A housing corporation in Brabant needs €118m if it is to avoid bankruptcy, the housing corporations’ financial watchdog CFV said on Tuesday.
Woningstiching Geertruidenberg (WSG) has been in financial difficulties since 2011 when it invested in projects that proved unprofitable. It built up a huge land bank only to discover much of it did not have planning permission.
Last October, the CFV decided to close down WSG because of its financial problems. The Brabant corporation was told to sell all 4,000 of its homes and its land to other corporations.
The housing corporation also received €21m to keep it going until the sales were complete.
However, current market conditions meant not all the homes were sold. ‘Selling at short notice will lead to irresponsibly high losses for the whole sector,’ the CFV told Nos television.
It has now been decided to give WSG a cash injection of €118m which will be provided by the other housing corporations. Their tenants will also contribute in higher rents.
WSG is the second housing corporation to get into financial difficulties. Last year, Rotterdam-based Vestia, the Netherlands’ biggest housing corporation, declared debts of €2.6bn and scrapped its plans for building new homes and renovating old ones. It needs a €700m rescue plan.
The CFV is now setting up a reorganisation fund and will levy an initial €500m from housing corporations in the autumn.
‘This will not be the last levy,’ CFV director Daphne Braal told Nos. ‘This amount is not enough to save Vestia and WSG. In addition, we cannot exclude the possibility other corporations will need to be reorganised.’
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