Affordable new-build homes: that sounds like a dream. Especially if you don't have to wait 1.5 years for one. The housing market is overheated. We don't need to tell you that. Overbidding is the norm again. Everywhere we hear build, build, build. But hardly anything is being built. Because of all the regulation, the number of rental homes is falling, rental homes are being sold off and investors are leaving for other countries. What can the government do to keep homes affordable? We've already written a blog about affordability. We've also written a blog about: ‘Why are houses so expensive?’.
Contents
- A revised housing ordinance
- What does that mean?
- Regulating the market
- Fairer and more inclusive
- What happens when you sell?
A revised housing ordinance
In a step towards a more inclusive living environment, the city of Utrecht has announced that from 1 July 2024 a permit will be required to buy affordable new-build homes. This permit will only be granted to buyers with a middle income, as defined by the national guidelines.
The city's revised Huisvestingsverordening (housing ordinance), which comes into force this summer, sets the limit for such an income at €62,191 for single people and €82,921 for multi-person households. As a single person, with this income you can borrow €297,228 for a home. As a multi-person household you can borrow a maximum of €417,773 for a home. This measure is intended to ensure that the affordable homes are actually available to people with a middle income. An average home in Utrecht costs €475,000. The average price per m² in Utrecht is €5,858. If you divide the average transaction price by the average price per m², you end up with 81 m². So a home is much more expensive than the ‘affordable new-build homes’. The NHG limit (the ceiling for the National Mortgage Guarantee) is €435,000. So the affordable homes are cheaper than the NHG limit.
What does that mean?
It means that potential buyers with a middle income get priority when buying affordable new-build homes in Utrecht. In addition, vital professions such as education, healthcare and the police are also included in the priority policy. But that's not all. The municipal executive is also introducing an experiment in which existing priority rules are applied to affordable new-build owner-occupied homes. This means that people from certain professional groups and movers from social or mid-rent housing can also get priority. But is this fair? Who decides that education, healthcare and the police are the most important people for the city? And what position do you then need to have in education, healthcare or the police? Wouldn't you be better off working as a secretary in healthcare for a year, buying a house and then going off to do something you enjoy? Does a residential neighbourhood benefit from so little diversity? I wonder. How big will these homes be? I'm curious.
Alderman Dennis de Vries stresses that these measures are not set in stone. The municipality will keep evaluating and adjusting the housing ordinance regularly to ensure a fair and just distribution of homes.
Regulating the market
These decisions don't come out of the blue. Utrecht's progressive city government had already announced that it would actively intervene in the housing market to achieve a more social public housing policy.
This includes, among other things, increased buy-to-let protection, anti-speculation clauses and an owner-occupancy requirement for affordable new-build homes on municipal land. The city aims to allocate 40% of new builds each year to social rent, with special attention for vulnerable groups.
Fairer and more inclusive
In short, Utrecht is committed to a fairer and more inclusive housing landscape through these new measures. But is this fairer and more inclusive? You'll end up with neighbourhoods full of nurses, police officers and teachers. Police officers earn an average salary, so if they've been in service a bit longer and are in a couple, they already can't get a permit. It does feel a bit contradictory that it's being decided which work is and isn't important, and that we then call that fair. These schemes don't create more homes or more movement through the market either. The emphasis should be on affordability and movement. But will this get that going? I wonder. Shouldn't we be building apartments for older people instead? After all, we live in homes that are too big. Or larger family homes, so that the smaller ones become available. More expensive homes are actually easier to build, and then enough will become available at the bottom end for people to move up.
I fear this sounds very noble. But where does it end? Are we going to allocate owner-occupied homes on the basis of religion, colour, age, gender or sexual orientation? If I want to create an advert for a home on Facebook or Instagram, I'm not allowed to tick specific neighbourhoods, cities, ages or genders. We consider that discrimination. But when allocating an owner-occupied home, it is allowed?
What happens when you sell?
Will this be like the old premiewoningen (subsidised owner-occupied homes)? People with an average income are heavily subsidised by the state, and so by all of us, but afterwards they're allowed to sell for top price. That does feel a bit odd. Although I have to say that middle incomes have been hit hard recently. No entitlement to benefits, subsidies or allowances, so they're left with less each month than someone who doesn't work really hard but does get all the extras. In that respect, I'm all for it. But fairer and more inclusive? No, it doesn't quite sound like that. It sounds nice for show. But the effect is terrible. Out of thousands of applications, a few are the lucky ones: they get to live (almost) below cost price in the highly sought-after city of Utrecht. The rest are even further from home.
