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This paper aims to present a model that analyses the value gap, the difference between vacant possession value and tenanted investment value, for the houses of Dutch housing associations. The paper also aims to explore why the value gap is a structural phenomenon in The Netherlands and why it is an important factor contributing to the malfunctioning of the housing market. This gives an interesting expansion of the value gap theory.

By using the well‐known concept of user costs and using market equilibrium as a reference, the model quantifies the influence of six factors that cause the value gap. This is done for The Netherlands in total and for each of the 452 housing associations separately.

The value gap between the owner‐occupied and the rental sector is immense. This is especially the case with the rented houses owned by the housing associations, constituting one‐third of the total housing stock. The vacant possession value of these houses is on average €151,000; the reported tenanted investment value is no more than €33,000. Important factors that are responsible for this gap are, on the one hand, the fiscal subsidies in the owner‐occupied sector and, on the other hand, rent control and the policy of the housing associations characterised by a low rent level and high maintenance and management costs.

This is the first paper that analyses and quantifies the factors contributing to the value lost by Dutch housing associations' operations.

This paper aims to provide a systematic connection between the special institutional environment of the Dutch social housing sector, public tasks for the social housing sector, the organisational goals of housing associations, and their procurement strategy for technical management services.

Based on expert interviews, expert meetings and a literature review, a conceptual model is created that helps focusing the procurement of technical management services.

For social enterprises such as housing associations, just as all for‐profit enterprises, the determination of strategic organisational directions is essential for success. The literature review revealed few possible strategic focal points for housing associations: financial performances and social performances. The procurement of technical management can contribute shaping these performances. Making the right choices in the supplier selection, based on the strategic focal direction of housing associations, enables housing associations to improve organisational effectiveness.

The research is directed towards the organisational goals of housing associations, while the procurement strategy of housing associations should also be based on the characteristics of the different items that are procured. Further detailed research is needed to decide on appropriate procurement strategies for different products and services purchased by housing associations.

Procurement strategy and in particular supplier selection and specification choices can be adapted to the specific situation of social enterprises, such as housing associations, and be connected to the strategic directions of the individual organisation.

This paper aims at narrowing this knowledge gap, for academics, purchasers and housing associations' general managers.