Modernization of land policy must accelerate area development and make it financially feasible | News item

News item | 6/19/2023 | 16:19

Minister Hugo de Jonge (Public Housing and Spatial Planning): “In order to build houses, you need feasible plans. We now see too often that those plans cannot be realized financially and that planning takes too long as a result. This is partly due to the high cost of land. The goal is to build affordable two-thirds of the homes to be built. In addition, the business case must remain feasible for project developers and municipalities must be able to recover the costs of necessary public investments – such as the construction of (green) facilities or energy infrastructure. It is therefore high time to modernize land policy now. With proposals for the short and long term, we are regaining control of the land: we are focusing on lowering costs, reducing shortages and improving the process of area development.”

problem analysis

Many municipalities and provinces have become more dependent on other parties for the acquisition of land. Since the credit crisis and the additional crisis in the housing market, municipalities have owned less land, which means that more negotiations with (several) landowners are required. These negotiation processes are often difficult. Due to a lack of capacity, expertise and financial scope, not all the available instruments for conducting an active land policy are always used effectively, which can lead to land becoming available too slowly.

In addition, future and expected developments in the land market often lead directly to increases in land prices, which often results in a so-called unprofitable top. This means that the land value after redevelopment minus the costs of public investment is lower than the land price prior to the redevelopment. Then either the deficit must be closed with tax money, or area development will come to a standstill.

With the National Housing and Building Agenda, the cabinet is doing everything it can to realize 900,000 homes up to and including 2030, two-thirds of which are affordable. Land policy was still unexplored territory. To tackle the problems in area development in the field of land policy, the government is therefore now drawing up a new, integrated implementation agenda. There are three tracks here.

Track I: soil becomes available faster and earlier

In the short term, we will increase the availability of land within the existing legal framework, so that area development is accelerated. For example, by making better use of the so-called pre-emption right or by starting expropriation procedures earlier and parallel to negotiation processes. These measures will strengthen the management of land policy. This requires the correct, supporting legal procedures, sufficient capacity, knowledge and resources.

Track II: costs for construction facilities are better anticipated and covered

The acquisition costs of land must be reduced and the recovery of costs for public investments must become a given again. This can be done by providing more clarity in advance about the expected costs and revenues of area developments and by agreeing fixed, predetermined amounts for investments in public space. We will also make new, joint agreements about appraisals and specifically the way in which the value of land is determined (the so-called contribution value). The consequences of these measures are being carefully explored for all parties involved.

Track III: increase in the value of land is more in favor of public goals

Land value changes are better used to make/keep spatial developments affordable and to reduce public shortages. That is why an exploratory study is being carried out into improving the benefit tax first. The government is also exploring the options for a levy to prevent speculative land trading.