Why affordable housing isn't working in the Netherlands, and what we can learn from Spain

Affordable housing: is it possible? The Dutch housing market is the talk of the town. Or rather, the Dutch housing crisis. And for some people it's becoming more and more hopeless. Because who wants to live at home until they're 30? Or keep living with your ex, while you're at each other's throats, because you can't find a new house? People are living on holiday parks and in caravans. Where do we go from here? But don't we, as Dutch people and as a government, want everything? A home that's affordable, big enough and sustainable. But if we're honest, our wishes are drifting further and further away from reality. While we're busy debating Box 3, inner-city building and strict building requirements here, in Spain new apartments are selling like hot churros. Why does it work there and not here? Well, get comfortable.

Contents

• The Spanish reality vs. Dutch dreams
• Spain (Costa Blanca) vs. the Netherlands:
• A bomb under the housing market: Box 3 and the Woontop
• Why the housing market really doesn't work
• Is inner-city building the solution? Nope.
• The solutions: back to realism
• Wake up: the Netherlands isn't Spain, but…

The Spanish reality vs. Dutch dreams

In Spain there's building going on everywhere. Even in Denia, 20 minutes outside the town, where there are hardly any amenities yet, prices for a two-bedroom apartment start from €360,000. Building costs are lower, land costs are considerably lower, the requirements imposed on construction are lower and the tax burden for investors and developers is friendlier. In the Netherlands we actually want the same house for almost the same price, and in the city as well. Reading this, you can't help thinking: ‘That can't be possible, can it?’. And no, the numbers simply don't add up. That's why hardly anything is being built, and certainly nothing affordable. In the Netherlands a house has to meet the highest building requirements, energy standards and luxury amenities. On top of that, our land is incredibly expensive too. You get it: it simply doesn't add up.

Spain (Costa Blanca) vs. the Netherlands:

Because of my health we spend more time in Spain these days. Our little house here is dirt cheap. Here there's a real distinction between new builds and second-hand houses. Existing homes are really seen as lower quality here. We've looked closely into the housing market here. How come houses are shooting up out of the ground here?

• In Moraira you pay €4,053 per m². This is, so to speak, the Utrecht Oost of the Costa Blanca.
• In Benissa and Jávea/Xàbia prices are between €3,200 and €3,500 per m². That's the Vogelenbuurt, Lombok and Oog in Al 😉

In Utrecht the average price is €6,487 per m². If you divide the affordability limit of €390,000 by this, you end up with 60 m². That's too small for a family. What's more, we Dutch all want a house with its own plot of land for our family, with 3 bedrooms, an attic and a garden. If you do the maths, you can already see that it doesn't add up. The average home in Utrecht costs €442,000. In December the average floor area of the homes sold was 68 m².

Meanwhile in the Netherlands: everything is more expensive. Land prices, building costs, taxes. And then we pile a long list of requirements on top. No wonder building projects grind to a halt and affordable housing is becoming a utopia.

A bomb under the housing market: Box 3 and the Woontop

Affordable housing is so far away

And then there was the Woontop (the national housing summit). On 11 December 2024 central government, local authorities, housing associations and market parties made concrete agreements to speed up the construction of new homes to 100,000 a year. Two thirds of all new homes must be affordable.

Hooray! But less than two days later the cabinet came up with the brilliant idea of raising the notional return in Box 3 to 7.66%. The result? Private landlords, who play a crucial role in the middle segment, can no longer make the numbers work and are threatening to sell their homes en masse. The wave of sell-offs will become even more intense. There won't be a single rental home left.

The harsh reality:

• The rental supply is shrinking.
• Rents are rising further.
• First-time buyers and middle incomes are squeezed even more.

What do we see? The investors, invariably called rogue landlords by the media and the government, are selling their houses. They've had enough. It was their pension provision, but they don't want to have to pay extra into their investment every month or every year. Then it's no longer an investment, but a money pit. Vastgoed Belang calls it “disastrous,” and they're right. Because let's be honest: if you discourage people from investing in rental homes, you can forget about those 10,000 new rental homes.

