Property developers and investors should start looking at the Netherlands’ housing crisis from the perspective of the people looking for homes, housing minister Hugo de Jonge told visitors to the Provada real estate trade fair earlier this month.
“Everyone knows someone who is unable to find a place to live,” De Jonge said at the opening of the 19th edition of the Amsterdam-based fair, where he met developers and investors and discussed his target to build 900,000 new homes.
The real estate industry has been highly critical of some of the measures the minister has proposed to stimulate the development of more affordable housing, such as setting quotas for different types of property in new developments.

Ambition
The 900,000 figure has not been plucked out of thin air “by an over-ambitious minister” but is based on the real needs of a growing population, De Jonge said.
Despite industry criticism, the decision to extend rent controls and boost the supply of affordable housing will not be abandoned, he said, despite admitting earlier in the month that the sector is going through a dip as new construction slows.
Asked by one delegate if he had to choose between 900,000 new homes and extending rent controls to more properties, De Jonge said: “Not a good question. We have to do both.”

Subsidies
The government is also doing more to help people starting on the housing ladder to buy a home, by introducing starter subsidies and other measures, he said.
In addition, the person looking to buy a home is being disadvantaged by the endless legal procedures before building work starts and this too needs to be tackled, De Jonge said. The minister has already announced plans to slash the number of times locals can take legal action against a development.
“We have to work together,” the minister said. “Government and industry are not on opposite sides… and we are facing a gigantic task.”

The Dutch government has signed agreements with six more of the country’s 12 provinces, outlining where new housing is to be built in the coming years.

Flevoland, Noord-Holland, Utrecht, Noord-Brabant, Limburg and Gelderland have joined the list of regions which have committed to facilitating new residential developments, as part of the government’s target of building 900,000 new homes by 2030.

The deal covering the Amsterdam Metropolitan Area, for example, is for 171,000 new houses and apartments – or almost a fifth of the government’s total ambitions. In Utrecht, the deal is for 83,000 properties spread across the province.

Bottlenecks

The agreements highlight areas where large scale residential construction can be built in return for the government’s commitment to speed up the development process.

‘We are asking the government to fully commit to solving these bottlenecks, where the state has a role,’ said Haarlem housing chief Floor Rodune, who also chairs the MRA housing committee. ‘That be done by rule changes or by providing extra financial resources.’

Housing minister Hugo de Jonge has already pledged to remove the bottlenecks to housing construction such as restrictions relating to nitrogen-based pollution, mobility, the shortage of electricity grid capacity and local objections.

Problems

However, the construction trade economic institute EIB warned earlier in March that eight of the 12 provinces will have to speed up their residential development plans if the government is to meet its target of 100,000 new homes a year.

In particular, Zuid and Noord-Holland, Utrecht and Gelderland need to do more, the EIB said. The five big Holland Metropole cities are located in these four provinces.

By contrast, the more rural provinces actually built more houses than needed to meet government targets. This, the EIB said, maybe due to the pledge to ensure two-thirds of all new homes are classed as affordable – either rent controlled or owner-occupied.

It is more complicated and expensive to build affordable homes in the central urban belt of the Netherlands known as the Randstad, than in rural areas, the agency said.

Elections

The impact of the recent provincial elections on the government’s housing plans remains to be seen. Work has now started on forming 12 new provincial councils, all of which are likely to include new party BBB, which supports high rise developments in urban areas rather than in green belt land. The pro-farmer BBB was the big winner in the March 15 vote.

Dutch housing minister Hugo de Jonge has published draft legislation which gives central government more control over allocating building land and to force local authorities to act if they fail to reach agreements.

The new law also seeks to ensure two-thirds of new housing is classed as affordable – either rent controlled, mid-market rentals (up to around €1,100 per month) or for sale at affordable prices.

The proposal is one of a package of measures aimed at giving central government more say in residential property development, in an effort to ensure that 900,000 new homes are built by 2030, in line with the government’s plans.

‘For too long we thought that local decisions would automatically provide a solution to the housing shortage but that is not the case,’ De Jonge said. ‘That is why we must restore public housing and take back control. This legislation will make sure governments have the right tools to manage how much, where and for whom we build.’

Red tape

De Jonge has already published plans to speed up the construction of new housing, partly by limiting the right of appeal against new developments. It currently takes an average of 10 years from the start of the process to completion but this can be speeded up by removing red tape and combining processes, De Jonge said.

In particular the minister plans to limit the right of appeal against a building project to one legal layer. At the moment, locals who object to the plans can go to court several times in their efforts to stop a development.

De Jonge also says more phases in the development process – from planning, sorting the finances, research, consultation with locals and legal procedures – should take place concurrently. This, the minister said, can cut the development process before construction starts by years.

Fewer permits

Figures show that it is becoming more difficult to sell newly built housing and that the number of building permits handed out by local authorities has also gone down. Last year, permits for 60,000 houses were extended by the end of November, compared with 76,000 in 2021 as a whole.

Insurers have also reported a 20% drop in projects. Construction often only starts with 70% of a project is sold and this is leading to further delays or changes to number and type of home.

‘Based on what we know now, it looks as if we are going to end up with 50,000 to 60,000 new homes this year,’ Gerlof Muntinga, financial director of Woningborg, told the Financieele Dagblad earlier in February.

De Jonge has said he is prepared to consider some form of financial guarantee for construction companies if they start building sooner and has promised to come up with an analysis before the summer, the FD said.  However, any move using taxpayers’ cash will have to be cleared by Brussels to make sure it is not illegal state support.

Meanwhile, De Jonge has said he hopes the new legislation will become law at the beginning of 2024.