Cabinet intervening in free market to keep rents affordable for middle class

The Cabinet plans to interfere in part of the free market to keep rents affordable for people with a mid-level income, Minister Hugo de Jonge for Housing announced on Thursday. The government will also encourage the construction of more affordable housing. According to De Jonge, middle-class tenants often fall between the cracks, and people with low incomes spend so much on housing costs that they can't get by. That has to change.

"Many people cannot find affordable housing or have too high housing costs. That affects people's livelihoods. That is why more affordable homes must be built in the social housing segment, but also in the middle segment. And that is why we will regulate the middle-class rent," De Jonge said.

Households with an income above 44,000 euros don't qualify for cheaper social housing and have to find a rental in the free market. Due to the housing shortage in the Netherlands, these rentals often go for incredibly high prices. In the Randstad, for example, rents of 1,500 euros or more for a small home are commonplace, according to NOS.

The Cabinet plans to soon implement the valuation system, also known as the points system, used in social housing on part of the free market. This system determines the rent so that a tenant pays a fair price that matches the quality of the home. De Jonge is still working out the details but is looking at applying the valuation system to rents up to 1,250 euros.

But to address the root cause of the high rents, the government must tackle the housing shortage. De Jonge, therefore, plans to build more homes for families with low to mid-level incomes. The Residential Building program aims to build 900,000 homes by 2030. Forty percent of these homes will be affordable owner-occupied or mid-level rental homes, De Jonge announced. According to him, this will also improve the position of first-time buyers.

The government will also simplify the housing allowance so that more people can make use of it. Instead of a rent-dependent allowance, the government will switch to fixed, standardized amounts. People will pay an own contribution based on their income, and what remains is the allowance they'll receive. The maximum rent limit will also be scrapped so that more tenants can receive the housing allowance.

De Jonge plans to have the bill for these changes ready by the end of this year so that it can take effect in 2024. The standardized rents in the housing allowance will be gradually introduced over a period of five years.