13 February 2023
There is a shortage of housing in the Netherlands, and this shortage is growing daily. But there is more to the situation than meets the eye.
In the mid-1990s, housing associations in the Netherlands were privatised. The government wanted to leave housing construction to market forces, and corporations had to become market players. The latter happened successfully, with housing associations becoming property developers.
As profits of these former public bodies increased, the government decided to skim off these surplus profits via the landlord levy. As a result, the corporations ran out of money to build houses and there was a housing deficit. In the meantime, the landlord levy has been repealed, but the damage has been done. Minister De Jonge sounded the alarm last year, announcing the construction of 900,000 new homes. The courts soon put a stop to the ambitious plans, as they were found to violate European nitrogen rules.
As a result of the war in Ukraine, prices of energy and building materials are rising, with construction projects therefore largely being cancelled. The minister devised another plan: To improve access to the rental market, he wants to raise the rent-control ceiling. As a result, the remaining investors in new construction projects are now also pulling out. This is because lower rental income means that they will not be able to complete their plans.
There is also a lot of muddling along at the local level. To protect livability in The Hague, property entrepreneurs were banned from boarding up houses and subdividing large houses into smaller flats. The rack-renters needed to be dealt with! However, the courts also ruled against these plans, finding them to be far too rigorous. Alderman Balster, meanwhile, also recognises that his approach is counter-productive. The subdivision of large houses into smaller flats in The Hague has fallen from one hundred and forty each year to three. Instead of there being more houses, there are actually fewer of them.
In fact, the ‘rack-renters’ referred to are often local entrepreneurs trying to accrue a pension by investing in real estate. They are now looking for other opportunities, because all the government measures have taken the fun out of investing. What have the tenants in The Hague got in return? Deutsche Bank as a landlord. The bank now owns two thousand homes in our city through the vehicle DWS.
While more and more people are relocating to the Netherlands, new housing construction has completely stagnated. All the plans have backfired and we are going around in circles. Circles of powerlessness.
If you have any questions or would you like more information, please contact us directly.
This column ‘Circles’ was written for Den Haag Centraal. Raymond de Mooij writes a monthly column about what he experiences in his practice.
14 February 2024
On 16 May 2023, the legislative proposal for the Fixed Lease Contracts Act (Wet vaste huurcontracten) was passed by the Lower House. The legislative proposal aims to abolish temporary tenancy contracts for residential accommodation, within the meaning of Article 7:271(1) of the Dutch Civil Code (Burgerlijk Wetboek).Read more
31 January 2024
A ‘robot lawyer’ has been made available on the market in America. This is an app with legal information that would make using a lawyer unnecessary. ‘Fight corporations’, ‘find hidden money’, ‘beat bureaucracy’. This is what the robot can and will do. ‘Sue everybody,’ is the urgent advice.Read more
24 January 2024
A building contract exists when one party, the contractor, undertakes to the other party, the client, to deliver work for payment of a sum of money.Read more