Rent freeze endangers tenants' living conditions: Housing corporation authority

The rent freeze endangers the living conditions of people, the Dutch Housing Corporation Authority (Aw) wrote in response to the government’s plan not to increase social housing rents for two years. Tenants with the lowest incomes, in particular, will suffer from this.

If rents can’t increase, housing corporations will have to borrow billions of euros less to invest in new construction, sustainability, and maintenance. “That could mean that the mould problem you are suffering from will not be solved or will be solved later,” said department head Maarten van Heugten. “Or that the housing corporation says about a kitchen or bathroom that is falling apart: you have to make do with that for another three years.”

“This mainly affects the older homes of poor quality, with the lowest rents,” wrote the Aw. These are often home to tenants with the lowest incomes.

Last month, during the Spring Memorandum consultation, the coalition parties decided to freeze social rents. They also agreed to compensate housing corporations with approximately 1 billion euros, but according to the corporations, that is far from enough. The Aw did not assume compensation in its calculations.

Housing Minister Mona Keijzer (BBB) is still working out the coalition plan and promised to take the Aw’s warning into account, she said in a letter to parliament. “I recognize the analysis and share the concerns that emerge from this point of view.”

Approximately one million households will benefit an average of 21 euros per month as a result of the rent freeze, the Aw calculated. For another 670,000 tenants, this is an average of 42 euros per month. For skewed tenants, who earn too much to qualify for their home, this amount is even higher. According to RTL, Keijzer is working on a proposal to increase their rents anyway.

Van Heugten cannot say exactly how many people will suffer from poorer living conditions. "What we know for sure is that with the rent freeze, corporations will not be able to avoid turning the knobs on sustainability and maintenance." Corporations point out that sustainability also saves on heating costs.

At this stage, the rent freeze will only benefit the around 2 million social housing tenants who rent from the housing corporations, and not the around 500,000 people who rent social homes from private landlords.