Opinion: The failed housing policy of VVD and CDA is to blame for the housing crisis, not migrants or environmental regulations

VVD and (former) CDA politicians are using migrants and environmental regulations as scapegoats for the housing crisis, diverting attention from the fact that it has been their own questionable policies which has brought us to where we are now, says Dr Gregory Fuller , assistent professor of International Political Economy at the Faculty of Arts of the University of Groningen.

_{Text: Gregory Fuller}

When it comes to the Dutch housing crisis, the policy focus rarely seems to be on housing. Instead of housing, the VVD and CDA (and ex-CDA politicians) talk about rejecting asylum seekers, limiting the internationalization of higher education, and weakening sustainable construction regulations. In doing so, they address the symptoms of the crisis while ignoring the underlying causes. This makes a certain amount of political sense: by using migrants as scapegoats and blaming environmental regulations for being 'in the way,' these politicians divert attention from the fact that their own failed housing policy of the past twenty years has put us in this situation.

The crisis has two underlying causes: on the demand side, the government relies on financial markets to provide buyers with the funds they need to buy homes. At the same time, the government is very hesitant to subsidize the construction of homes that meet the needs of the local population. In other words, the government is stimulating demand without doing the same for supply.

The persistence of mortgage interest deduction, the jubelton tax break for new buyers, the increased weight given the second income of households in mortgage calculations, the very low property transfer taxes in the Netherlands, and even the National Mortgage Guarantee (NHG) encourage mortgage-lending. Some of these measures are not problematic on their own and could theoretically improve access to the housing market, enabling even someone with very little wealth to buy a home.

However, all these measures drive up prices. Without subsidies or regulations ensuring the construction of affordable homes, the stimulus to demand without matching efforts or supply makes it increasingly difficult for less affluent families to find a house within their price range. And if they do succeed, they often have to incur significant debt. The result: almost nowhere in the world does the average household debt exceed that in the Netherlands.

Moreover, many of the same measures that help people into homes also help wealthy households buy a second or third home for investment purposes. In practice, this means that more and more people either own multiple homes or none at all. A significant number of these buyers are foreign institutional investors treating the Dutch housing market like a stock exchange and displacing local buyers.

As much as the government has always stimulated the demand for housing, it has been reluctant to stimulate the supply. Instead of directly financing the construction of new homes, successive governments have focused on eliminating perceived regulatory barriers for market-driven construction projects. Minister Hugo de Jonge's announced plan to build 900,000 new homes by 2030 has already stalled—not because of migrants or environmental regulations but because market conditions have worsened, and construction costs have risen.

In the past, De Jonge's plans would have been supported by a full-fledged ministry, the Ministry of Housing, Spatial Planning, and the Environment (VROM). Such a ministry would be ready to alleviate the effects of rising construction costs and ensure that the built houses are genuinely available to local communities. However, in 2010, the VVD, in the proud words of then-Minister Stef Blok, 'made the entire ministry disappear.' The return of De Jonge as a minister without portfolio for housing can be seen as a tacit acknowledgment that this abdication of responsibility was a mistake.

In short, the key features of the national housing crisis—rising prices amid increasing inequality, shortages of affordable homes, and foreign investors infiltrating the Dutch housing market—are the result of decades of dubious VVD- and CDA-led housing policies. Asylum seekers, foreign students, and environmental regulations only serve as distractions from the real culprit.

This article was published on 17 October 2023, in de Volkskrant.