Amsterdam misses housing goals again amid rising costs and stagnation
Amsterdam has once again failed to meet its housing construction target, with only 4,541 new homes breaking ground in 2024, far below the annual goal of 7,500. The city government attributes the shortfall to rising interest rates, inflation, and increasing construction and labor costs, which have slowed development projects.
A majority of the newly started projects in 2024 were social rental homes, accounting for 1,887 units. The municipality emphasized its commitment to expanding affordable housing, with nearly all social housing units being developed by housing corporations. "The housing market is under pressure, but we continue to push forward," said Reinier van Dantzig, Amsterdam’s alderman for housing. "Compared to earlier crises and other cities, we are holding up well."
In addition to social housing, the city started construction on 1,006 mid-priced rental units, which range from 879 euros to 1,220 euros per month. This sector continues to lag behind demand, as developers face uncertainty regarding the implementation of the Affordable Rent Act. However, the number of mid-priced rental units has increased compared to 2023, when only 314 such homes were initiated.
Other housing developments included 887 owner-occupied homes, of which only 89 were classified as "affordable" with a maximum price of 390,000 euros. Additionally, 672 private-sector rental homes and 799 temporary housing units were started.
The economic downturn of 2023 had a direct impact on the city’s housing production, with high interest rates and inflation making new projects financially challenging. "The high cost of borrowing, rising material expenses, and increased wages are putting a strain on new developments," said Van Dantzig. He also noted that the availability of municipal land for construction is decreasing, further complicating efforts to meet housing targets.
To mitigate these financial pressures, the municipality allowed developers in 2024 to request revaluations of their land purchases. In cases where the land value had dropped, the city accepted lower payments. This policy applied to 20 projects covering approximately 2,100 homes. However, with land values now rising again, this temporary measure has been discontinued.
In an effort to maintain construction levels, the Amsterdam city government implemented additional measures, including a 10 percent discount on land prices for projects converting existing buildings into affordable housing. "We are doing everything possible to keep housing construction moving forward," Van Dantzig said. "But given the limited space and complexity of current market conditions, it is uncertain whether new measures will be feasible."
Despite the challenges, the city remains committed to its Housing Plan (2022-2028), which aims to construct 7,500 homes per year. However, since the plan’s launch, Amsterdam has averaged only 6,000 new homes annually. The peak came in 2022, when over 8,000 homes were initiated, but numbers declined in the following years. In total, 18,000 homes have entered construction in the past three years.
Municipal leaders argue that while the current figures are below target, they are still better than previous economic downturns. In 2009, during the global financial crisis, Amsterdam saw only 2,300 housing starts. "Given the current conditions, this is still a strong result," Van Dantzig stated.
