Special lease arrangement finances net zero energy in Westvoorne (NL)

Within Westvoorne, located in the south of the Netherlands a whole area is set to transition to net zero energy, resulting in 68 home renovations. Most of the homes belong to Woonbedrijf, one of the last social housing organisations in the Netherlands to be operated by local government. However, there are also some private homes in the mix, and this has been a challenge. The solution: a lease contract for the facade.

First a demonstrator house

Westvoorne Council wants to make its housing more sustainable. As Councillor Van der Meij:says “Sustainability shouldn’t just be about written policy, it should be tangible.” Renovating 68 buildings to net zero energy will set a great example in this area. On 18 September 2017 the Councillor, together with residents, cut an enormous green ribbon tied to the first renovated home to announce its completion. This first demonstrator house will enable residents who aren’t yet to be convinced what their home would look like if they went with a net zero energy refurbishment. The demonstration house can also be used as a ‘resting spot‘ during other renovations. If the renovation process proves too inconvenient for other residents, they can relax, cook or shower in the demonstration home.

Now that the first demonstrator house is complete, it is time to get started on the first block of five houses. This first block will be converted to net zero energy within one month. The residents were enthusiastic from the start, and registered immediately to be the first block renovated.

Quite a puzzle

After the renovation, tenants sign up to an ‘energy plan’ requiring them to make payments to Woonbedrijf which are comparable to their current energy bills. In this way the living expenses for tenants remain similar to what they were before. Woonbedrijf uses the income from the energy plan to finance a large part of the renovation. But Woonbedrijf had also sold homes to tenants under a separate initiative to encourage home ownership*. It was a challenge to resolve the financing for these homeowners. As Rozemeijer says: “We had to put our thinking caps on for this one. Residents wouldn’t or couldn’t participate if they had to invest too much, which is understandable. It was quite a puzzle.”

Leasing the facade

Woonbedrijf, together with their legal team, went looking for a way to finance the €75.000 renovation costs for private homeowners. Eventually a solution was found by creating an ‘independent right to structure’ (‘onafhankelijk recht van opstal’ in Dutch) for a part of the building. This is a legal structure that enables a part of the building to be owned by an third party. “The facade of the home became the property of the Council, Woonbedrijf” Rozenmeijer explained. “The Council ‘leases’ this to the homeowner for approximately the same amount as the ‘energy plan’ that the tenants of the other houses pay.” This finance arrangement is coupled to the building. Therefore, if people sell their house the ‘lease contract’ is passed on to the new owners. This arrangement can also be applied to private houses in the area independent of the housing association, making it a versatile financial tool.

In Completion of the project in 2018

Over the coming months all the residents on the estate will be able to can come and take a look at the demonstrator home. “We are assuming that eventually everyone will become enthusiastic and next year we can get on with renovating the rest of the area,” said Rozenmeijer.

This net zero energy project was partly funded by Transition Zero, a project funded through the EU’s H2020 programme under grant agreement 696186.

* Through this arrangement the housing association sells the house to the tenant at a discount. If they want to sell it again they have to sell it back to the housing association, which is obliged to buy it.