Gentrification in Amster­dam

Here my response on questions from an Italian journalist on gentrification in Amsterdam.

1) Amsterdam is currently one of the capitals in Europe with the largest social housing stock. How is gentrification reshaping its human geography? Reducing the low-incomes in some areas, with the purpose of “opening ghettos” and increasing diversity, has it been a succesful policy?

Amsterdam still has a relatively large social housing stock, though in the last two decades significant reductions have been made. Around 60% of housing in Amsterdam is rent-controlled social housing, 46% is social housing owned by housing corporations, another 14% is social housing owned by private parties (source: WiA 2013). As a consequence of the volume of social housing, gentrification in Amsterdam is largely state-led. The core of this government policy is so-called ‘social mixing’: creating more expensive houses in poor neighborhoods, with the official motive of countering segregation. To be sure, social mixing didn’t help to solve the problems of the original inhabitants of poor neighborhoods, as was advertised. But still, before the financial crisis, the policy was relatively successful. Tenants that had to leave their houses for renewal were offered replacement housing, and parts of the middle class would stay in the city instead of leaving for the suburbs. Of course, the gentrification policy always had its price; social housing became increasingly difficult to get by, especially for newcomers, large families and young people. Presently the policy seems to have reached its limits: the amount of existing social housing is roughly in line with the amount of lower incomes in the city. And the problem is that the social housing sector is completely stagnant: nobody is moving in or out. Because whenever a tenant moves, the owner is allowed to change the contract and drastically up the rent. Then there is the crisis in the private sector: the conditions for obtaining mortgages have been made more stringent after the financial crisis, so less people are able to buy. Construction of new owner-occupant housing has therefore lagged behind. All in all, the present situation is quite problematic. A new city government is being formed as we speak, which aims to reduce social housing to 45%. And the national government is aiming to make new contracts temporary in stead of fixed. It will not be a fast collapse, but the future of the social housing sector looks quite bleak.

2) Which areas are currently facing the most aggressive re-maquillage and identity loss?

Especially the popular neighborhoods within the ring road in Amsterdam are experiencing fast changes. For example the Indische Buurt in the East, large parts of the North of Amsterdam, and what is called the New West. Of course these areas did not have fixed identities to start with. A sizable part of the original inhabitants, the white working class, moved out as part of the large-scale suburbanization in the seventies. And there was a large inflow of migrants – predominantly the former guestworkers from Morrocco and Turkey and immigrants from the former colony of Surinam – who came to live in these neighborhoods. Presently a new shift is occurring, now that young, higher educated people are increasingly interested to stay in the city and enjoy the urban life style. Café’s, restaurants, galleries and little boutiques are opening up everywhere to serve the needs of what has been called the ‘new urbanites’. These shops add some much-needed life to the neighborhood, but the problem is that socio-economic segregation is still widely present. And that a big part of the population on lower incomes, be it minorities or students or workers in the creative sector, are now dependent on temporary housing arrangements. That, actually, is where the largest part of housing stock transactions take place.

3) When was ‘urban regeneration’ officially kickstarted in Amsterdam?

The ground was set in 1995, when the housing corporations were semi-privatized and subsidies for the construction of social housing were abolished. Ever since, the government and the housing corporations (private entities that are to a degree publicly regulated) have been looking for a new model. For a while, selling social housing provided the housing corporations with enough money to maintain the core volume of social housing, even though the total volume was slowly but steadily declining. One must also consider that in the nineties the economy was booming and Amsterdam became a rich city, where it had been poor in the eighties. Large real-estate projects were started, and the amount of social housing was considered excessive. We are now living at the end of this period. The city is still rich, but incomes are not rising anymore; rents are going up faster than incomes, segregation is increasing. Presently the regeneration model is becoming dysfunctional: not enough people are actually able to buy a house, considering the high price of real estate; and the national government is implementing a tax on housing corporations that is hemorrhaging them of funds. The result is that very little new housing is constructed in a city that is still growing in terms of inhabitants. The right wing parties in the city are eager to privatize the social housing sector further and to create more space in the city for what they call ‘talent’: the higher incomes.

4) The PvdA has always defended a regulated rental market for lower incomes but on the other hand it has actively supported Amsterdam as a commercial/financial city, attractive for international corporate business and professionals. What do you think of this double approach?

Amsterdam has been a bulwark of the socialdemocrat party ever since the early twentieth century. Their policy has been to obtain a favourable mix between business interests and providing some degree of social services to lower incomes, especially housing. The beginning of social housing provision in Amsterdam was motivated in terms of lowering the price of labour and providing the city’s heavy industry (shipbuilding, for example) with a competitive advantage. Bringing together these two interest groups has been the basis for the party’s electoral appeal ever since. Of course, that became more difficult in the post-industrial era, when social amenities provided no clear competitive advantage anymore and attracting the higher educated or creative class became the new target of urban policy. Presently the electoral victory of the liberal party, D66, might announce a new urban policy more singularly oriented at business interests, the higher educated and the higher incomes. One could say that the municipal election victory of D66 in 2014 is the ironical crowning achievement of the gentrification policy pursued in the last two decades, which has led to large demographic shifts in the city.