Corporations concerned about commercial parties that build social rental homes

Aedes, the association of housing associations, is concerned about commercial parties that build social rental housing. They have to comply with fewer rules than housing associations and after a while can raise rents sharply, so that social rental homes are suddenly free sector homes.

According to Aedes, municipalities are increasingly having social rental homes built by commercial project developers instead of corporations. “Social rent is more than a house with a rent of up to 752 euros per month,” says Aedes chairman Martin van Rijn.

Declaration of urgency

Corporations are bound by a number of obligations, such as housing people with an emergency declaration or status holders. Commercial project developers don’t have to. And housing association housing – provided they are not sold or demolished – will remain permanent social rental housing. Private parties can, for example, increase the rent when changing tenants and offer the house in the private sector.

“I also find it worrying that less is being built by housing associations, they play an important role,” says Jan Fokkema of NEPROM, the sector organization of project developers, in a response. “But I think it’s too easy a reproach that they build too little because investors steal it.” According to him, there is a great need for cheap housing, and corporations are unable to build them all.

Smaller and maximum rent

According to Aedes, housing associations usually build larger homes, so that they are attractive to multiple target groups. Private parties often build smaller houses and often rent them out at the maximum rent limit. Fokkema disputes that: “We have a points system for how much rent you can ask for how much quality. Those rules apply to everyone. Investors also rent out social housing below the maximum allowed rent.”

The Association of Dutch Municipalities (VNG) shares Aedes’ concerns: “It is a development that shows that market parties want to realize the social rental homes themselves,” says a spokesperson. “Market parties stipulate that after a period of, for example, fifteen years, these homes can be transferred to the mid-market or the owner-occupied sector.”

No municipal land

According to the VNG, the municipalities are hardly in a position to counter this, because developers often own the land and the municipalities no longer have it. “In that case, temporary affordable homes will be built, but those homes are so small that this does not provide a good, sustainable solution for the housing market. We are very concerned about this.”

According to the VNG, municipalities had to sell a lot of land during the previous crisis due to financial problems. Municipalities also need the commercial parties for this. A spokesperson: “As a result of the landlord levy, corporations are no longer able to build enough.”

Smaller share of housing association homes

The share of social rental housing from corporations in new construction has also fallen, as is also apparent from a survey by the Land Registry that Aedes commissioned. Between 2017 and 2020, 262,000 homes were built in the Netherlands, of which about 42,000 by housing associations. That is about 16 percent, which is a lot lower than the percentage of the total housing stock owned by housing associations: 29 percent. It is also below the target of some municipalities to build between 30 and 40 percent socially in new construction.

According to Aedes, the number of homes in the Netherlands has roughly grown from seven to eight million in the past ten years. The number of social rented homes has remained more or less the same and the share has therefore decreased. “The target group for social rental housing has only increased. The need is great, but the share is shrinking,” says Aedes chairman Martin van Rijn.

The graph below shows who has been commissioned for new construction in which cities:

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