance of expensive
land assembly and high land purchase prices, which ordinarily would have made such projects
unfeasible.
2. There are strict controls on land sales and the price of land. Regulations prevent individual
landowners from profiting off the value that public spending adds to a property. That policy,
combined with the city’s ability to sell the land it has accumulated to control land prices, results in a
tight control of costs that might otherwise make development unfeasible.
3. The government has an extensive program to provide housing. The government (national and city
are one and the same) takes a strategic, long-term approach to housing delivery, with significant
state investment. A comprehensive and highly accessed housing ownership scheme has been
created.
4. The tax/pension system focuses on homeownership. In contrast to many other countries,
Singapore’s tax and pension system is centered on helping citizens move into homeownership.
Employer contributions to the housing scheme are required, which means that employers indirectly
support their employees in accessing secure housing.
5. The governance structure is relatively flat. As a city state, Singapore does not require
complicated and lengthy collaboration agreements between government levels. The single
government can be relatively nimble and responsive to change, acting with total autonomy.
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Housing stock overview
Singapore is a city state with a strong political party that owns most of the land resources. This
concentration of ownership has allowed the government to execute an extensive house-building
scheme. The Housing and Development Board (HDB) has developed most of the city’s housing units.
Because Singapore’s tax and pension system supports homeownership, the great majority of citizens
own their homes — 90.3% in 2015.
Popula
tion (in
thousa
nds)
Total
dwelling
s
HDB
dwelling
s
Private
dwelling
s
Persons per
dwelling
HDB
dwellings
as percent
of housing
stock
Resident
homeown
ership rate
1970
2,075
305,833
120,138
185,695
6.8
39
29.4
1980
2,414
467,142
337,198
129,944
5.2
72
58.8
1990
3,047
690,561
574,443
116,118
4.4
83
87.5
2000
4,017
1,039,677
846,649
193,028
3.9
81
92.0
2010
5,076
1,156,732
898,532
258,200
4.4
78
87.2
2015
5,535
1,296,304
968,856
327,448
4.3
75
90.3
1970–80
16
53
181
–30
–24
84
100
1980–90
26
48
70
–11
–15
15
49
1990–00
32
51
47
66
–12
–2
5
2000–10
26
11
6
34
14
–5
–5
2010–15
9
12
8
27
–3
–4
4
1970–2015
267
424
806
176
–37
192
307
327,448
968,856
Building development
type (by number of
dwellings)
Private developers
Housing and Development Board (HDB)
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Policy
Land Acquisition Act (1966)
Established by the People’s Action Party, this act assigned land assembly and development powers to
the state agency HDB. The act stipulated that HDB has the power to acquire land:
• Where the development is considered to be for any public purpose
• From any person, corporation or statutory body if the development is considered to be of public
benefit, utility or interest
• For the development of residential, commercial or industrial uses
In order to ensure reasonable compensation was paid for land, regular dates for land value reviews were
set, with all land receiving government updated valuations, which until 2007 set the price to be paid
should land be sold. After 2007, land prices were no longer set by the government but rather land
values are now determined by the market.
The principles behind the act were that no private landowner should benefit from development that has
taken place at public expense and that the price of land should not be more than it would have been
had the government not contemplated development in that area.
This act has allowed the government to purchase, assemble and develop much of Singapore’s land area.
Currently, the government owns approximately 90% of Singapore’s land.
Land use: planning
Due to the government’s near-complete ownership of land, the sale and use of land are tightly
controlled, with all decisions made at the national level. The Government Land Sales Program controls
land use, density and area permitted for developed on each development site, and project completion
timelines.
A Concept Plan and Master Plans guiding long-term strategic planning are regularly reviewed and
updated (see “Urban Redevolopment Authority,” below).
Urban Redevelopment Authority
The Urban Redevelopment Authority (URA) was born out of HDB in 1974, as Singapore’s land use
planning and conservation authority under the Ministry of National Development (though the
department had existed as part of HDB for a number of years before this). The original unit was focused
on improving identified priority areas, such as central commercial zones, which evolved to the planning
of new towns to accommodate the growing population as well as planning for industrial growth.
The overarching aim of the authority is to ensure that Singapore is a place where people want to live,
work and play. In order to achieve this, the authority has worked on slum clearance projects,
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infrastructure planning and improvement, resettlement projects and land sales (as well as parking
management).
The scope of URA was expanded when the Ministry’s Planning Department and Research and Statistics
Unit merged with URA. The merger allowed the authority to manage planning work across Singapore
more comprehensively, including urban conservation efforts.
Today the authority’s main functions broadly cover:
• Land-use planning: URA manages and updates the overall Singapore Concept Plan, a long-term,
strategic 50-year vision. Updated every 10 years, the Concept Plan forms the framework within
which more detailed Master Plans are developed. Master Plans have a 15-year horizon and are
reviewed every five years. These set land uses and densities, which guide land sales and
development.
• Development control: The authority manages and monitors development to ensure that it has
occurred in accordance with the Concept and Master Plans, sets detailed planning codes and
restrictions to be used by developers and reviews and updates guidelines on a periodic basis.
• Land sales: URA still acts as the Singaporean government’s main land sales agent through six
monthly land sales announcements that are in line with the Concept and Master Plans.
