Housing associations are not after a financial gain but allocate (consciously if not unconsciously) a part of their available capital in order to achieve a range of social objectives. The real problem is that it is often very difficult to compare these objectives. Do we choose for an extra affordable house or do we spend more on livability? Answering these types of questions remains difficult as long as there is no objective way to compare the objectives.
This article describes a method to compare objectives using pairwise comparisons following Saaty’s Analytic Hierarchy Process (AHP). With the help of the AHP objectives are ordered by importance and a weight-vector is determined. In order to use the AHP, we will have to choose an interval per objective with the minimum prerequisite level and the desired level. By using these intervals, it becomes possible to compare objectives measured in different units.
This method can be used to support the decision-making process at a association level, but also to elaborate on the subobjectives at a district or regional level. Hereby, an optimal balance of allocated capital and the score of the objectives can be achieved at every decision-making level.
*Corresponding author. Ortec Finance BV. Boompjes 40, Rotterdam, The Netherlands. E-mail: David.kronbichler@ortec-finance.com.
The authors would like to thank Vincent Gruis for his comments on a previous version of the paper and Sijbrand Hofstra and Steven Korteland for gathering information.
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David Kronbichler
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David Kronbichler
Managing Director