Ten years of ‘Swedish’
On July 25, 2014, the Bourgeois government was founded: a government composed of N-VA, Open VLD and CD&V. The first Flemish government without socialists or greens. That ‘Swedish’ coalition was continued after the 2019 elections under Jan Jambon (N-VA), a combination that, according to left-wing Flanders, guarantees a cold policy.
The standard This week investigates where Flanders stands after ten years of ‘Swedish’ policy.
Today: What have ten years of Swedish housing policy achieved?
“By 2025, 42,000 social rental homes and 6,000 modest homes will be added,” Flemish Minister-President Geert Bourgeois (N-VA) emphasized in his first September statement in 2014. That is still a while away, but with an average of just over 2,000. new social housing per year, that ambition will not be achieved in any case.
And so at the end of 2022, 176,026 families were on the waiting list for social housing. That is the latest available figure. In 2014 there were already 120,000, but that is more than 50,000 fewer than today. The waiting list is getting longer year after year. Housing Minister Matthias Diependaele (N-VA) puts the figure into perspective, because 22,500 prospective tenants receive a rental premium. But they get it precisely because they have been on the waiting list for more than four years. In addition, according to him, another 23,614 families with social housing are on the waiting list for another.
“The waiting lists are an indication for the assessment of social housing policy, but are certainly not the end-all, be-all,” says Sien Winters, coordinator of the Housing Support Center, a collaboration between KULeuven, UAntwerp and VUB. She points out that according to a latest estimate from 2018, around 250,000 families are theoretically eligible for social housing, but that some do not register for it. “Fluctuations in the waiting list can therefore also be the result of the attention that social housing receives in the media or extra efforts that municipalities make to guide people to social housing.”
The waiting list figures show a small decline every few years, but there is a technical explanation for this. The list was purged every two years by calling everyone to ask whether he/she was still a candidate for social housing. Yet the trend is clear: the waiting list is getting longer. “And that is a phenomenon that has been going on for decades, even before the center-right took control of policy,” says Winters. For example, between 2009 and 2014 – the Peeters II government – the waiting list also grew by around 40,000 families.
In the years after the Bourgeois government took office in 2014, the number of people on the waiting list jumped several times. The explanation for this lies partly in the decision of the socialist Minister of Housing from the previous legislature, Freya Van den Bossche (Vooruit), to slightly increase the income limit to qualify for social housing from 2014. This made an additional 17,000 families eligible for social housing. The intention was noble, but it will not make much difference if the supply of social housing cannot follow suit. But also in the years that followed, the waiting list continued to increase by leaps and bounds. These were attributed by then Minister of Housing Liesbeth Homans (N-VA) to the increase in the number of asylum seekers – recognized refugees are entitled to social housing – and the renovation of many social homes. Waiting lists are also becoming longer due to the increase in the number of families.
Budget not spent
But the basic problem remains that the number of social housing cannot meet the demand. “The merit of the past two governments is that they have continued to invest in social housing,” says Winters. “The investment budgets were indexed and adjusted to the increased construction costs.” For example, the Jambon government abolished the housing bonus as a cost-saving measure and only partially compensated for this with lower registration duties (see inset).
“Other countries, such as the Netherlands, have reduced budgets for social housing,” says Winters. “It should be noted that due to historical choices in the Netherlands, about 28 percent of the rental market is social, while in our country this is only 6 percent. Belgium has always been more focused on buying than renting a home.”
However, Minister of Housing Matthias Diependaele (N-VA) has had the greatest difficulty in recent years in getting the planned budget for social housing spent. For example, only 833 new social homes were added in 2022. Between 2015 and 2022, an average of 2,266 new homes were added annually. In the 1970s, when investments in housing construction were at their peak, an average of 6,000 homes were added per year.
Corona and a large mandatory merger operation from 134 to 41 housing companies threw sand in the engine, according to Diependaele. The merger operation should give that construction a boost in the coming year: reculer pour mieux sauter. In 2023, he succeeded again in getting social housing companies to invest 841 million euros. This means the budget exceeds the level of the previous record year of 2015 by 10 million euros.
Another way to shorten the waiting list is to reduce the inflow and increase the outflow. For example, Homans decided in 2016 that new contracts would no longer apply for an indefinite period, but that after nine years it would be evaluated whether the tenant would still fall under the conditions of social housing. Previously, the Socialists had always put on the brakes on that measure.
Give a little, take a little
Current Minister Diependaele has already expressed the ambition to apply this scheme to all contracts. Under his administration, the ‘means test’ was already introduced, whereby not only income, but also assets are taken into account when granting social housing. In addition, candidates who have lived in their own municipality for at least five out of ten years are given priority, tenants are required to register with the VDAB, the language requirement has been increased and working candidate tenants are given priority. Diependaele’s motto is to pay attention to what is right. “These are political choices, but they will not significantly reduce the waiting lists and certainly will not solve the housing problem,” says Winters. Diependaele sees social housing as a temporary measure “to get life in order”. That is why building social housing should not be a goal in itself for him, although he also admits that additional ones are needed.
But building additional social housing remains a long-term job. Winters is convinced that the merger of the social housing companies can lead to more professionalization and provide an extra incentive. At the same time, she points out that it has become much more complex to build such homes. “Twenty years ago it was no problem at all to build a number of social housing units outside the residential area. Today there is much less land available, which means that the projects, often after demolition of old buildings, are much smaller-scale. Moreover, the quality tests in the areas of heritage, land use, water, etc. have only become stricter.” The next government knows what to do.
Abolition of housing bonus dampened real estate prices
With the sixth state reform, Flanders was given authority over a number of tax deductions, such as the housing bonus – the tax discount for those who borrow for a house – on the first home. And despite the brick in the stomach of every Flemish person, the Swedish coalition has dared to abolish that housing bonus, partly to save money. In 2015, the benefit for new homes was already greatly reduced, only to be completely abolished in 2020. “After 2015, we compared the price evolution in Wallonia – where everything remained the same – and Flanders,” says Sven Damen, real estate economist at the University of Antwerp. “That abolition immediately translated into prices in Flanders.” The exercise was not recreated after 2020, “but its abolition has undoubtedly had the same effect.”
To compensate for the abolition of the housing bonus, the Jambon government reduced the registration fees for the purchase of a sole home in two steps from 7 to 3 percent. “A good measure to improve mobility on the real estate market,” says Damen, “if only to live closer to work.”
The median price for an apartment in 2022 was 235,000 euros, according to figures from Statistics Flanders. This means that half of the apartments are more expensive than that amount and the other half are cheaper. In 2014 that was still 168,000 euros. The median price for a terraced house or semi-detached house rose from 200,000 to 285,000 euros in the same period. “Without the abolition of the housing bonus, house prices would have risen even more”, says Damen. (CV)
Wednesday: How did the Swedish coalition do on welfare?
