Number more important than type in housing construction: CPB

The number of homes built is more important for the position of households in dire straits on the housing market than the exact type of home. The Netherlands Bureau for Economic Policy Analysis (CPB) reported this in a new study into which homes are most suitable to build for people who currently live in homes that are too expensive and do not meet their needs. “The most important thing for households in dire straits is that as many homes as possible are built.”

Discussion often arises about which type of homes should be built, such as small homes or larger homes that ensure more flow in the housing market. The realtors’ organization NVM, among others, previously advocated more focus on building relatively more expensive homes to help the flow so that a “long moving chain” is created.

According to the CPB, the type of homes built is much less important than the number of homes built, although the amount of land available for housing construction is important. If only a small amount of land can be freed up, the planning agency says it is better to build smaller homes.

In this study, the CPB focused on households that already had a home in the owner-occupied or private rental sector. The group of “stuck households” is often people with a middle income who earn too much for social housing but too little to afford housing in the market sector.

Ultimately, housing construction is a political choice, the CPB said. A trade-off must be made between the interests of different groups in the housing market and between the available space for housing construction versus nature, agriculture, and business.

“Policymakers who want to help stuck households can build smaller homes where building land is scarce and make more building land available for larger homes,” according to the researchers. In terms of type of homes, stuck households are best served by a mix of large homes that provide flow and smaller homes that they can move into immediately. “A construction program that focuses entirely on flow is therefore not optimal.”

According to CPB, building with a view on flow must be accompanied by “a policy to create substantially more building land, or only be applied in places where there is less demand for small homes, or where they are more difficult to fit in spatially or financially.” In urban areas, where space is scarce, it makes more sense to build smaller homes.