On 27 March 2009, the Flemish Parliament adopted a decree regarding zoning and housing policy (the “Zoning and Housing Policy Decree”, hereinafter the “Decree”) together with a decree thoroughly amending the Decree of 18 May 1999 on planning and zoning. Both decrees were published in the Belgian State Gazette on 15 May 2009 and will enter into force on 1 September 2009.

With the Zoning and Housing Policy Decree, the Flemish government intends to ‘intervene’ on the housing market. According to the legislative history, many people are no longer able to buy a home. Therefore, it was deemed necessary to ‘facilitate’ government intervention on the housing market.

The decree is divided into seven books. Each book deals with a topic intended to create a coherent housing policy. The most important provisions of the decree are (i) stimulus measures to create ‘affordable housing’ (Book IV) and (ii) measures to encourage ‘living in one’s own area’ (Book V).

With respect to the creation of affordable housing, the Flemish government would like to develop, between 2009 and 2020, 43,000 social housing units for rent and 21,000 social housing units for sale. This quota is mentioned in the Decree and is imposed on Flemish municipalities through a so-called binding social objective, i.e., a description of the social housing units that each municipality must meet within the timeframe of the Special Zoning Plan of Flanders (Ruimtelijk Structuurplan Vlaanderen).

In order to meet this quota, the Decree requires property developers and promoters to build a certain number of social housing units per project. Every developer that develops at least 10 residential houses or, alternatively, 50 apartments is subject to a ‘social housing obligation’ which must be met in order to obtain a building permit for the project. The social housing obligation normally constitutes 20% of the developer’s project, but it can be up to 40%. The housing units so developed must subsequently be transferred at maximum prices to social housing companies.

It should come as no surprise that the Decree has been hotly contested by property developers. They deem that their profits will considerably decrease due to the obligation to create social housing, on the one hand, and that prices will rise for buyers who are not entitled to benefit from social housing, on the other hand, since the cost of the social housing units will be passed on to regular buyers. Moreover, since a considerable portion of each project will consist of mandatory social housing, the housing supply for regular buyers will decrease, which will once again result in a rise in housing prices.

Developers are expected to lodge claims before the Constitutional Court in order to set aside Book IV of the Decree.

Book V of the Decree, which includes measures with respect to ‘living in one’s own area’, mainly targets municipalities with high land and housing prices due to population density (the areas around Brussels and Ghent as well as the coastal municipalities). In these municipalities, newly created residential areas will be reserved for those who can establish a ‘tie’ with the municipality (i.e., at least six years’ residency, working in the area for ½ the week, other subjective ties, as determined by a provincial committee). It goes without saying that these new rules could violate a fundamental freedom of the EC Treaty, namely freedom of movement and establishment.

Thus far, only the Flemish Region has adopted an affordable housing decree. It remains to be seen whether the Brussels-Capital Region and the Walloon Region will follow suit.