Share of social housing rentals keeps falling despite gov't plans

Despite the government’s ambitions to increase the share of social housing rentals, that share will fall in the coming years. The downward trend has been going on for ten years, and Housing Minster Hugo de Jonge’s plans will not change that, Trouw reports based on calculations by emeritus professor of the housing market Johan Conijn.

In 2012, 30 percent of homes in the Netherlands fell in the social rental category. Ten years later, that was 27 percent. By the end of 2030, only 25.7 percent of Netherlands homes will be social rentals, with rents up to 808 euros, intended for people with an annual income of 40,000 euros or less.

“I want the national share of social rent to grow,” De Jonge told Trouw last year. He aims to build 250,000 social rental homes up to and including 2030. But according to Conijn, that won’t result in a higher share of social rentals.

First, you must detract the number of social rental homes that will be demolished (87,000) and that housing corporations will sell (63,000) from the 250,000 newly constructed ones. If the construction target is actually achieved, social rentals will grow by 4.6 percent by 2030. But the number of owner-occupied homes and private rentals will grow more than twice as fast. As a result, the social rental sector will shrink in proportion.

And the number of social rentals to be demolished or sold can likely not be reduced much, Conijn said. Many homes are in too poor condition to leave standing, and housing corporations need the money from home sales to pay for new constructions. Over the past five years, this has left only 16 out of every 100 newly built homes on balance. De Jonge wants to increase that to 40 out of every 100, which is already very ambitious, Conijn said. Increasing that further will be very challenging.

Conijn’s calculations assume that the housing corporations will succeed in building exactly 250,000 homes by the end of 2030. But that remains to be seen due to the nitrogen crisis and increased interest rates on the capital market reducing housing corporations’ available capital. Previous calculations by Conijn showed that in the worst-case scenario, housing corporations will only be able to build 8 percent of their new construction plans from 2024 without getting into financial trouble.