plenary 2:

21-04-23

Challenge the future

DelftUniversity ofTechnology

Social enterprise and hybridity in housing organisations in Europe: a response to financial and regulatory challenges?

Plenary 2:

International perspectives on social enterprise and hybridity in housing

organisations.

Darinka CZISCHKE, in collaboration with Prof. Vincent GRUIS

Dept of Real Estate & Housing, Faculty of Architecture, Delft University of Technology (the Netherlands)

ENHR conference 2011, Toulouse, France

2Titel van de presentatie

The concept of social enterprise

• “…a business with primarily social objectives whose surpluses are

principally re-invested for that purpose in the business or the community,

rather than being driven by the need to maximise profits for shareholders

or owners” (DTI 2002)

• “…nor-for-profit private organisations providing goods or services directly

related to their explicit aim to benefit the community…” (Defourny et al

2008)

• “…organisations that have been designed as private enterprises, operating

in a market situation, that at the same time employ their means to fulfill a

societal objective that is interwoven with (or parallel to) the common

interests, that produces goods and services and that uses its profit entirely

for the realisation of its societal objective.” (NTMO 2003)

Wide variety of definitions:


Social enterprises:

Source: Brandsen et al. (2005), based on Zijderveld (1999) and Pestoff (1992).

Between the State, Market and Society


Social enterprises:Inherent hybrid nature

The Conceptual Classification Framework – The Social Economic Continuum for NI and NW ROI (Crossan, 2009)


‘Public’ providers

‘Private’ providers

L.A. Public law

bodies

Private law entities (civil or business), non profit Coop For-profit Assoc Coop Companies/societies Other

Public owners

Private or mixed owners

AT * * * * *

BE * * *

DE * *

DK * * *

ES * *

FI * * * *

FR * * *

IE * * *

IT * * * *

NL * Found

PT * * NGOs *

UK * * * * * *

Source: Czischke, based on Bauer (2011)

Types of social housing providers in the EU


Towards a typology of social enterprise in social housing in the EU

Differences:

• Legal status• Organisational forms• Size, structure• History

Commonalities:

• Mission (social, not profit maximising)

• Continuity (permanent character)

• Long term strategic plan• Stated values• Defined target groups• Legally ‘approved’ or self-

defined social (housing) mission.

The social enterprise model?


Adaptative strategies to different institutional contexts and logics

Organisational archetypes in the social housing sector (Gruis 2008)


How are housing organisations in different settings responding to current contextual developments?

Two cases:

• The Netherlands

• England


The Netherlands

• Housing associations under increasing financial pressure from governmental taxes, reduced income from sales and tighter conditions for finance.

• EU / Dutch government ruling:

• Split between ‘social’ activities which may be funded with state aid and ‘commercial’ activities which may be not.

Impact on financial architecture (and on funding levels?)

• Narrower target groups: income ceilings Impact on tenants’ profiles, sustainable communities, affordability?


Responses by Dutch housing associations: 1. Narrowing scope of activities

Average balance of pairs and possible priorities in 2007 & 2010 (Gruis 2008)


Responses by Dutch housing associations: 2. Reducing demolition & development activities, increasing refurbishment of existing stock

Source: Central Housing Fund (2011)


Responses by Dutch housing associations: 3. From a transition to ‘social innovators’ to ‘social housing investors’

Source: Central Housing Fund (2011)


Responses by Dutch Housing associations: 4. However - keep active role in society

• Aim to maintain a wide network and cooperation with societal partner organisations to stay active in broader societal interests.

• Regional specificities play pivotal role on housing association’s continuous role as social enterprises in the communities where they operate.


England

• Major changes to social housing policy and regulation coupled to wide-ranging welfare reform creating a new environment for housing associations:

• Reduction in capital grants

• Possibility for social landlords to charge higher social rents to new tenants (up to 80% market rents)

• Housing benefit significantly cut

• Localism bill, ‘big society’ discourse: emphasis on the role of third sector actors in service delivery

• Government pledges 150,000 new social units in four-year term.

Challenges and opportunities


Responses from English housing associations:

• Less capital funding => more debt => higher risk

• Financial strength and business strategy of each company determining new development levels

• Most going for considerable lower development levels (caution)

• Concerns about affordability (insider – outsider dilemma)


Responses from English housing associations:Shifting position between the State, Market and Society?


Conclusion

• Social enterprises in housing significantly influenced by current financial and regulatory constraints.

• However, in line with their social mission and their hybrid nature, still aiming to counterbalance these pressures with staying active in wider societal interests as much as possible.

• Factors determining different responses (State, market or community orientations) include: financial strength, regional context (housing markets), leadership, consistency of core mission…

plenary 2:

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