Majority support likely for law to regulate free market rentals, despite criticism

The Tweede Kamer, the lower house of the Dutch parliament, will debate Housing Minister Hugo de Jonge’s Affordable Rent Act on Wednesday. It seems likely that the law to regulate some rentals in the private sector will get majority support, after the PVV - the largest party in parliament - said it tended toward supporting the bill in a debate on Monday.

The bill will extend the points system that already applies to social housing to also include rental properties up to a rent of 1,123 euros and 1,235 euros for new construction. The points system sets the maximum rent for a property based on what it offers in terms of size and insulation, for example. The system should eventually save 300,000 tenants an average of 190 euros per month on rent.

The Affordable Rent Act will mean a revolution in the rental sector and, for that reason, has been quite divisive in the Tweede Kamer. De Jonge wants to implement the law on 1 July 2024.

The CDA and the left-wing parties support the bill to regulate mid-range rents. Rents have risen too much in recent years, the parties argue. Various studies have shown the significant social consequences of this. Young people live with their parents for longer because they can’t find affordable housing. Many young couples put off starting a family, divorced people are forced to keep living together, and tenants run into financial difficulties because their monthly rent eats up over two-thirds of their income.

“Many tenants have stress and financial worries because they cannot pay the rent,” GroenLinks-PvdA parliamentarian Habtamu de Hoop said in parliament on Monday, according to the Volkskrant. “It can’t continue like this.” GroenLinks-PvdA will support the bill but would prefer to go one step further. The party proposed a “drafty house discount” for poorly insulated rentals.

The VVD and BBB are the main opponents of the Affordable Rent Act. They believe that interfering in the private sector will reduce investment in the rental market, resulting in fewer available homes.

Private landlords are selling their rentals because they fear for their revenues. That, combined with fewer housing construction projects getting completed, resulted in the supply of rental properties shrinking by almost 28 percent in the first quarter, according to figures from Pararius. A study by housing market researcher Matthijs Korevaar of Erasmus University also showed that private landlords are selling the homes low-income households can afford. And those rentals are “bought by home seekers with an average higher income.”

“The announcement of this law alone has ensured that rental properties are sold and fewer are built and that will continue,” said VVD MP Peter de Groot. “The law, therefore, does not do what it intends. This will lead to less supply in the long term.”

“We are destroying the rental market,” BBB MP Mona Keijzer said. “Yes, public housing is in the constitution. But if you want to house the public, you will have to have rental houses. All the regulations that are now being adopted make that increasingly difficult.”

The NSC is still on the fence. The PVV is, too, but it is tending towards support after De Jonge made several concessions to keep investors investing in housing construction. “I think we will support the law,” PVV MP Barry Madlener said on Monday. He “hopes and expects” to get the rest of the faction on board, but he worries about that happening if the GroenLinks-PvdA amendment to “further tighten” the regulation is accepted.