Moving forward with area development requires breakthroughs in housing market policy

Mismatch between supply and demand
The number of households is projected to increase by 1.1 million by 2050, driven by a rise in smaller households and migration. This represents a 12.6% growth, pushing the total to 9.5 million. Consequently, demand for housing is surging, but the supply is stagnating. Worryingly, the ambitious goals from the December 2024 Dutch housing summit ‘Woontop’ – to deliver 100,000 new homes per year, with a mandate that two-thirds be affordable – are already falling short. In the last ten years, we haven’t managed to build more than 80,000 new homes a year (Figure 1). This is pushing the housing deficit, almost 400,000, even higher. The issue isn’t just a matter of numbers; it is qualitative as well. Migration is leading to a greater diversity of cultures and housing needs. The number of households with people aged 65 and over is also projected to increase by almost 0.9 million (+34.9%) by 2050. These trends are driving a substantial change in housing demand. The existing housing supply fails to meet this demand.

More realistic housing market policy
The political will to take decisive action exists. However, current housing market policy is actually contributing to the housing shortage. Caretaker Minister Keijzer has selected 24 ‘breakthrough locations’. She has also embraced almost all recommendations from the independent STOER advisory group. And election manifestos are packed with ideas to boost housing construction. These range from greater government control to the construction of ten completely new cities. Unfortunately, however, many of these proposals are unrealistic, as housing market experts have also concluded. The reality is stark: housing construction goals are falling behind in the very areas the government earmarked for development. The well-intentioned housing market policy is thus proving counterproductive. This presents a task for the nextng cabinet: establish unambiguous, stable, and realistic housing market policy. A policy that accelerates housing construction, instead of slowing it down.

Together with the market
When it comes to new housing construction in The Netherlands, the focus primarily lies on affordability. However, this focus is usually not in line with local housing preferences and is counterproductive. It makes projects less flexible and less feasible. Housing market policy can be made more efficient by focusing more on mobility and using subsidies more effectively. The new Nota Ruimte (national spatial planning strategy) offers an excellent starting point, paying significant attention to large housing development areas. These are areas where the number of households is growing most rapidly, such as the Randstad and the ring of municipalities around it (Figure 2). At the same time, political preference shifts from inner-city construction to a new period of larger expansion locations. Success hinges on intensive cooperation between the market and the government.

Space for return on investment
Large-scale area developments can only succeed with the expertise and investment power of market parties. Investor capital is, after all, essential for the large-scale construction of new homes. It is critical to accelerate development and actually deliver on the target of 100,000 new homes annually. Or, as the sector association WoningBouwersNL aptly puts it: ‘Create space for return on investment’. Without a viable business case for market parties, the housing construction goals will remain unrealistic for the coming years.

Figure 1: Development of housing stock and number of permitted new-build homes in the Netherlands, 2015-2025. Source: CBS (*estimate for 2025 based on figures for the first four months).

Figure 2: Designated housing development locations in the draft Nota Ruimte, in relation to the projected household growth per municipality (in number of households, 2025-2050). Sources: ABF Research, Government of the Netherlands.

In a forthcoming article, VanWonen will zoom in on regional differences in housing production. Which municipalities have already built a significant number of homes in recent years and issued an above-average number of permits?

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