Climate-proofing will make living in NL more expensive, widen gap between rich & poor

Living in the Netherlands will become much more expensive in the coming years because homes must be adapted to climate change, the chief economists of ABN Amro, ING, and Rabobank said in a report. Without intervention, especially from the government, the differences between poor and rich people will become even greater. Some homeowners will need help making their homes climate-proof.

Making homes energy efficient is especially expensive. According to Marieke Blom of ING, that will cost around 1 percent of GDP annually until 2050. In 2022, GDP was over 53,000 euros per inhabitant. “Expenditures for poorer energy labels often pay for themselves through the energy bill and a higher home value, but implementing those is quite a challenge, and people dread the hassle. And making a home completely energy neutral is often not profitable.”

The second largest cost item is flooding, drought, and heat adjustments, which cost about 0.2 percent of GDP annually. That is followed by repairing foundations that are sagging or rotting due to drought and subsidence.

However, the banks believe a rich country like the Netherlands can handle these costs. “There is a lot of surplus value in the housing market. Many owners can afford sustainability and also limited climate damage,” said Ester Barendrecht of Rabobank.

The value of a home can drop if the possible consequences of climate change are significant where the home is located. Values can actually increase if homes are built in such a way that they can withstand weather conditions caused by climate change. That difference can lead to a division in society, warned Barendregt of Rabobank. “That is because home seekers with less to spend are more likely to buy a home in a neighborhood where prices are lower, perhaps without realizing that flooding or foundation damage occurs more often. Or because neighborhoods in which homeowners have more money take measures, increasing home values.”

The chief economists also point out that if homeowners do nothing, the next buyers - often young adults - risk getting stuck with the costs of home damage and climate-proofing the home. The economists, therefore, argue for a uniform and mandatory climate label to ensure that home buyers know what they are in for when buying a home. At the same time, it can also pose a danger to existing homeowners, but the banks consider that of secondary importance.

“It may indeed be the case that such a label makes it clear for certain houses that the risk is greater than expected, but that this is reflected in the rice,” said Barendregt. “But that is fair for the future buyer. He then gets value for money.” The banks think the government should make money available for homeowners who need help repairing their property.

Implementing such a climate label would be complicated. “For a climate label at house level, you have to take many different things into account, but it is possible,” Jan Kadijk of the Dutch Green Building Council, an NGO working with 30 parties to develop an approach for mapping out climate risks to buildings, told NOS. “It’s not just about the location, the foundation, and the land on which a house is built. Building characteristics also determine whether there is danger. Do you have a basement? A lot of glass in your facade? How high is your threshold?”

The VEH, the association for homeowners, doesn’t expect a climate label to happen quickly. You would have to fully inspect every home, a spokesperson told the broadcaster. That would take too much time and money.