• Conservation: URA identifies and protects selected buildings based on cultural or heritage value,
provides restoration guidelines and protection notices and even holds annual awards for
conservation efforts.
• Urban planning and design: URA still carries out key planning and design efforts for the city center.
• Education and engagement: The authority also plays a role in educating and engaging
professionals and the public around architectural, urban design and planning subjects. It offers real
estate advice to buyers, investors and developers as well.
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Financing housing
Central Provident Fund (CPF)
Unlike other countries, Singapore does not operate a conventional, tax-based pension scheme. Instead,
the government aims to help all citizens own their home outright upon retirement and expects that
they’ll have savings of their own.
A mandatory saving scheme ensures that most working citizens (with some exceptions) save at least
20% of their monthly incomes, with employers also contributing 17%. The funds accumulated in this
savings scheme can then be used as a deposit for an HDB-developed property, as well as for mortgage
contributions. The savings scheme pays a minimum interest rate of 2.5% per year. The program also
offers the option to “right size” your home (downsize) to release further equity as required.
Singapore National Treasury
The Singapore National Treasury allocates approximately S$1.8 billion (in 2015–16), or 2.4% of the annual
national budget, to housing. This funding is used to offset the annual deficit of HDB.
National grants and subsidies
In addition to contributing to the operation and development costs of HDB, the Singaporean
government makes available a series of grants and subsidies to enable citizens to purchase housing.
• Means-tested grants are available for both first-time and second-time buyers, whether they are
purchasing a new or secondhand HDB unit. The grant level available for second-time buyers is less
than for first-time buyers. While citizens are encouraged to purchase new HDB units, in 1994 grant
funding was extended to those who buy secondhand units.
• To support family-led care for elderly people, grants are available for those purchasing units in the
same neighborhood as their parents.
• A Special Housing Grant was introduced in 2011 and further expanded in 2013 and 2015 to enable
citizens to purchase larger properties (four-bedroom units) in less mature neighborhoods. Up to
S$40,000 is available for purchases in new developments in less desirable areas on the urban
fringe.
• The Additional Housing Grant applies to first-time buyers in lower-income households, with
earnings of less than S$5,000 per month. Various restrictions apply to the property type, including
outstanding lease length and size. The grant covers up to S$40,000.
• A Step-Up Grant seeks to encourage those living in two-bedroom units to move to three-bedroom
units to free up smaller, more affordable units for new and expanding families. The grant can be
obtained for purchases in new and less mature HDB developments.
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Large-scale urban development
Housing and Development Board
The Singaporean government’s housing delivery agency develops and manages the majority of housing
in Singapore. HDB has an annual budget of S$17 billion, which is paid for by property sales, government
land sales and government loans, but HDB is also able to borrow directly from banks or the bond
markets. Since its inception in the 1960s, HDB has received approximately S$28 billion in grants from
the government.
Every year, HDB releases a new supply of soon-to-be-built apartments that are targeted at first-time
buyers. HDB units are sold below market-rate prices with 99-year leases (HDB retains land ownership).
Those interested in the new supply of units must apply to be selected and then wait for the unit to be
completed, which can take up to four years.
Due to the tight controls that HDB has on its own units, and its relative monopoly of the market, the
application process is competitive and certain requirements must be met, including ethnicity targets,
which aim to ensure that the racial representation in each block is similar to that of Singapore as a
whole.
HDB also provides cheap and secure long-term mortgages and financing packages to those citizens
purchasing an HDB unit. In an effort to combat Singapore’s low birth rate, married couples are given
priority when purchasing. Older owners can sell back to HDB the part of their lease that they do not
expect to use, which not only frees up money for retirement but allows HDB to regain control of units to
redevelop and resell.
Until 1989, the rules for the purchase of HDB housing were extremely strict, but they have since been
relaxed in the following ways:
• The income threshold requirements for the resale of HDB units has been removed.
• Permanent residents are now able to purchase resale units for owner-occupation purposes.
• Those who previously owned private property are also allowed to purchase resale units for
owner-occupation purposes.
• Owners of HDB units are now allowed to invest in the private housing market.
• Single citizens over 35 have been allowed to purchase HDB resale units since 1991.
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References
Sock-Yong Phang and Matthias Helble, Housing Policies in Singapore, Asian Development Bank Institute
Working Paper, March 2016, https://www.adb.org/sites/default/files/publication/181599/adbi-
wp559.pdf
Urban Redevelopment Authority website, https://www.ura.gov.sg/Corporate/
Valerie Chew, “Urban Redevelopment Authority,” Singapore Infopedia,
http://eresources.nlb.gov.sg/infopedia/articles/SIP_1569_2009-09-18.html
Wendell Cox and Hugh Pavletich, “Introduction: Focus on Singapore,” 16th Annual Demographia
International Housing Affordability Survey, 2020, http://www.demographia.com/dhi.pdf
“Why 80% of Singaporeans Live in Government-Built Flats,” The Economist, July 6, 2017,
https://www.economist.com/asia/2017/07/06/why-80-of-singaporeans-live-in-government-built-flats
https://www.population.sg/articles/population-in-brief-2019-what-do-you-need-to-know
https://www.population.sg/quality-of-life
aecom.com
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