The Housing Crisis in the Netherlands and The Urgent Need for Social Investment

December 18, 2023

Contributing organisations:

Thie article below written by Sami Beedham of the Dutch Student Union (Landedijke Studentenvakbond) sheds light on the ongoing housing challenges faced by students in the Netherlands and the urgent need for attention.

That there is an issue with housing in the Netherlands is evident. The problem that impacts students is actually an issue with the Dutch housing market in general. At the time of writing, if we are to take student housing in a vacuum, the housing shortage is estimated to be 28,000 dwellings, and is expected to increase to 60,000 dwellings by 2030 despite plans to expand student housing stock. Objectively, there are not enough starter properties and properties for young people. There isn't enough affordable housing in the Netherlands, and the housing left over isn't affordable enough. Properties designated to be student or youth accommodation in reality become a dead end for many faced by high rents and ever more unattainable mortgages. Around a third of Dutch students still reside in the same student accommodation for more than three years after completing their studies.

The scarcity of housing has a threefold impact on student well-being, which is central to ensuring that students are able to make the most of the resources available to them in higher education.

Firstly, lack of housing leads to more competition, increasing the time it takes to acquire accommodation. Competition is not only between students, but the lower and middle sectors of the rental market. During the academic year 22-23 only a quarter of students found accommodation within a month. A majority of 43 percent took between 3 and 6 months to find accommodation, and the unlucky few, some 18 percent, took 6-12 months or more. The problem with this should be evident, most courses begin in September - but it might not be possible to find accommodation until February if you are unfortunate. If you are a Dutch student you may end up living at home for the first part of your study until you can find suitable accommodation. Potential international students are faced with the choice of finding accommodation or giving up on a study entirely.

Of 754,500 higher education students in the Netherlands, 398,900 students live independently and 355,600 live at home. Of those at home, 45 percent state that the reason they live at home is lack of affordability, whilst another 20 percent indicate lack of availability. That's 231,000 students who would prefer to begin personal development away from their parents' home, but are unable to because of the state of the housing market.

Secondly, the Class have identified that one of the most important factors surrounding housing when linked to wellness is the affordability of students' rents. More competition leads to landlords having a position of power within the housing market. In principle, this is not problematic as long as regulation ensures that rental prices are affordable. With the changes to the valuation of student rooms, Dutch policy makers have taken steps to ensure that regulation is possible. This has been met by outrage by investors and landlords who claim that the new regulations make return on investment impossible.  Students will claim that unaffordable rents make living impossible.

Thirdly, and evidently, rent does not pay itself. In principle, students spend 40 hours a week on their education. Kences' national student housing monitor (LMS) indicates that a student earns on average €590 a month from work. This assumes that the average student is able to work at least two days a week alongside their study. The average budget used in the LMS indicates that the average student receives a contribution around €445 a month from their parents, and another €295 is loaned by the average student each month. In reality, it is not feasible for every student to work alongside their study. Nor is it feasible that every parent bankrolls a student for the course of their education. However, the fact is that rent remains. Students in the Netherlands pay for their accommodation through some combination of the student loan, parental contribution and work. A student in the Netherlands can expect to spend between 40 and 50 percent of their monthly budget on their accommodation, depending on where you are in the Netherlands. This is likely a much higher figure, pushing 70 percent or more should you not have help from parents or loans. This is often more if you are a short-term international student, that is, if you can find accommodation at all.

So, how did this happen?
Post-2008 financial crash, the Dutch housing agenda has focused on two things specifically. First of all, owner occupied housing was identified as the ideal housing type. Secondly, financialisation of the Dutch housing market has increased the value of property in the Netherlands. This results in rental housing being particularly undesirable. The development of housing as a strong financial asset has fundamentally changed the motives surrounding development of property. We can look back to the financial crash of 2008 to identify one of the driving motivators behind property development today: Mortgages. In the Netherlands this was intensified by the use of social housing corporations by private individuals for personal profits, which led to the Dutch government limiting the ability of said corporations to compete in an ever more financialising world of housing.

The financialisation of housing markets has created a middleman product to housing - the mortgage - which has intensified all potential supply and demand problems that would otherwise exist at the local level. The Dutch housing market is one of intensifying competition in a world where property is not just a house, a home, a place to live. The multiplicity and complexity of meaning of housing conceptually to governments, financial institutions and thereby investors, is fundamentally different to those who live in those local communities. The recent regulation of the private market is a step that the Dutch government has taken to protect tenants, but more needs to be done for those who have not yet been able to get their foot through the door.

The permeation of housing as a financial asset rather than doesn't only apply to student housing, which by and large relies on a healthy rental market, but applies strongly across the generational channel . It's a story that most born after 1980 will know - the average age at which the Dutch purchase their first property is 39. Relying on market forces who are intrinsically attracted to the acquisition of capital to rectify a situation that is in and of itself caused by addiction to capital is not an attractive prospect. In our world, where house prices across European cities has increased in a manner disconnected from the median living wage, housing access has become all the more limited . This is felt most acutely by those with the lowest incomes - and often that includes higher education students. In the Netherlands many of those students have had to rely on loans to supplement their incomes. Higher rents often require students to loan more. Greater structural usage of loans leads ultimately to a limited future at the level of the individual, where the perennial threat of debt looms.

Without affordable housing, the simple fact of the matter is that Dutch Higher Education becomes less accessible. Fewer individuals from a more limited social strata will be able to access Dutch higher education. This is problematic in the long term as it reduces social mobility and thereby damages the health of Dutch communities. It is crucial that Dutch policy makers continue to ensure that education remains financially accessible, lest generational and class inequalities continue to grow.

It is difficult to suggest a particular policy direction due to the broad range of socio-economic and demographic factors that can limit access to housing. The large scale social housing projects of the 1960s and 1970s are a distant past to students in 2023. That needs to change. Development of social rental properties needs to remain top of the social and political agendas.  Historically, policy makers have turned to large-scale social projects and in my view, wide scale social rental property development that makes use of social capital rather than private investment is likely to be the instrument best suited to taking pressure out of the Dutch market. There is hope, this seems to be on the cards with the National Plan Student Housing (Landelijke Actieplan Studentenhuisvesting, LAS). It remains to be seen whether or not the targets will be met; the housing shortage persists yet. Ultimately, housing as a social investment is twofold - firstly in the infrastructure of the standing stock of social rental properties which enables a smooth flow of demographics through the housing ladder increases social security and social mobility. Secondly, it is an investment in the Higher Education of our students, the value of which is priceless.

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