Quickly creating 100,000 homes is possible if government acts, experts say

The construction of 100,000 homes can start this year if the government takes quick action, according to a report by consultancy firm Capital Value, a leader in the Dutch residential investment market. If the government does nothing, the housing shortage will increase to 450,000 homes in 2027, the firm said, the Telegraaf reports.

The formalities for the construction of 100,000 homes have largely been completed, Capital Value director Marijn Snijders told the newspaper. “Many permits have been issued in the past for projects for which construction has not started. These projects often even have a builder.” According to Snijders, politicians have several options to make sure construction starts on these projects.

First, the government can reverse the increase in transfer tax, which now stands at 10.4 percent. “You can reduce that to 6 percent, the rate that applied for decades until 2020,” he said. He also suggested additional investments in the Start Construction Incentive (Sbi), the fund with which municipalities can contribute to construction projects struggling to get their funding completed. “If the Sbi is increased by 150 million euros, 14,000 additional homes can be built.”

The government needs to take quick action, Snijders stressed. “Builders still have the capacity, and the permits are there. It would be a shame not to do it. Parties should come up with proposals as early as next week. Then they can be included in the spring memorandum,” he told the Telegraaf. The spring memorandum is the government’s spring update to its annual budget.

Nearly half of the 100,000 “buildable” homes fall into the affordable category - social housing and medium-priced, Thijs Konijnendijk, head of research at Capital Value, told the newspaper. “However, in practice, we see that the construction of some of these plans is on pause due to insufficient pre-sales or mismatch when sold to an investor or housing association.”

According to Konijnendijk, investments in new rental homes dropped by almost a third in 2023 compared to the year before. He blames outgoing Housing Minister Hugo de Jonge’s plans to regulate mid-market rents. It’s making investors uncertain whether money in rental housing will be profitable.