Dutch housing crisis exacerbated by staff shortage in construction sector

Fixing the Netherlands’ housing shortage is facing yet another obstacle in the form of staff shortages in the construction sector and rising construction costs, ABN Amro said on Tuesday. The government’s plan to fill gaps with temporary housing is also struggling to get off the ground, the Netherlands’ Environmental Assessment Agency (PBL) said.

The construction sector is facing massive tasks in the coming years, according to ABN Amro. To address the housing shortage, the Netherlands must build over 90,000 new homes per year until 2030. That means a production increase of 25 percent for the construction sector. On top of that comes climate goals - 1.7 million homes must be made more sustainable by 2030. And that does not even consider the maintenance of existing infrastructure and climate adaption to non-residential buildings.

Staff shortages will stand in the way of achieving these goals, the bank predicts. “The number of jobs in construction continued to grise in recent years, but so has the vacancy rate,” the bank said. “Many vacancies are difficult to fill. The demand for expansion requires new recruitment of personnel.”

But the growth in the relevant vocational education programs does not match the growth in demand. “A look at the intake in the courses relevant to the construction industry shows that the high demand has not yet translated into an increase in construction students,” the bank said. And the Dutch construction sector is having increasing trouble recruiting migrant workers from Eastern Europe as the construction sectors in their home countries also need workers.

Rising construction costs are another pressing problem, which the bank expects will hamper construction in the coming months and next year. High energy prices and scarcity of raw materials due to the war in Ukraine pushed construction costs 15 percent higher in the first quarter compared to a year earlier. “The high costs are reason to postpone new construction projects in the hope that the costs will fall again in time.” In April, 28 percent fewer construction permits were issued than a year earlier. “A continuation of the decrease in permits that started at the beginning of the year,” ABN Amro said.

To quickly provide a roof over the heads of urgent home seekers, the Ministry of Home Affairs planned to achieve 15,000 “flexible homes” per year - temporary housing or permanent homes rented out temporarily. But these plans are struggling to get off the ground, PBL said on Tuesday.

According to the planning office, municipalities, builders, and flexible housing project managers face many common obstacles like finding a suitable location, financial uncertainties, and capacity issues at municipalities or housing associations. But the biggest issue is “strong fundamental political and social discussions” stagnating the decision-making process for flexible housing.

The political and social objections are mainly based on “the image of previous flexible housing projects,” the PBL said. “It is therefore of great importance for the development of flexible housing that successful projects are realized because projects that have been set up carelessly can lead to further stigmatization of flexible housing.”