A minister who takes back control of housing
The abolition or a substantial reduction of the landlord levy is not enough
Many political parties are calling in their election manifestos for the abolition or a substantial reduction of the landlord levy. The idea is to give housing corporations the financial scope they need to invest in new homes. But according to PwC specialists Huub Wüst and Jimmy Berns, it is an illusion to think that this will solve the problems. More specifically, they believe that a Housing Minister should take back central control of the construction and planning of new homes.
Serious shortage of affordable housing
The Netherlands is facing a serious shortage of affordable housing. The report "The State of the Housing Market 2020", which Minister Kajsa Ollongren of the Ministry of the Interior sent to the House of Representatives around the middle of last year, states that to meet the rising demand at least 845,000 homes need to be built in the Netherlands by 2030. At that time, there was a shortage of 331,000 homes, representing 4.2 percent of the housing stock. The aim is to reduce this deficit to two per cent in 2035, while the Dutch population is expected to grow to around eighteen million by that time.
Wüst and Berns point out that the problem is not only a shortage of housing, but also a shortage of suitable housing. People with lower and middle incomes are confronted with high rents and high prices for home buying. The demand for suitable one-person homes is expected to rise, partly owing to the aging population.
Not enough to relieve the financial pressure
The Netherlands is not building quickly enough. Following years of financial crisis, the construction industry is struggling with a lack of capacity and restrictive nitrogen and other regulations. The processes for granting permits and issuing land needs to be made faster. Added to that is the fact that the housing corporations, which are tasked with tackling many of the problems, see little scope for investing in new construction. They are faced with the prospect of a major operation to make their housing stock more sustainable and are suffering from the landlord levy that was introduced in 2012 and costs the sector a total of 1.7 billion euros a year.
Jimmy Berns: 'The government has recently taken steps to relieve the pressure on housing corporations, such as introducing tax credits. The Social Housing Guarantee Fund has also increased the financing capacity by adjusting the ratios in the financial assessment framework. This will help to some extent in the short term, but is not enough. What is lacking is an overall vision and approach.’
Balance between investments and a sustainable business model
According to the other PwC specialists, there is more to the problem than money alone. In February, the Dutch Housing Corporation Authority concluded in its 'Statement of the Corporation Sector 2020' that the corporations have to make choices and cooperate more. The chairman of the Authority also commented in the media that supervisory boards are too cautious when it comes to investing in newbuild projects.
Wüst: ‘Directors and supervisory boards have to find a balance between investing heavily in the short term and maintaining a sustainable business model for the long term. This is complex however you look at it, but it is made more so by the many changes in regulations and a lack of political consensus. These are certainly not the conditions under which we can make significant progress.’
Decentralised policy implementation is reaching its limits
If money isn't the only issue, what else needs to be done? Wüst and Berns argue for more central control by the national government. They draw an analogy with the corona crisis: all the parties involved are working very hard and willingly to create an efficient testing and vaccination infrastructure. But central control is not effective enough because of the decentral organisation of healthcare.
In housing policy, it is the municipal authorities that have the most control. 'Decentralised implementation has its advantages, but works against you if the problems become too big,' says Wüst.
Housing corporations are one of the most regulated sectors
Huub Wüst: ‘The paradox is that central government has made housing corporations one of the most regulated sectors. Viewed from that angle, the national government has a great deal of power. But its grip is not tight enough when it comes to where and when which houses should be built in the Netherlands.’
Huub Wüst, sub-Industry Leader Housing
Jimmy Berns, PwC
Jimmy Berns: ‘It would be good for all sorts of parties to have a good look at a map of the Netherlands. Not just housing corporations, but also developers and specialists in the field of energy transition, healthcare, education and the labour market. They determine together what will be needed in the years to come and where. A coalition of 34 organisations in the field of housing, construction, healthcare and welfare recently drew up an action plan to build one million homes over the next ten years. That strikes me as a great initiative.’
Return of a Ministry of Housing
The Ministry of Housing, Spatial Planning and the Environment was abolished in 2012, and since then the Housing portfolio has been placed with various ministries. The three PwC specialists would welcome the return of a Ministry of Housing, with its own minister and budget. This ministry would be concerned not only with the housing corporations, but also the private parties involved in this issue. It would be able to move away from the regional approach to housing policy where necessary.
Huub Wüst: ‘Of course, this always calls for a nuanced, local approach. The problems of Amsterdam are different from those of Wassenaar and those in turn are different from those of East Groningen. It is a good thing that the government now understands the urgency of the problem. That creates a burning platform, which I think is necessary if we are to move ahead.’
‘Directors and supervisory boards have to find a balance between investing heavily in the short term and maintaining a sustainable business model for the long term. This is complex however you look at it, but it is made more so by the many changes in regulations and a lack of political consensus. These are certainly not the conditions under which we can make significant progress.’
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