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Sadly, there is not one single reason for the housing crisis in the Netherlands, or we could — with effort — fix that problem. There are reasons that have been building since the 1980’s.

In a recent discussion I came up with the following reasons for the housing crisis that each for themselves would not be too bad of a problem, but combined they form this cluster bomb:

• Financial and policies:
  • Mortgage interest deduction which makes owning a house cheaper than renting one.
  • Low interest rates, people who have wealth can easily invest in housing (“buy to let”) and get a fair return on it. The low interest also makes this one of the few high return-low risk investment possibilities.
  • Social housing estates who had many dubious investments in the ’90’s-’00’s, had to be bailed out, and the government imposing a tax on them in the ’08 crisis means they can not really invest in new social housing, but have been selling off their inventory for the last two decades (I live in an ex-social-housing apartment), a supply that has now dried out.
  • New regulations on house financing (good) which make it so that people new on the housing market can no longer easily afford a house above a certain threshold (NHG-garantie) while the average is now far above that threshold, meaning even more pressure on the renting market.
  • The “Jubelton”, where parents can give their children a tax-free gift of €100.000 for buying a house. This has not made housing more accessible, but instead drove prices up.
  • Social rent gap: The social rent is pegged at about €700, but because there is a huge segment of people who can’t rent social (just too much income or too long a waiting list), and can’t buy (not eligible for mortgage because no wealth and too few income with current insane housing prices) there is a huge pressure on the underside of the “liberal housing market”, meaning there are basically no houses for rent between €700 and say €1100 (depending on the location).
  • “Wet Doorstroming Huurmarkt”, a law that increased the options for temporary rent contracts, hoping to improve the flow of renters to a more suitable house, but only having the effect of increasing rent, making investors richer and leaving renters unable to either live a stable live or build up any personal wealth.
  • Too much money and lending capacity available to both investors and genuine buyers (who want to live in their home).
  • House buying tax (Overdrachtsbelasting) went from 6% to 8% for investors and 2% for first-time-buyers under 35 last year (2020). Which meant a rush on houses from investors wanting to have the last cheap houses last year, then a rush on houses from first-time-buyers now (2021).
• Social:
  • Race to the top, fear of missing out on a house so people overbid enormously for fear of not getting something else
  • A decade-long underconstruction of new housing, combined with a near-total stop of housing construction in the ’08-’10 financial crisis, which meant many (good) construction labour either retired or found other jobs, so there is still an immense shortage in skilled workforce.
  • Covid-19 which increased demands on houses with more space (inside and gardens), instead of the inner-city-studios of the “millennials”. These inside studios are still coveted (by investors) so still priced high, freeing them up don’t free up affordable space to renters.
• Environmental
  • The nitrogen crisis is fairly recent and has not really added up to the housing crisis, but it won’t help either.
  • Pressure on greenfield building by competition from nature preservation, energy production (solar), industry (distribution parks) and agriculture