The 2017-2021 ‘Confidence in the Future’ [‘Vertrouwen in de toekomst’] coalition agreement prescribes making more affordable rental housing available in the non-subsidised housing sector [vrije sector]. This shows that the coalition has made the affordability and availability of rental housing in the middle segment into one of its top priorities. In order to achieve this, an Internet consultation procedure has been initiated for a proposed amendment to the Dutch Housing Act 2014 [Huisvestingswet 2014] (referred to hereinafter as ‘the Proposal’).

In January of this year, the Cooperation Roundtable [Samenwerkingstafel] (a cooperative effort between various major umbrella organisations, including the State) issued an advisory report entitled ‘Working Together to Ensure Mid-level Rental Housing’ [‘Samen bouwen aan middenhuur’]. Rental housing in the middle segment must be a fundamental part of housing stock if a city wishes to remain heterogeneous and offer housing to all income groups. That is because the middle segment consists of exactly the type of housing that prompts young people to keep living in their city after concluding their studies and that attracts young people to seek housing where they will be working. According to the report, middle-segment rental housing contributes liveliness and a pleasant hustle and bustle to a city’s atmosphere. Given this, it is difficult to understand why there is a scarcity of housing in precisely this segment. According to figures provided by the Ministry of Interior and Kingdom Relations in the 2015 Housing Survey Netherlands [WoonOnderzoek Nederland 2015], the need for affordable housing in the non-subsidised housing sector in the coming years will translate into between 60,000 and 200,000 homes.

In response to the aforementioned report, the Minister emphasised the need for more affordable rental housing in the non-subsidised housing sector. According to the Minister, middle-segment rental homes are a prerequisite for a well-functioning housing market. The municipality plays a central role in this respect, because it bears responsibility for ensuring the availability of suitable housing stock. Municipalities are already authorised to implement housing regulations [huisvestigingsverordening] that designate housing for specific target groups, the Minister emphasised, regardless of whether the homes in question fall above or below the rent-control ceiling [liberalisatiegrens]. This latter fact is also clear from the Explanatory Memorandum [Memorie van Toelichting] to the current Housing Act. What the status is of the municipalities’ application of this option remains uncertain, however. That uncertainty seems to turn primarily on the current ‘inexpensive housing’ criterion.

The explanatory notes to the Proposal indicate that the coalition wishes to eliminate the uncertainty surrounding this criterion. To that end, the ‘inexpensive’ criterion in Sections 2, 4, and 7 of the Housing Act 2014 will be replaced with the ‘scarce’ criterion. The Minister intends this change to clarify the fact that every category of housing where scarcity may arise as a result of the imbalanced and unjustified effects in the housing stock can be designated in housing regulations as being subject to a permit requirement [vergunningplichtig]. This will eliminate the ‘obstacle’ municipalities have been encountering when attempting to apply housing regulations to mid-level housing. However, freedom of establishment will continue to be the premise (as laid down in Article 2 of Protocol No. 2 to the ECHR). In principle, those seeking housing must be able to decide for themselves where they will live. This means that the application of housing regulations must be well substantiated and closely tailored to the relevant category of scarce housing.

The impact of the statutory amendment will be felt primarily by municipalities. By replacing the ‘inexpensive’ criterion with the ‘scarce’ criterion, the statutory amendment will offer municipalities the explicit option of determining the price threshold themselves. As far as delineating the category of rental housing in the middle segment, municipalities can set the lower threshold at the rent-control ceiling (EUR 710.68, 2018 price level). The upper threshold will vary by region. Whether the amendment to the Housing Act 2014 will actually result in the availability of more rental homes in the middle segment remains to be seen. After all, the municipalities will have to take action by including a permit requirement in the housing regulations.

Furthermore, it is only once a permit is applied for/granted that an assessment is made to determine whether the applicant meets the requirements for obtaining the permit. The permit cannot be revoked if the tenant ceases to meet requirements during the term of the lease. The statutory amendment therefore cannot prevent tenants who over the course of time begin earning a higher income from living in housing for which they exceed the income threshold under the housing regulations. Tenancy law [huurrecht] also provides no recourse against such tenants.

In brief, the shortage of middle-segment rental housing has received a great deal of attention from the coalition. That led to the Proposal, which is intended not so much to effect a change as to eliminate the presently existing uncertainty. Responses to the Internet consultation can be submitted until 9 April, inclusive.