Changing trends in housing: flexiblity and regionalisation within housing policy

How can greater flexibility be introduced to housing policy and the housing market, whereupon both can keep pace with the changing housing requirements of society
housing estate

Background and advice question

Central government’s role on the housing market has changed in recent decades, and with it the function and significance of housing requirement estimates. Housing policy, in the broadest sense of the term, is a recurring topic within the societal debate. The Minister for Housing and the Central Government Sector, Mr Stef Blok, therefore requested the advice of the Council for the Environment and Infrastructure (Rli). The key questions put to the Council were:

‘What is the actual housing requirement in the Netherlands? What role should central government play in enabling all stakeholders to adequately meet the demand for housing?’

In its advisory report, the Council seeks to answer these questions before going on to examine the underlying issues, such as the obstacles that emerge as a result of general societal developments which influence demand for housing and are not compatible with the current structure of the housing market.

Main recommendations

A person’s circumstances can alter many times in the course of a lifetime. A new job, marriage, family, divorce, perhaps special care requirements in later life: all affect our housing requirements and preferences. In its current form, the housing market does not allow adequate opportunity for consumers to meet those requirements. It precludes ready adaptation to the various life changes and stands in the way of housing “mobility”.

The housing market can be subdivided according to region and ownership form. The social housing sector, the free (unregulated) rental sector and the owner-occupied sector are separate entities. The rigid dividing lines between them inhibit mobility. There is a gulf between those who already occupy a property (the “insiders”) and those seeking suitable accommodation (“outsiders”). At the same time, affordability in the rental sector is under strain, and many owner-occupiers find themselves in “negative equity”: the value of their property is less than the outstanding mortgage. At the local level, land allocation policy and high land values discourage newbuild development, and the necessity of reallocating and transforming vacant real estate is urgent.

The Council sets out three paths towards greater flexibility.

  1. Regional differentiation in policy and legislation. There should be a new balance between the national and the regional policy frameworks and guidelines, with greater emphasis on the regional housing market and greater scope for local authorities.
  2. Ownership neutrality. The government should now take the first steps towards ownership-neutral demand-side support. The choice of whether to buy or rent a home should not be influenced by the availability or amount of rent subsidies or mortgage interest tax deductibility. Within the envisaged system, the government will restrict itself to ensuring the affordability, accessibility and basic quality of housing, with an adequate supply to meet everyone’s requirements. Clearly, this will have fiscal consequences. When developing this proposal, the distribution of the financial burden will therefore require specific attention.
  3. Greater flexibility in the use (and future re-use) of both residential and non-residential real estate. This will ensure that buildings are able to “move with the times”, meeting the requirements of society and the market at any given moment. It will also allow consumers to adapt a dwelling or building in keeping with their own requirements.

Publication date

The advisory report “Changing Trends in Housing: flexibility and regionalisation in housing policy” was presented to Mr Stef Blok, Minister for Housing and the Central Government Sector, on 25 June 2015.