Aedes blames private developers for shrinkage of social housing

Building contracts that used to go to housing associations are now increasingly being awarded to private parties, which means that the supply of social rental housing is slowly but surely shrinking, the association for housing corporations Aedes said in a response to a report from Trouw. Municipalities too often assume that developers of cheap rental homes automatically engage in social housing, according to the association.

After analyzing figures from 2019, Trouw wrote that two thirds of Dutch municipalities do not meet the requirement of 30 percent social rental housing that Minister of Housing and Spatial Planning Hugo de Jonge wants to set. Social rental homes are defined as those with a rent below 760 euros.

According to a spokesperson for Aedes, housing associations do much more than just provide cheap housing, which distinguishes them from private parties such as project developers or construction companies. For example, they strive to ensure that their housing remains affordable in the longer term for tenants with lower incomes.

Other homes can be priced out of the range of social housing after rent increases. If the rent exceeds a certain amount when a new contract is concluded –– the amoung being 763.47 euros in 2022 –– that home no longer counts as social rental home.

"It sometimes happens that municipalities give project developers an order and say that one third must consist of cheap homes," said the spokesperson. "But a corporation does much more. We ensure that the neighborhood remains liveable and that various urgent target groups are eligible for a home. Where other landlords often ask for a minimum income from tenants, housing associations pay attention to a maximum income."

At the end of last year, Aedes published its own research showing that housing associations still only have a small share in the new construction. Of all new homes built between 2017 and 2020, 16 percent were owned by housing associations.

The Association of Dutch Municipalities (VNG) says it is positive about the government's intention to assume a standard of two thirds affordability for new construction, as well as the requirement to realize 30 percent social rent. Affordability is defined in three tiers: social rent, medium rent up to 1,000 euros and a purchase of up to National Mortgage Guarantee limit of 355,000 euros.

The VNG believes that the tide must be turned, because due to the landlord levy, new construction has fallen sharply in recent years and social rental homes have been withdrawn from the stock because of rent increases. The municipalities also think that the requirements of two thirds affordable and 30 percent social rent will force the market parties, often owners of the land, to adapt.

Together with Aedes, the ministry and the provinces, the VNG wants to make agreements about more social housing. Of this, 250,000 must be added, as well as 50,000 by the private sector, according to the VNG. "If the landlord levy is abolished from 2023, the housing associations will have investment capacity again," the association said.