In the housing development process, negotiations take place between public and private parties about who is going to finance projects that should improve residential quality. In this paper, an analytical framework is developed for understanding these negotiations in different forms which the development process can take. Part of the expenditure on the residential environment is fixed by quality standards. Another part is directly related to the development: the developer pays for the 'on-site' services. Both forms of expenditure can be seen as costs. They influence the development gain remaining. Projects aimed at increasing the residential quality have to be paid out of this remaining gain (i.e. they do not raise the price of the housing). Therefore, the negotiations are about the use of the development gain. For the outcome of these negotiations, three things are of central importance: How much money is available? Who has the money? And who has power to influence the use to which the money is put? This is illustrated by a comparison of the development process in Great Britain and the Netherlands. The value of the framework is demonstrated by applying it to recent changes in the Netherlands.
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