Regional housing problems

Amsterdam Metropolitan Area publications show that the Netherlands needs to build 981.000 homes before 2030, including 170.000 in the Amsterdam area. As a major landlord, how does AHAM view the housing issue?

TvS: ‘It’s clear to us that the demand for rental accommodation has never been higher. We no longer even advertise, because potential tenants approach us. We always have plenty of suitable candidates for every property, but we have fewer and fewer vacant homes available.’

Why is that?

TvS: ‘The increased demand for homes is due to population growth and the changing composition of the population; there are more and more small households. Another major factor is the increased number of jobs in this area, which leads more people to move to the city and increases the demand for accommodation.’
BT: ‘Since October 2020, we’ve no longer had any vacancy between tenants. When one tenant gives notice and hands over the keys, we pass them straight on to the next tenant. It’s been like that for three years now. I’ve never experienced that before.’ TvS: ‘I must add that Betty and her department work extremely efficiently. If all landlords would work this way, there would be far less vacancy everywhere.’

BT: ‘Many properties are unavailable – mostly in the social sector – because they’re being used as pieds-à-terre. People live separately, then decide to move in together, but hold on to both their homes. If even just those properties would become available, that would already make a huge difference.’ TvS: ‘That’s also because of the way social housing is organised in the Netherlands: we subsidise the home rather than the person. Because the value of these homes is not determined by the market. You could suggest giving these homes a value determined by the market, and then increase rental subsidies. That would mean tenants pay more as soon as they are able. Many people currently renting cheap rental properties, could easily afford higher rents. This is the familiar concept of ‘scheefwonen’ (skewed residency). Tenants like this are never going to relocate. This type of accommodation is intended for people on a modest income, but they are never going to get access to them.’

BT: ‘Roughly thirty percent of our portfolio consists of social housing. The problem with this is that in terms of the regulations, all homes with a contract dating from before July 1st 1994, including those with non-controlled rents, are and will remain social housing. We cannot adjust the rent, even though the tenants can afford to pay more. This causes a stagnation in the turnover of tenants.’ TvS: ‘But we have to recognise that the fundamental problem is, of course, a genuine shortage of homes.’

People complain that accommodation is becoming unaffordable, especially in this area.

BT: ‘What many people forget is that living in a city is always expensive. Look around Europe. Accommodation is expensive, both for homeowners and rental tenants. And governments – in our case the local council – want to base the price of land on house prices. As a homeowner or landlord, however, you’re not allowed to charge the corresponding rent.’ TvS: ‘I think it was in 2015 when the then Minister of Public Housing announced that the Netherlands was ‘completed’. Indeed, the ministry was disbanded. As a result, the government responded far too late to the increasing demand for housing. On top of this, low interest rates and an abundance of capital caused house prices to skyrocket. Fortunately, we now have a Minister of Public Housing again. I think it’s quite right that he wantsto introduce measures to help people on mid-level incomes, but these measures have to be appropriate.’ BT: ‘Don’t forget that at some point, housing associations were no longer allowed to develop. They were only allowed to construct rented social housing. At the same time, the “landlord levy” forced these same associations to sell off much of their social housing, leaving them unable to develop social housing either.’

People often say that landlords push rents up.

BT: ‘It’s a misconception that landlords like us determine the market value of rents. In reality, the market does that. This was particularly striking at the beginning of the Covid-19 pandemic, when we suddenly had about forty or fifty properties available and rents immediately dropped.’ TvS: ‘It’s very difficult for landlords to lower
rents for new properties. The council maintains the price of land, requirements for newbuild construction keep increasing and building costs are also rising – not to mention problems that have emerged in logistic supply chains. Add to this the increased cost of energy, and you have an accumulation of expenses that is reflected in the price of newbuild homes. If you compare the price of newbuild homes to our rents, we are currently charging less than ten years ago.’

What is required for an enterprise like
AHAM to continue investing?

BT: ‘Stability and certainty. Knowing what to expect from the government. Plus, a vision for housing. If the government were to say they want to see more housing, they should lower the price of land. But there is currently no clear vision for urban planning. Plus there are new requirements regarding nitrogen emissions.’
TvS: ‘People often point a finger at private entities in the rental market, as if they dominate the housing market. But landlords operating in the non-controlled sector only comprise nine percent of the market.’

And AHAM is still building.

TvS: ‘We have an investment programme worth 500 million euros over the next ten years. We also try to make our voice heard on various levels, both municipal and national, about what we think is going wrong. We give presentations to civil servants and politicians. This isn’t lobbying for our own business interests; rather, we’re trying to clarify what needs to happen, which is build, build, build.’