Supreme Court ruling delaying housing construction

A Supreme Court ruling early this month, banning municipalities from selling land directly to developers without giving other parties an equal opportunity, is already causing delays in housing construction. Cities are in the dark about the ruling's consequences for recently closed transactions or those about to close. And that is causing delays, developers said to BNR.

"The fear is that agreements that you are about to make, or have made, turn out to be incorrect, and you have to reverse them," lawyer Arjen de Snoo of DLA Piper said to the broadcaster. "The investments you've made come under pressure or are worthless. It takes a lot of time to make new agreements."

"The delays are largely due to municipalities," said Jan Fokkema, director of project developers' association Neprom. "They are wondering what the consequences will be for all the transactions that they have closed in the past but have not yet completed or are about to close." So they are reexamining all recent transactions to make sure the Supreme Court conditions are met. "As a result, projects are delayed."

According to Coen van Rooyen of the Dutch housing construction association WoningbouwersNL, the ruling has disastrous consequences for housing construction. "To build one million homes in the next ten years, all signals must be green. One of those signals is now set to deep dark red." 

Construction sector organization Bouwend Nederland pointed out that this problem comes on top of the shortage of construction sites and the nitrogen crisis. "It is an extra obstacle that home seekers bear the brunt of."

The association of Dutch municipalities told BNR that the ruling "certainly has consequences for governments and market parties" and that municipalities struggle with the uncertainty it creates. "We hope that ongoing negotiations and concluded agreements will not be challenged," VNG said. "Municipalities must do sales processes differently. That takes time."