New Dutch system will force creation of affordable mid-market rental apartments

The Dutch government will roll out a new system to score apartments in the Netherlands, and determine a maximum price for mid-market rent. Under the new plan, landlords can be subjected to the same fines that those renting out social housing flats face. These fines can reach up to 80,000 euros, said Housing Minister Hugo de Jonge.

The new system will cap the rental price of mid-market rent at approximately 1,100 euros once the plan is implemented. It will only apply to new rental contracts, but should bring the rental prices of 300,000 apartments down by an average of 190 euros per month. It will take effect at the start of 2024 if it passes through Dutch parliament.

Currently, apartments are scored on a point system that accounts for the interior surface area, the area of private exterior spaces and storage spaces, communal areas, tiling in kitchen and bathrooms, and the official assessed value of the home. This year, social housing flats are those with less than 142 points, and they carry a maximum rental price of just over 760 euros per month.

The point system will be extended to cover the mid-market segment, De Jonge said. Those apartments can score up to 187 points. If the plan had been immediately introduced, landlords would be allowed to rent out those properties to tenants at between 760 and 1,000 euros. Once adjusted for inflation, the maximum price will likely be about 1,100 euros.

Fines can be levied on landlords who violate the new limits. Under the current Good Landlordship Law, the penalty starts at about 20,000 euros. Repeat offenders can be fined 70,000 euros, which can rise to 80,000 euros for the most egregious offenders, De Jonge told reporters on Friday.

"The regulation will apply to new rental contracts and as long as there is a shortage on the housing market," the Ministry of the Interior and Kingdom Relations said. "The need for regulation will be evaluated at various times."

Homes that are more energy efficient can receive extra points, while those which have poorer energy labels can have points taken away. This should help guarantee that people in inefficient homes are not forced to pay higher rental prices, while encouraging landlords to make improvements if they want to raise the rent with future tenants. Additionally, the system will be refined so that a large roof terrace qualifies for more points than a small balcony.

“An affordable rental home is less and less self-evident for people with a middle income. Due to the enormous scarcity, the top price is demanded for homes that are really not worth it. Meanwhile teachers, nurses and police officers have to foot the bill," De Jonge said. Middle-income earners have been priced out of the cities, with rent per square meter jumping up by 25 percent in a decade. "By regulating the mid-market rent, I want to better protect them against excesses, so that people pay a fair price for their home.”

The regulation will apply to both new and existing construction. To keep current projects under construction running smoothly, a credit will be given for up to ten years to those developers to cover for expected decreases in projected revenue.