Anyone looking for a rental home knows that finding a home, let alone an affordable one, is an ordeal at best. The supply is small, the prices sky high. There are few signs that this negative spiral for tenants will be broken any time soon.
Reason for the cabinet to intervene. Public housing is once again a core task of the government, Minister Hugo de Jonge (CDA) has been saying since he took office in 2021. Even though he has now resigned, his intention is that the ‘Affordable Rent Act’ will come into effect from 1 July 2024.
The new rental law states that from now on not only will a maximum rental price apply to social housing (which is already the case), but that the rental price in the middle segment will also be restricted. The maximum rent is calculated based on a new points system. The larger, more durable and more valuable the house, the higher the rent may be. Up to 147 points, a maximum rental price of 880 euros applies (social housing). A home that scores between 148 and 186 points may now cost a maximum of 1,123 euros (regulated average rent).
According to De Jonge, the stricter rules will reduce the rent on average by 190 euros per month for approximately 300,000 homes. Municipalities will be given the authority to intervene if landlords charge too much rent. Although there are many supporters of the law, it also provokes a lot of resistance.
The proponents
There is great enthusiasm, especially in the CDA and the left-wing parties, to restrict mid-range rents. As far as these parties are concerned, rents have risen far too quickly in recent years, meaning that many people can no longer afford rental housing. CDA Minister De Jonge speaks of ‘excesses on the rental market’, which means that it is not unusual, especially in large city centres, to pay ‘1,500 euros in rent for a home of 40 square meters’.
The social consequences are significant, as shown by various studies: Young people more often continue to live with their parents because they cannot find independent housing. Young couples are more likely to put off starting a family, and divorced people cannot live apart. There are also tenants who run into major financial problems because their monthly rent eats up more than two-thirds of their income.
“Many tenants have stress and financial worries because they cannot pay the rent,” GroenLinks-PvdA MP Habtamu de Hoop emphasized once again in Parliament last Monday. ‘This cannot go on any longer.’ He previously spoke about ‘usurious rents’ that are maintained if the government does not intervene.
GroenLinks-PvdA is therefore in favor of the new rental law, but would prefer to go one step further. As far as De Hoop is concerned, there will be an ‘extra draft discount’ for poorly insulated rental properties. Residents with energy labels E, F and G could therefore eliminate an additional 221 and 368 from their rent. The House of Representatives will vote on this additional proposal on Thursday.
The opponents
On the other hand, VVD and BBB are completely against the new rental law. They are leading the opposition in Parliament because they believe that the law will lead to less investment in the rental market, resulting in fewer available homes.
Private landlords in particular have already partly sold their real estate, because they fear that their rental homes will soon yield much less money, according to the most recent figures from rental monitor Pararius. There were also fewer new-build homes. In total, the supply of rental properties shrank by almost 28 percent in the first quarter of this year. ‘A real risk’, the Council of State, among others, also warned at the end of last year, ‘is that the bill will lead to the sale of rental properties and fewer new-build rental properties’.
“The announcement of this law alone has ensured that rental properties are sold and fewer are built and that will continue,” VVD MP Peter de Groot noted in Parliament on Monday. ‘So the law does exactly that not what the law intends. This will result in less supply in the long term.’ He calls it ‘repulsive that parties ignore this’.
“We are destroying the rental market,” says BBB MP Mona Keijzer. ‘Yes, public housing is in the constitution. But if you want to house the people, you will have to have rental houses. All the regulations that are now being adopted make that increasingly difficult.’
Critics reject the argument that the social consequences of the sales wave are not too bad because it will soon make more homes available to buyers who until now had nowhere to go. Because the old rental houses will soon be ‘purchased by home seekers with an average higher income’, Matthijs Korevaar, housing market researcher at Erasmus University, recently explained to the daily newspaper. Fidelity and BNR Nieuwsradio.
Tenants with less money are less likely to receive a mortgage to purchase a house and are therefore relatively more likely to be left empty-handed, Korevaar thinks. ‘People with a low income in particular will therefore experience the adverse side effects of the law that should limit excessively high rents.’
The doubters
Both the PVV and NSC have doubts. Like their opponents, they fear that landlords will no longer see any profit in rental due to lower rental income and will sell their properties en masse. This will result in the rental market becoming even tighter.
However, De Jonge has responded to the critics in recent months. Including by increasing the ‘new construction surcharge’. This means that new-build homes that are completed before January 1, 2026 may be rented out for a higher amount for another ten years. Landlords may charge 10 percent on top of the maximum rent of 1,123 euros. The minister hopes that this will not bring new construction to a standstill.
It is one of the reasons that the PVV suddenly expressed support for the law on Monday. “I think we will support the law,” said MP Barry Madlener. However, the PVV still has a few conditions. Madlener ‘hopes and expects’ that he will also get his party on board, but that has not yet been determined. Certainly not if parties such as GroenLinks-PvdA want to ‘further tighten’ the new rental law through all kinds of amendments. “I really fear for the willingness to invest if there are further adjustments,” Madlener said.
NSC’s concern is that ‘the loss of rental properties seems to occur before construction production has picked up steam’, according to MP Merlien Welzijn. ‘It can’t be that during a housing crisis we organize so that we first have fewer homes before we add more?’ NSC therefore wants Minister De Jonge to offer ‘perspective’ to investors who will soon receive a lower return on their properties, including by adjusting the tax system. ‘If you have no perspective, everyone will sell. But with perspective you can say: bite the bullet. I want a kind of calendar: in which year will something be repaired?’
Despite the criticism, a majority in the House of Representatives is now in favor of the Affordable Rent Act. Then Minister De Jonge will have to keep the PVV and NSC on board on Wednesday evening. Voting will take place on Thursday. The Senate will then soon have to consider the law. VVD and BBB, the fierce opponents, have large factions there. So the win is far from certain for De Jonge.
Tags: rental law turns upside precisely great hesitations Parliament
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