Why the housing market really doesn't work

But the problems go deeper. Michael Hesp has already pointed it out: there's a structural mismatch between what we build and what we need. Why?

1. We don't build for need, but for demand Young families and first-time buyers are crying out for family homes, while older people stay stuck in houses that are too big for them. Why? There's simply no attractive housing on offer for seniors. As a result, the market is locked.
2. Regulation is stifling Tax rules and rent regulation do more harm than good. Scheefwoners (tenants whose income has outgrown their social rent home) stay put, movement through the market stalls and first-time buyers are left empty-handed.

The puzzle is clear: we build too little, the requirements are too high and building is too expensive. On top of that, the costs are out of proportion to the returns, and that means nobody wants to invest any more.

Is inner-city building the solution? Nope.

Here's the thing: inner-city building sounds nice, but it's extremely expensive. A few extra apartments on a cramped plot? Adding extra storeys? You can bet you'll pay top price. Amenities have to be adapted, procedures take forever and everything costs a lot more.

The solutions: back to realism

So how do we fix this? Not just by shouting that everything has to be affordable. That's an ideology. It simply doesn't work. That way no homes get added and the problem only becomes more pressing. Time for a realistic approach:

1. Encourage people to move on Build attractive, affordable apartments for seniors, with amenities and outdoor space. If they move, large family homes become available for first-time buyers and young families. A simple sum with a big impact.
2. Stop the Box 3 madness Leave private landlords alone. Tax them on the basis of realistic returns and give them room to invest in the middle segment. Because if they drop out, thousands of tenants will fall through the cracks.
3. Build more simply, outside the city Build where you can, without too many frills. No luxury palaces with golden taps, but solid, affordable houses and apartments. First-time buyers can start out perfectly well in a small apartment or studio. Like in Spain: build first, and without crazy requirements; the amenities will follow of their own accord.
4. Lower building and tax costs Make building more attractive for developers and bring down the sky-high costs. Without returns, nothing happens.

Wake up: the Netherlands isn't Spain, but…

We can keep dreaming about affordable, luxurious and perfect housing, but it's time to be realistic. Do we want to get the housing market moving? Then we have to accept that:

• Not everything is possible at once.
• Not everyone can live in the city.
• We sometimes have to lower our demands a little.

Spain is showing us how it's done: they're building everywhere, people are making money from it, and it works. Of course it's no paradise, but the cement mixers are turning. Here in the Netherlands we mainly have fine plans and big ambitions, but reality is lagging behind.

So what are we going to do? Keep building, build smarter, build more realistically. And let's stop treating making money as a dirty word. And stop using the term rogue landlord for every landlord. Because most of them provide a nice rental home, and they even create extra homes. And we desperately need those homes. Those landlords aren't necessarily to be pitied, mind you. I see them enjoying the winter sun here.

On Friday we had a champagne dinner at the Lulu beach club. Of the 130 guests, I think 20 didn't speak Dutch. Most people have moved here in the past two years. They sell everything and head this way. So is everything better in Spain? No, it isn't. But here people don't look down on you if you want to earn something. Investing is simply more fun here in the sunshine, and life is cheaper.

With all these measures, wealthy Dutch people are leaving, and more and more Dutch people and fellow residents are relying on our welfare state. Not a popular opinion, but this is genuinely worrying. Because how big will the problem be in 3 years' time? It really keeps me awake at night. We can keep dreaming about all those plans if nothing changes in our investment climate and the sky-high requirements we impose. Especially on the ‘affordable’ homes. There are plenty of affordable homes. So affordable housing is possible. But there are too many scheefwoners, people living in homes that no longer match their income. I keep thinking back to my economics lessons. Supply and demand, and price elasticity. It's that simple.