Feargus O'Sullivan is a contributing writer to CityLab, covering Europe. His writing focuses on housing, gentrification and social change, infrastructure, urban policy, and national cultures. He has previously contributed to The Guardian, The Times, The Financial Times, and Next City, among other publications.
In an effort to make housing more affordable, the Dutch capital is crafting a law that says anyone who buys a newly built home must live in it themselves.
If you want to buy a new house in Amsterdam, you’ll have to actually live in it.
That’s the message from the Dutch capital as it prepares a new proposal to restrict sales of newly built housing to owner-occupiers, blocking out anyone who wants to buy the properties only to rent them out.
The plan, which is expected to be adopted into law without any great hitch this autumn, remains at proposal stage for now: It’s not yet been clarified, for example, how long an owner would have to occupy their home before being able to rent it out. It is nonetheless part of a clear push in Amsterdam to improve housing options for a group that increasingly struggles to secure affordable housing: the squeezed middle class.
Some of the reasons why this group is facing problems—ones that have a knock-on effect all the way through the housing chain—may sound familiar. The Netherlands has relatively high home-ownership rates, with 67 percent of the Dutch population living in owner-occupied housing as of 2014. Middle-income households that would have formerly expected to buy, however, are increasingly finding themselves priced out of the market, substantially by investors who then place the property on the rental market.
The challenges of investor-dominated rental markets is hardly limited to Amsterdam, and there’s a growing determination across Europe to show a tougher, more heavily regulated approach to large-scale housing investors. Barcelona, for example, is imposing massive fines for landlords who leave properties empty, and Berlin plans to start renationalizing private housing after investors scooped up much of its rental housing in recent decades.
Rental units do, of course, provide somebody with a home, though it’s often on far less secure terms than ownership. As more units have become rental housing, many in Amsterdam’s middle class find they could have purchased a home if the market looked like it did a decade or so ago, but its changes mean they remain stuck renting.
Amsterdam’s proposed laws wouldn’t stop new rental housing from being built—according to the city’s proposal, that housing would simply have to be proposed and approved as rental property in the first place. On its own, the measure isn’t a fix for a malfunctioning housing market, but it should serve to reduce a certain amount of pressure at the upper end of the rental market.
Amsterdam has been working on ways to tackle this issue for a while. In a general plan adopted in 2017, it laid down the guideline that 40 percent of all new homes should be some form of public housing, while a further 40 percent should be for middle-income households, defined as households with an income between €38,000 and €60,000 ($43,000 to $68,000).
This month, the city announced that it plans to go further by placing a cap on the cost of new homes that are built for this middle tier. Maximum prices would be capped between €175,000 and €297,000 ($198,000 and $262,000) depending on size and location. This cap isn’t so low as to make homebuilding unprofitable; the maximum is just below the current average Dutch home price of around €302,000.
These new limits placed on housing may be broadly friendly to both tenants and owner-occupiers, but this group is not getting away without tighter regulation itself. According to reports this winter in the Dutch media, between 10 and 20 percent of Amsterdam’s rent-controlled apartments are illegally sublet at some point, either to permanent tenants or as short-term vacation rentals. There’s apparently little pushback from the housing associations that control these tenancies. The national government wants to clamp down on this abuse by upping the potential fine incurred, from a current (and largely unenforced) €20,000 to up to €83,000 ($94,000), creating a deterrent actually large enough to stop people gaming the system.
Will these measures be enough to help Amsterdam create a stable, sustainable housing market? Almost certainly not, but they could be a step on the way there. They will at the least make sure that existing measures to make the city’s housing more affordable are far more effective.
Considered alongside the housing actions in other European cities, two facts emerge: That the scope of Europe’s urban housing squeeze extends far beyond people on low incomes, and that as more people struggle to find affordable accommodations, cities’ mandate to intervene and regulate the market is likely to grow ever stronger.