Robert-Jan Foortse, Head of European Real Estate at APG, is optimistic about the withdrawal of the plan to freeze rents for housing associations. According to him, it opens the door to the realization of new projects.
“Housing associations cannot invest in the construction of new homes if social rent prices are frozen. We work closely with these associations on behalf of our clients in such projects. If they can no longer participate, it becomes much harder to get these projects off the ground. Moreover, if the social housing component in residential projects disappears, we cannot compensate for that. Of course, we could take over a number of social rental homes, but not all of them. The returns are simply too low”, Foortse told the online platform Vastgoedjournaal.
After the fall of the cabinet last Tuesday, Housing Minister Mona Keijzer scrapped the plans to freeze rents in the social housing sector. In Foortse’s view, this is a positive development for parties looking to invest in housing construction in the Netherlands. “Ultimately, this is also good for people searching for a home with affordable rent.”
A major challenge
The Netherlands faces a major challenge. To reduce the housing shortage, 100,000 homes need to be built annually. That target is currently far from being met, despite significant investments from various parties. For example, APG has been tasked by pension fund ABP to invest €5 billion in the development of affordable rental housing in the Netherlands.
To stimulate construction, Foortse sees opportunities beyond just scrapping the rent freeze plan. In an interview on apg.nl, he suggests that lowering the transfer tax from the current 10.4% to a more internationally common rate of 6% would be a good move. “Also, further limiting mortgage interest deduction and aligning it more closely with neighboring countries would be wise. Furthermore, we advocate for attention to the Box 3 tax debate. In addition to (international) institutional investors, private investors are also important players in the Dutch rental housing market. We have also long supported lowering VAT on new construction. That seems like a very direct and effective way to stimulate housing development. It would also help to tackle the accumulation of local rules and procedures. For this, Minister Mona Keijzer has launched the STOER program (Scrapping Contradictory and Unnecessary Requirements and Regulations). That’s a great initiative - it can really make a difference.”