intervention strategies for renovation of social housing estates

Social housing renovation Italy: which solutions in Dutch housing management model? Chapter 3
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2) Introduction of a professional (re)development department within ATER
The analysis of the situation of ATER above makes clear that if it fails to employ the financial
capacity of its stock, it will not be able to survive in a financial sense. Following the asset
based strategies of Dutch housing associations, one possible direction for ATER could be to
introduce a professional department to set up and carry out restructuring policies for its
housing stock, with a particular emphasis on profitable opportunities. This means, such an
organization must not only look at ATER’s real estate portfolio from a social housing
perspective, but must analyze its housing stock and land from a market perspective. The
basis questions of the department would be: which estates can be sold and/or redeveloped
into the commercial segments of the housing market; which locations where ATER owns land
can be exploited to generate profits and where in the Lazio region do opportunities exist to
develop commercial dwellings and other real estate?
3) Split up ATER into a social and commercial organization
The former direction could be taken further by splitting ATER into a social housing
organization and commercial enterprise. Such a direction could be inspired among others by
recent approaches of some Dutch associations, debates about the organization of the Dutch
social rented sector (e.g. Gruis and Priemus, 2007) and stock transfers from local authorities
in England (e.g. Gruis and Nieboer, eds., 2004). While the social housing organization
maintains the core social housing stock, a commercial enterprise could be set up that
manages the more expensive stock and locations that are more popular on the housing
market. It could also have the task to undertake (re)development activities within and
outside of the ATER housing stock. The commercial organization could be set up as a
daughter organization to social mother as single shareholder. Nevertheless, the commercial
enterprise should have a separate board and should also be exempted from the restrictive
rent and selling price regulations as well as the political context of the mother organizations.
Consequently, it will be enabled to more effectively employ the market value of the housing
stock and land to generate extra financial means. Such a separation would explicitly
stimulate the implementation of more market oriented strategies, since the commercial
organization will have the objective to generate a positive financial return for its mother
shareholder. Furthermore, the transfer of the stock from the social mother organization to
the commercial daughter could be partly financed from private loans, based on a part of the
market value of the transferred stock, thereby making extra funding available to the mother
organization within a relatively short period.
It should be noted that the suggested directions should be seen explicitly as directions that
need further exploration and assessment to check if they are really feasible or not.
Furthermore, it should be noted that a combination of directions is probably more effective
or may be even necessary to achieve a financially sustainable situation. Finally, the success
of each direction depends on the overall market value of ATER’s housing stock and land: is it
high enough to generate sufficient surpluses to finance the management of the core social
housing stock?
The suggested directions are not without drawbacks either. In general they will all lead to
introducing a much more market-oriented housing policy in the social rented sector of Lazio.
Although it can be argued that current policy leads to financial inefficiencies, introducing
market principles in the already relatively small social housing sector could lead to social
problems. Thus, the politicians in Lazio need to balance additional financial support of ATER
against the potential danger of introducing market principles in its operations.
CONCLUSIONS
As a result of the so-called “devolution process” occurred in Italy in 2001, decision-making
and economical power was transferred from the State to the Regions. The State does not
provide extensively financial support to the social housing institutes anymore. As a
consequence of this shift, the institutes had to adapt their structure and management model
to the new system. But some of them did not succeed and are now facing with financial
problems.
Despite of being one of the biggest housing institutes in Italy, ATER Roma, the only housing
institute in Rome, experienced one of the most critical financial crises. In order to survive as
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