The Dutch government is to spend €1bn over the next 10 years to stimulate the supply of new housing, to reduce the shortage of affordable rental housing and create more options for first time buyers.

The plan was included in the coalition government’s 2022 spending plans, which were published on September 21, and highlights the urgency of the current situation, ministers say.

Details of how the money will be spent have not yet been published and it is likely that the next cabinet will take the lead. The current cabinet is operating in a caretaker capacity while a new coalition is put together following the March general election.

Action

Caretaker home affairs minister Kasja Ollongren said that despite advances made in the past year – such as agreements to develop major residential areas in 14 separate locations nationwide – much still needs to be done to boost the housing supply.

Research is currently underway, for example, into extending the points-based system for calculating maximum rents to cover property outside the current rent-controlled sector, Ollongren told MPs in a briefing.

However, she warned, ‘tough regulation will lead to greater affordability in the short term, but will reduce investors willingness to invest, and therefore impact on the availability of homes in the mid to long term.’

Debate

During two days of debate on the 2022 spending plans, MPs also voted in favour of slashing a further €500m from the extra tax which social housing landlords pay. There is, however, majority support to see the tax scrapped altogether and that too will be an issue for the next cabinet.  

Report

Despite the cash injection for new housing, it may not be enough to get housing development up to speed. In June, a report commissioned by Ollongren said that the next Dutch government will have to invest almost €20bn to facilitate several major housing and infrastructure in the coming years.

Without a significant contribution from the state, new homes may not be built at the rate required and they will be more expensive than planned, the report, by the Rebel research group, said. Several of the projects are located in the Holland Metropole region.

In total, the 14 projects in the study involve building 436,000 new homes around the bigger Dutch cities, of which 210,000 can be completed by 2030 and 70% will be classed as ‘affordable’.

One million homes

In February, an alliance of developers, construction companies, lobby groups, housing corporations and tenants associations said that one million new homes need to be built in the the Netherlands in the next 10 years to meet demand.

The organisations said at the time they hoped their plans will form the backbone of the next government’s strategy on housing.

Lagging supply

So far new building is lagging behind government expectations. Construction industry economic institute EIB says that it expects 63,000 new homes will be completed this year, which is well below the government’s target of 75,000 new build and conversions.

Nevertheless, the number of permits granted each year is going up, and has risen 30% since 2019, when new home construction reached a low point, the EIB said.

Earlier in September, thousands of people took part in a demonstration in Amsterdam, calling for more investment in housing.