Do you know why the owner of a shopping center is the best landlord? Because he offers users the freedom to set up shop at their own discretion. This is something landlords like housing corporations can learn a lot from. It is unfortunate that those organisations seem to have no economic interest in giving tenants that kind of freedom. The government should take proper measures. Measures to ensure that no more public money drains off to landlords whose tenants can not freely live their lives according to their changing needs. Can you imagine the whole range of possibilities? I will share them with you in this blog. So read on!
Have you ever heard a shopkeeper complain about his landlord interfering with how he should organize his store? That the owner of your cities shopping mall makes and arranges the shelves to be filled later on by Wallmart. That the Applestore and Gap at 5th Avenue get instructed by their landlord what their retail formula should look like or should fit in? Absolutely unthinkable, of course! In that scenario, the property owners sooner are the cause of bankruptcies than fellow victims of economic circumstances.
Keeping hold on the business
For each store it is crucial to have a firm hold on all factors of their customers’ shopping experience by holding enquiries regularly. How to influence buyers in their very specific and changing behavior is a true profession. Customers respond to and follow the (social) media, their social situation and matters like music, fragrance, color and store layout. Every retailer and catering entrepreneur wants and needs to distinguish himself from the cutthroat competition as well as to meet shifting needs. Looking at the bankruptcy wave in the middle segment is becomes clear that customers either go for really cheap or real luxury shopping. Apple is doing extremely well and takes 80% of the profits on the phone market with the most expensive mobile devices. Miele does it on the market for household appliances and Chanel, and Paco Rabanne on the perfume market.
How different it is the housing market! Landlords offer premises with a standard format, bathroom and kitchen. As a tenant you have hardly any or no influence at all. If you want something different, then moving is the obvious choice. Or maybe switching from renting to buying, if that is an option for you. In the Netherlands, neither of them is easy.
Shortage against vacancy
On the Dutch housing market the government deliberately creates a shortage. She releases a limited amount of building sites, for example. For the countryside there often is a ban on construction and several restrictions on height and acreage apply. The ideas behind the created shortage are:
- keeping the countryside open;
- being able to ask and receive the jackpot per square meter from developers;
- prevention of unsightly vacancy and deterioration. If there are plenty of houses to choose from you can easily move for the next one whenever it suits you. As a member of the general public we applaud this, but as an individual we don’t.
In the end, this policy will go at the expense of two things: public money and the freedom of the individual.
Waste of money
First of all jackpot prices for land will give municipalities only an advantage in the short term. Especially where building permits for office buildings are concerned. The political reaction to the huge vacancy rate in office buildings is typical of the Netherlands. We must intervene, politicians say. So a problem created by property owners lacking revenue who burden society with empty buildings is now solved with public money. Municipalities make big cost to adapt public space (street and sidewalk) and placing utility connections to offices that are transformed into living space. This transformation can only happen if they also change the development plan. That also goes at the expense of the municipality. It is a similar scenario to the banking crisis that was also about private gains and public losses. Totally unacceptable, of course!
That shortage policy has another drawback. It restricts users of housing hugely in their freedom of choice. Also because Dutch homes are relatively expensive, compared to the countries around us. I’d like to introduce a new kind of freedom of choice that will benefit the user, the property owner and the public interest, all in one go. Due to the limited amount of new homes being built, there is hardly any choice in which area and in which home you want to live. That is why I advocate full freedom of choice for everyone in arranging their own fit-out. Then you can create your ideal home in the building you live and work in, and moreover you will not have to move when your needs change. Your home follows your needs, because you decide. This can lead to competition in quality and price in the offer to residents.
It is my opinion that offering variation is the core business of the largest homeowners in the Netherlands: the housing corporations. Half of the housing stock consists of rental houses and corporations are renting out 75% of those. So there’s a nice responsibility task for them. Only at the moment it is true that a corporation does not earn more money when it is good for its residents by giving them the freedom to create their own fit-out. Indeed, they must currently use their own resources and employees to organize such an offer. How can we change this?
BRIQS advocates a simple and straightforward solution towards greater freedom for users: realize a building in two steps, both structurally and in terms of licensing. First make the base building with construction, façade and roof. When this base building is officially approved and delivered you can sell it or rent it out, as a whole or in parts. Then as a renter you make your own arrangements for the lay-out and fit-out for which specialized suppliers deliver their own direct consumer warranties.
Does the fit-out no longer suit your wishes, there is no need to move, because you can adjust the lay-out. And when you own the base building this is also the moment to check the base building to new building standards, energy saving measures or guidelines for earthquake resistant construction as is much needed in the Dutch province of Groningen. For the rest, you keep your hands of the base building, unless you want a big extension to your home. That the structure will no longer be damaged is also important for the controlling authority, for the safety of the building is guaranteed.
So we can create a lot more freedom and independence for residents by dividing homes in base building and fit-out. And we immediately prevent the dreaded vacancy and deterioration in our densely populated country. Owners of shopping centers already let their entrepreneurial tenants free in their choice of fit-out. For housing corporations there apparently is no economic reason to do so (yet). Is it for the government and politicians to decide on the separation of base building and fit-out? The governments of Japan and South Korea already intervened. The benefits of their intervention are evident.
Landlord or government?
What do you think? Is it the landlord’s or the government’s turn to create more freedom on a large scale for users and fight vacancy in a new way. Please, share your thoughts with us below.
To your health and well-being.