The impact of the coronavirus on the housing shortage: what does Gawein Minks, RED Concepts and WeBuildHomes director have to say on the subject?
Tell us about yourself
My name is Gawein Minks and since 2018 I’ve been one of the proud partners and director of the unconventional project developer RED Concepts, with its equally unconventional housing platform WeBuildHomes. I’m sometimes seen as a bit of an odd one out. Because I look at areas that most developers avoid, and try to identify and seize opportunities to make projects a success for everyone involved. That’s why RED Concepts/WeBuildHomes and I are such a good fit.
RED Concepts develops and realises innovative real estate concepts. RED is best known for the redevelopment of the NDSM wharf in Amsterdam in 2008 and the well-known head office of MTV Networks, now known as Viacom. WeBuildHomes was founded in 2012. Could you tell us what WeBuildHomes is exactly?
WeBuildHomes is a housing platform that makes living in designer homes (homes designed by well-known architects) attainable for buyers with an average budget. In other words, buyers who strangely enough have had been given very little to choose from by traditional developers in recent years.
We have filled a library with more than 45 homes that are all designed by different architects. Because these homes are based on existing designs and have already been developed, the investment in design and any learning costs have already been paid. We also know what additional options buyers like to see, such as splitting the attic in two or the option of having their kitchen at the front of the house. We have the homes in BIM and can realise them with any number of players. This is why we can develop and offer these homes relatively inexpensively.
For each project, we team up with the local authority and a developer or housing corporation to choose a selection from the library that’s a good fit with the urban development plan and the chosen target group. Prospective buyers can then choose their dream home from that specific library. Local authorities also benefit from this because they get streets with a unique streetscape. The homes combine to create a street with varied facades and that has a much more organic feel, so to speak. Neither we nor the local authorities influence the residents’ choices. Isn’t that great? This means we no longer see the standard rows of 20 identical homes in what are sometimes boring development areas. As a resident, you want to be able to point out which house is yours from a distance.
The Netherlands has had a housing shortage for some time now. Every local authority and the majority of Dutch residents are facing the same problem. What are your views on this?
I read the report from the construction sector’s economic institute EIB (Economisch Instituut voor de Bouw) just before the coronavirus containment measures were introduced. And again afterwards. The second time around, it felt strange that the focus of the report is entirely on the nitrogen emissions problem, an area in which the public health and environment institute RIVM also plays a fairly crucial role, by the way. A home is much more of a necessity. We are facing both quantitative and qualitative shortages and everyone knows that, ultimately, your home is a major factor in your happiness.
The report states, unintentionally but no less clearly, that the figure associated with the aim of 300,000 homes, the ‘magical 75,000 a year’, should really be more than 85,000. This bearing in mind that just 57,000 building permits were granted in 2019. And please note that this does not mean we suddenly have 57,000 new homes ready to move into. That figure will fall below 50,000 in 2020, unless the government also changes course drastically on this front. The good news is that it is possible.
How do you see the future now that we are all faced with the effects of the coronavirus outbreak?
People will always need homes. The housing shortage will not suddenly disappear after the coronavirus period. Movement is the key to the problem, because if people don’t move the house market is basically locked up (hence the key). But people have to take a step to create that movement. And that move has to be made easier by local authorities, developers and other investors. However, people also need to have confidence in the future to take that step.
Unless the government intervenes, the recovery will take a lot longer than the time the coronavirus dominates our headlines. The procedures in the Netherlands are sound. That’s why the Netherlands is such a beautiful and pleasant country to live in. But as a market player, you spend something like 18 months years in consultations before you can even submit a permit application. That’s where we could gain some time! Especially now, the government could open virtual desks for market players. Reward speed and innovation by interacting with each other earlier and more frequently using digital interaction.
An added bonus is that the start-up phase is a relatively low capital-intensive phase, so there’s not much to worry about in the current time of liquidity shortages market players are facing. And if at some point we can reach additional agreements with local and other public authorities on aspects such as the payment of fees, that is if we should need another incentive, we would basically be changing the system to benefit those looking for homes.
This is we believe that this is a great time to be making preparations. And this continuity means we can also keep all the companies, architects and consultants in the market in business, which is an important social consideration the government can only welcome.
Is there anything you’d like to say to local authorities or housing corporations in closing, from your perspective in the real estate sector?
Yes, sadly two clichés but never mind. Put them in the right perspective and they’re still outside the box. From our experience over the years, we know that there are really good people working at local authorities. They’re easy to talk to, often happy to contribute their thoughts and are generally very communicative. They’re also working from home now, but are still keen to take steps to help their town or city. Let’s set up digital core teams and digital contact desks for the coming period, specifically to facilitate the rapid construction of homes. Reduce the pre-consultation phase to two quarters from the current average of 18 months. At WeBuildHomes, we’re already in talks with two local authorities in such a digital pressure cooker. It’s Fantastic!
The second item: real estate has its cycles and they usually start in a period of high confidence. That confidence will be lower in this period than it was previously. But if you look at all the 75,000 and 85,000 figures, you’ll also see that the demand is still there. The government can play a facilitating role to spread the capital investment the market needs to make. For instance, by linking the payment of fees to homes being taken into use or by encouraging smarter housing concepts that are both less of a burden on the environment and that can be built more quickly. Just take a look at our new project in Noord Scharwoude, which we are building using timber construction combined with Cross Laminate Timber (CLT). And yet again, outside the box.
My advice to local councils is: keep moving. The shortages in the housing market will persist. Let’s not have months of delays due to of the measures taken to contain the coronavirus, while PFAS is also still playing a role in the background. Let’s reduce the usual time needed to go through the process before you can submit a permit application. And let’s have digital consultations, so instead of adding more delays we can actually reduce the amount of time in some places!