The Role of the European Union in Dutch Social Housing

Linda Dreier | Patrick Kammerzelt | Philipp Ringswirth | Marlene Samhaber | Julia Staufer

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Click here to read the first part of this series entitled 5 Austrians Define Dutch Social Housing

Click Here to read the second part of this series entitled Dutch Social Housing: A Long Tradition

How the EU intervened in the Dutch social housing program:

We already discussed in Fact 1 that social housing varies considerably between different member states of the European Union. As illustrated on the map below, not all countries have social housing programs. The national level is responsible for such movements – but this did not stop the EU to intervene in the Dutch housing market.

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Until the 1990s and early 2000s, a lot of good came from the social housing sector, e.g. large-scale urban renewals. Social housing did not receive heavy regulations and the industry itself became an extremely powerful lobby. Cracks began to appear around the time of the financial crisis at the end of the 2000s. (CRITES 2015)

What happened?

The Dutch housing associations were involved in several financial scandals. Among the biggest was the case of the SS Rotterdam. A housing association bought the ship for more than 250 million euros (!) as part of an urban renewal project. The problem is that this money could have been invested in the construction of new social housing dwellings. This is only one example of how Dutch housing associations were part of dubious businesses. This was one major factor that led to the first change of the housing law since 1901. Other factors contributing to the housing act of 2015 were the financial crisis in general and the EU. (CRITES 2015)

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How did the EU intervene?

An important issue relating the EU and housing in the Netherlands is ‘State Aid’. State Aid is defined as “using taxpayer resources to provide help to organizations in a way that gives an advantage over others. Some State Aid is illegal under European Union (EU) rules because it distorts competition in a way that is harmful to citizens and companies in the EU” (CRITES 2017). This is why the Dutch Association of Institutional Investors (IVBN) wrote a complaint to the European Comission. They believe that the associations received an unfair advantage. As a response to this, the European Comission declared that social housing associations reveived ‘illegal’ state aid. Thereupon, the EU proposed that the associations’ extra housing stock beyond what is necessary should be sold off. Furthermore, the EU ruled that social housing should mainly be provided for people with lower incomes. (CRITES 2015)

As a consequence of the behavior of the social housing associations and the EU developments, the social housing industry must now focus on the construction of dwellings for socially-disadvantaged people, while being more regulated and taxed. All this led to a change in law: Since July 1st 2015, the new housing act regulates when a social housing company can develop new buildings and under which circumstances they can develop a non-social housing project. This is only the case if there are no other private developers interested. (CRITES 2015)

Author: jcrites

Josh Crites is an American social housing professional with both practical and research experience. He has worked at 3 social housing companies in the USA in roles ranging from policy and operations to process improvement and strategy. Josh is a former Alexander von Humboldt German Chancellor Fellow. During that fellowship, Josh researched and worked with social housing companies in Germany, The Netherlands, Portugal, Scotland, England, Estonia and Spain. He is an avid writer and advocate for the provision of social housing around the world.

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