Housing policy reforms curb construction and raise rents, economists warn
New affordability rules requiring a high share of low-cost homes are slowing new building and shrinking unit sizes, according to economists.
Recent Dutch housing law obliges each region to allocate two-thirds of all new builds to affordable housing, including 30 % social rentals and a quarter affordable sales. The IPE, commissioned by two ministries, finds that these quotas make construction unattractive for housing corporations, reducing overall output and prompting developers to focus on smaller units in high-demand cities. The policy also widens the rent differential, with social-rental tenants paying substantially less than comparable market renters, while waiting lists remain long.
Economists describe the affordability mandates as an implicit tax on new building, discouraging investment. Although one outlet cabinet has softened some provisions and introduced subsidies and faster permitting, experts argue that the core requirement to reserve two-thirds of new construction as affordable must be dropped in favor of targeting absolute numbers of social homes.
Why it matters
The rules could limit housing supply and raise rents, affecting affordability for many Dutch residents.
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