Legislation to bring more homes under the Dutch rent control system have been approved by the senate and are set to become law in the Netherlands on July 1.

Government officials say the new rules will result in some 90% of Dutch rental housing falling under some form of rent control although they will only apply to new tenancies.

Landlords and property developers have been campaigning to have the plans put on ice, arguing that the new measures will discourage investors from entering the affordable housing market.

Affordable new homes

In an effort to appease investors, housing minister Hugo de Jonge has agreed that developers who start work on new rental properties from now up to 2028 will be able to charge a premium of 10% on top of the official rise for a period of 20 years. The official annual rent rise will be based on either inflation or average wage increases plus 1%.

Senators also agreed to an assessment of the new legislation within three years.

Points for more amenities

In effect, De Jonge is hiking the current maximum rent in the rent-controlled sector from €879 per month to €1,157 – based on the number of points a property is worth.

At the moment landlords have free choice in deciding the rent of property which is calculated to be worth more than 143 points in the regulatory system. Homes with fewer points are classed as social housing with a maximum price of €879 per month and only open to people on low incomes.

De Jonge’s new maximum will be between 186 points, which means far more properties will fall under rent controls. Points are awarded for amenities such as the number of bedrooms, whether or not the apartment has luxury bathroom fittings, and the age of the property.

The point system is also being overhauled to give more weight to high energy labels, outside space, and the quality of kitchens and bathrooms.

Lower rents for new tenants?

Ministry officials estimate the rent of some 300,000 homes will go down an average of €190 when a new tenant moves in, and that 113,000 additional homes will become rent-controlled.

Currently, 57% of the Dutch housing stock is owner-occupied, 33% is rent-controlled and just 9% is available for people earning more than €40,000 who wish to rent. Housing corporations own the bulk of the rental properties but 1.2 million are in the hands of private investors, many of whom just own a couple of apartments as a pension.

De Jonge’s successor Mona Keijzer, who takes over as housing minister on July 1, opposes the new rent controls but says she will abide by the senate decision.

Some 180,000 new homes have been built in the Netherlands during the past two years, and 800,000 more must be built by 2030, of which 60% will be classed as “affordable”. Many of them will be built at 35 locations nationwide which have been earmarked for development in agreements signed between the minister and local authorities.