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Economic feasibility study of the ordinance requiring 25% of social housing in residential projects in the Brussels-Capital Region
Loïc Géronnez
Expert Territorial Development & Real Estate
"IDEA Consult has assisted the office of the Secretary of State for Urban Planning with the feasibility study and parameterisation of the possibility of a systematic purchase of 25% of housing units by public players in new private residential projects.
Specifically, these social housing units will be purchased at a preferential price (the same price in all neighbourhoods in the region over the next 10 years) by the public players in Brussels. "
The challenge
Against a backdrop of a crisis in affordable housing (with more than 50,000 households waiting for social housing in Brussels), the Brussels Government is considering the introduction of new leverages to speed up the creation of affordable housing. The office of the Secretary of State for Urban Planning has commissioned a feasibility study to examine the advisability of imposing a proportion of public housing in new developments in Brussels, going beyond the existing system linked to town planning charges.
The process & results
Drawing on its experience in town planning regulations, housing policy and financial feasibility, IDEA Consult carried out a study on behalf of the office into the parameters of this measure through various scenarios. In addition to in-house financial and contextual expertise, various public and private players in Brussels were consulted to validate the hypotheses, indicators and feasibility of the proposed models.
The study identified different application scenarios and highlighted regional and international examples to better understand the constraints of this type of measure (Flanders, Wallonia, France, Catalonia, etc.). The results show that :
- It is possible to impose a proportion of public housing in new developments, as is the case in other countries (such as France). This measure promotes social diversity and enables the development of affordable housing, whatever the value of the neighbourhood.
- To make this measure sustainable for players in Brussels and the region as a whole, a fixed purchase price could be set for these homes. This would make it possible to decorrelate the purchase price for public players from the sharp increases in the property market. It should be possible for public bodies not to purchase these homes if their financial resources do not allow it. In this way, the 25% of housing units are sold by the developer on the open market.
- In order to buy at the same price throughout the region, whatever the price level of the neighbourhood, it is necessary to allow for a transition period so that developers and landowners can adapt to these new regulations.
- Setting the minimum threshold for allocated developments at 3,500 m² would account for half of new housing production in the Brussels region.
Following this research and parameterisation work carried out in 2023, IDEA Consult, with its experience of the functioning of the Brussels institutions, continued to support the Secretary of State’s office in 2024 in submitting the text, presenting it to the various consultative bodies and making the necessary amendments in response to the various opinions issued.