For years, the mantra for the Dutch housing market has been to: build, build, build. Yet, despite a mountain of plans, the housing market remains at a standstill. Housing market economist and Associate Professor Matthijs Korevaar of Erasmus School of Economics discussed this in a detailed interview on BNR Nieuwsradio on 20 March, as part of the election week.
Sale of social housing
A common complaint is that the sale of social housing means fewer affordable homes are available for those who need them most. Nevertheless, Korevaar believes a ban on such sales is too rigid. He refers to his own neighbourhood in Rotterdam, where 92 per cent of homes are social housing. These homes are intended for people below a certain income threshold, resulting in a high concentration of low-income residents in the same neighbourhoods.
According to Korevaar, a better policy would be to build additional social housing in more expensive neighbourhoods, and to sell homes in neighbourhoods consisting almost entirely of social housing. However, this is politically unpopular, partly because land in more expensive neighbourhoods is very costly.
Politicians must make choices
Korevaar finds it difficult to say whether the Netherlands will really make progress on housing after the local elections. After all, a coalition still needs to be formed before plans can be drawn up. He does, however, note that national policy is increasingly focused on deregulation.
Ultimately, he believes housing policy is all about political choices. The government can choose to invest a lot of public money in housing, but that must then be paid for out of tax revenue. As Korevaar puts it: ‘We all say we want affordable housing, but we’re not putting any money into it.’
Korevaar also points out that the people who suffer most from the housing crisis are often the least represented politically. A significant proportion of those affected by the housing shortage are people over the age of 25 who are forced to share accommodation or live in unregistered properties, such as offices or holiday homes. A large proportion of this group consists of migrant workers. It is precisely this group that can usually count on little political support.
Korevaar refers to how things used to be: after the Second World War, there was a strong political commitment to ensuring sufficient housing. This was achieved through the construction of public housing with low rents and by encouraging home ownership, including through tax incentives. Both tenants and buyers were therefore actively supported. In the years that followed, that policy was changed several times. According to Korevaar, this inconsistency has led to instability, which is detrimental if you wish to encourage investment in the housing market.
A positive view of the housing market
Nevertheless, according to Korevaar, the Dutch housing market is not as bad as is often thought. Many people live comfortably and housing costs have, on average, even fallen when measured against income. Thanks to past investments, a large proportion of the population benefits from rent control or relatively low housing costs.
That is beneficial, but at the same time, the funds to support new generations in the same way are simply no longer available. As a result, the housing market feels unfair to many people: they see others benefiting from good deals, but lack the means to take advantage of them themselves.
Advice to (local) politicians
According to Korevaar, the crux of the problem ultimately lies in the political choices that are made. The Hague sets out the broad outlines of housing policy, but it is the local authorities that must put projects into practice. They grant planning permission, set requirements and help determine who is allowed to buy or build where.
At national level, the emphasis now seems to lie primarily on relaxing regulations, rather than on additional investment. According to Korevaar, it is particularly important for local authorities to first form a strong coalition with a councillor who can take the lead. After that, a critical review must be carried out of the regulations that hinder housing construction.
In this regard, he prefers milder but achievable requirements over stricter ones that prove unworkable in practice. His closing message is therefore that more realism is needed in politics: the idea that entering the housing market should be simple, with plenty of choice and low costs, is no longer a given.
- Associate professor
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You can listen to the full interview of BNR Nieuwsradio, 20 March, here. (in Dutch)
