The research discusses how financial and social return can be measured in relation to the asset management in Dutch housing associations. The concepts of financial and social return and the indicators that can be used to measure them are theoretically described and assessed, focussing on the management of the housing stock. Furthermore, the current practice on the basis of the results of an explorative survey among nine housing associations is discussed.

The survey shows that practice varies considerably among the investigated associations. As far as the measurement of financial return is concerned, a few associations act in accordance with the theoretical "ideal". Many associations still follow a traditional book-keeping approach, which is not suitable for supporting asset management decisions. As far as social return is concerned, the survey indicates that associations collect a lot of data, but do not really evaluate their performance by comparing their output against preset targets or benchmarks.

Performance measurement plays an important role in the strategic decision-making process and evaluation of organisations. Top-level managers need a limited set of targeted, measurable data to assess their organisation’s performance without detailed involvement at the operational level. Shareholders an stakeholders need data to be able to evaluate the way in which organisations take care for their interests. Performance measurement has its origins in the private sector. More recently, attention has been given to performance measurement in the context of social or public housing management as well, as part of a more general objective to improve public sector effectiveness and efficiency through the introduction of business-like management principles.

Within our explorative survey, nine Dutch housing associations were interviewed about their practice. Together, these associations own almost 200,000 dwellings. The number of associations is too small to be representative for the whole sector, but does provide an indication of current practice. Furthermore, it is expected that the practice of these associations would be ahead rather than behind the general practice among Dutch landlords for the following reasons:

Social return is far more difficult to measure than financial return. Indeed, the concept itself is far more difficult to define. Social return can be related to the activities that landlords perform to fulfil their social objectives: the prevention and cure of market imperfections and undesired outcomes of the market.

The current explorative survey indicates that the associations measure a lot of indicators of the social output of their housing stock. However, a minority of the investigated associations evaluates its output on the basis of preset targets and/or benchmarks. In short, they collect a lot of data but do very little with it. This seems even more disappointing than the findings about financial return. It is particularly disappointing when one compares the results of this research with those of Kromhout and van Grinsven (2004), who made an analysis of the performance agreements between municipalities and housing associations in 2003. Their study indicates that a substantial deal (though by far not all) agreements are formulated in the form of concrete, measurable targets. These agreements are made between the municipality and the housing associations working in that municipality as a group. Seemingly, housing associations fail to translate these agreements into individual targets for their own asset management, which could make one wonder if targets will be met at all.

Delft University of Technology, OTB Research Institute for Housing, Urban and Mobility Studies
Nico Nieboer

02/07/2004

Nico Nieboer and Vincent Gruis

research

Urban Policy > Housing > Housing policy

Collective housing