Prinsjesdag: 1 billion euros extra one time for faster construction homes

The cabinet earmarked another 1 billion euros for the faster construction of affordable housing. The money is meant to be an extra boost for housing construction, several sources confirm to theCCeit. The extra investment is in the Prinsjesdagpieces, which will be presented by the cabinet next Tuesday.

But while there will be extra money for the approach to housing construction, the cabinet will not present any major plans to address the current housing need. Lifting the landlord levy for housing corporations or further lowering the mortgage interest deduction is politically contentious. The cabinet is demissionary and can‘t take too big steps.

Dirty ground

In 2019, 1 billion euros were already put in a pot called ‘Home Building Impulse‘. This national money is intended to help municipalities achieve affordable housing that are not financially profitable. With the money, for example, a municipality can clean up dirty land, make the district more accessible by building a road or public transport or setting up the public space.

The housing impulse proves to be popular; several housing projects have been launched in recent years in dozens of municipalities. In these projects, 50 percent of government housing needs to be affordable. These include social housing and rental homes of up to 1000 euros or less.

Princess Daypieces

The pot is now empty and is thus replenished with the additional investments for a new variant of this Home Building Impulse. The amount can be spread over a number of years; details are not yet known.

The call for a better approach to the housing crisis is becoming louder. There is a shortage of around 331,000 homes, the prices of buying and renting homes continue to rise, and especially those with low or middle income and starters fail to get those high prices into an affordable home. Last Sunday there were thousands of demonstrators at the Woonprotest in Amsterdam. The activists and many political parties demand additional intervention from the Cabinet.

Illusion

Minister Ollongren for Home Affairs and Kingdom Relations (BZK) acknowledges the problems and stressed again last Tuesday in the House of Representatives that it is a โ€œcomplex problemโ€. โ€œWe should not have the illusion that that problem is easy to solve. It’s gonna be years to come.โ€

One of the causes of the high buy prices is the low interest rate which makes it more attractive for investors and people with money in their savings accounts to invest their financial reserves in homes. That drives up the price, just like the mortgage interest deduction that makes housing purchases more attractive if someone has money for it.

Wary

Minister Ollongren stressed the impatient Chamber that she cannot do anything at low interest rates. The reduction in the mortgage interest rate deduction is also very different by the parties. For example, the VVD is very reluctant to lower this tax advantage on homeowners.

A majority of the House of Representatives also advocates the abolition of the landlord tax, which is an additional tax for housing corporations. This hinders the construction of low-cost housing for the corporations, is the shared opinion. Ollongren, of D66, also thinks the landlord charge is unsustainable in the long run. But its abolition cannot be arranged now, because the biggest party, the VVD, feels nothing about it.