Impact in the Red Light District
Net Impact Amsterdam partnered with 1012, Inc. to tour social impact investments in Amsterdam’s Red Light District.
1012, Inc., is a cohort of permanent capital from the social housing corporation Stadgenoot, the Gemeente Amsterdam, BPL Pension and Stichting Rabobank Pensioenfonds. They buy and manage real estate in the neighborhood to improve safety, livability, and sustainability.
What is the problem they are trying to solve?
For decades the property in Amsterdam’s Red Light District has been used for prostitution, gambling, and other cash businesses that are often abused for money laundering. Busy streets of drunk tourists and a lack of basic services like grocery stores, pharmacies, quiet cafes, etc., make the neighborhood difficult for locals to live. The project aims to rejuvenate the area to attract more sophisticated businesses and local residents, while generating attractive financial returns for its investors.
How does 1012, Inc. help to solve these challenges?
1012, Inc. seeks to transform the ‘mono culture’ of the area by acquiring, managing, operating and renting out properties. They are socially involved in the neighborhood and work with local people to understand their needs, challenges, and wishes for operating or living in this neighborhood.
After acquisition, many buildings will undergo high-quality renovations or redevelopment, after which then they look for tenants who want to bring value and meaning to the city center. These are, for example, young, local entrepreneurs, as well as residents who want to live there for long periods of time.
The framework within which all this happens is area-specific. In collaboration with the neighborhood director, police, local residents, street managers, business associations, owners’ associations, housing associations, city district and municipality, 1012, Inc. looks at what is needed for the neighborhood through an integrated view. The core values they apply are: decent, decisive, reliable and binding, and they work from a clear customer focused vision.
What we learned
Net Impact Amsterdam members learned that transforming an area is not easy, and that there is no silver bullet. Progress takes patience, perseverance, and a multi-stakeholder approach. Setting clear impact objectives will help to steer management to identify specific tenants and property types that can deliver the intended outcomes. With such a diverse portfolio, impact reporting on an aggregated basis can be incredibly difficult. We are eager to see how 1012, Inc. might address this in the future. A huge ‘thank you’ to Ronald for spending two hours showing us around the neighborhood and allowing us to tour some of the 1012, Inc. portfolio properties.
Written by Andrea Palmer
27 March 2019