Good news for people who cannot find a home in their own area. There is a good chance that, from next year, municipalities will allocate half of the vacant rental homes to people with ‘local ties’. These are people who are already residents of the municipality. For example, young families who want to live more spaciously due to family expansion or seniors who want to move from a detached house to an apartment.
It’s about a amendment of the Housing Act from 2014, which was sent to the House of Representatives by Minister Hugo de Jonge (Public Housing, CDA) on Tuesday. That law already stated that half of the available homes may be allocated to people with economic or social ties. A maximum of 50 percent of this – i.e. 25 percent of the total – was allowed to go to its own residents. With the amendment to the law, municipalities can now decide for themselves how they distribute that 50 percent of the total – so they could all go to their own residents.
The amendment to the law still has to be discussed by the House of Representatives and the Senate. Depending on that, the law will come into effect on January 1 or June 1, 2023. What exactly does the amendment mean? Three questions.
1Why is the minister changing the law?
In a general statement, De Jonge says that starters often cannot find affordable housing in their own village – he explicitly refers to villages in the statement, but the change applies to all municipalities. He believes it is important for the ‘liveability and vitality’ of the region that people who want to move can stay in their own municipality.
The wish on the part of municipalities to be able to allocate more homes to their own residents has been around for some time, is an explanation of the bill. This was also reflected in the figures: an evaluation of the original Housing Act shows that municipalities were already making increasing use of the priority options. In 2016, 55 percent of the municipalities did so, in 2020 it was 74 percent. According to the Housing survey in the Netherlands from 2018 67 percent of home seekers from municipalities that are entitled to the Housing Act would like to move within their own municipality.
The Association of Dutch Municipalities (VNG) is therefore pleased with the proposal for the amendment of the law, and has already insisted on this, a spokesperson said.
2What exactly will change?
More homes may now be allocated to own residents than before. There are three types of ‘bonding’ on the basis of which people can be given priority: local, economic and social. Economic bonding means that someone works in a municipality. Social ties can mean that someone has lived somewhere for years and now wants to return, or that someone is a caregiver in the municipality in question.
In addition to rental homes, municipalities will soon be able to allocate owner-occupied homes up to EUR 355,000 (the NHG limit) in this way.
The amendment to the law could be at the expense of people with only a social or economic bond: if the full 50 percent of available homes go to their own residents, they can no longer be given priority. However, according to the amendment of the law, municipalities are allowed to designate ‘critical professions’, such as a teacher or police officer, so that people from certain professions can still claim priority. Municipalities can decide for themselves which professions are seen as crucial.
In any case, according to real estate analyst at ABN Amro Paul Bisschop, the expanded priority rules will not reduce the housing shortage in municipalities. In fact, he says: it can further increase the scarcity, and thus the prices, for the homes that are not allocated. “If a municipality does indeed allocate more homes to its own residents, the supply for people without local ties who also want to live there will be smaller. Those houses can then become more expensive. So it becomes easier to move within your own municipality, but more difficult to move to another municipality.”
Also read this opinion article: Accelerate housing construction through stronger local government
3How will municipalities implement the amendment to the law?
That remains to be seen. Municipalities lay down the rules for allocating housing in a housing ordinance. A spokesperson for the municipality of Utrecht says that it will look at how that regulation will be adjusted in the coming months, and that it will be coordinated with surrounding municipalities in the region. The same applies to the municipality of Groningen, with the spokesperson adding that he is happy with the amendment of the law because it gives “more control” to the municipality. The municipality of Rotterdam says it is positive about “the possibilities for local customization” that increase with the amendment of the law. The application has yet to be considered.
Although De Jonge speaks about villages in his statement, analyst Bisschop expects that especially larger municipalities will make use of the amendment to the law. “Especially in the Randstad there is the problem that, for example, teachers can no longer live where they work. So I immediately think of those kinds of cities. But in popular villages where there is usually a lot of outbid, the scheme can indeed also offer a solution for residents.”
In those places, the addition of owner-occupied homes below the NHG limit to the Housing Act will also work out to the advantage of local residents: they can then more easily buy a house in their own municipality. For larger cities, however, Bishop expects that addition “will make little difference.” “In a city where local people already have little chance, the average price of owner-occupied homes is far above the NHG limit of 355,000 euros.”