Dutch municipalities actively buying up land

Dutch municipalities are actively purchasing land again, BNR found when analyzing data on the use of preferential rights and transaction data from the Land Registry. According to the broadcaster, municipalities have bought more land than the year before every year since 2019.

Preferential rights obligate land owners to offer land to municipalities first when they wish to sell it. “The use of preferential rights has exploded in recent years,” said Charlotte de Mos of Savills, the real estate advisor who performed the data analysis for BNR.

Since 1990, municipalities have used preferential rights 1,575 times. Nearly three-quarters of these uses occurred in the past five years, covering approximately 13,000 hectares of land.

That does not necessarily mean the municipalities bought all that land. They merely had the first option to purchase. But the fact that municipalities have used this right so much more often in recent years indicates that they want more control over what happens to the land within their borders.

Land Registry data also shows that municipalities are buying more land than ten years ago. Between 2010 and 2018, municipalities purchased up to 40 hectares of land annually. In the subsequent years, this increased to over 100 hectares in 2024. The actual figure is likely much higher. Many municipalities manage their real estate through separate companies. Transactions by those companies are not included in this figure.

For years after the 2008 credit crisis, when municipalities ran into problems after massive declines in the value of their land holdings, they were reluctant to buy large amounts of land. The fact that they are now changing that tune is due to the enormous construction challenge the Netherlands faces, Peter Boelhouwer, a housing market professor at Delft University of Technology, told BNR.

To combat the housing shortage, the government wants to build 100,000 homes per year. “Municipalities can buy the land needed for this at a fair price thanks to preferential rights,” Boelhouwer told the broadcaster.

Project developers sometimes encourage municipalities to use this right. Lower land prices mean lower construction costs, which in turn result in lower home prices and homes selling more easily.