Plans by the new Dutch government aimed at rapidly reducing rental prices in the Netherlands could actually worsen the housing shortage instead of improving it, says a new report from ING. According to the bank, the only way for the country to climb out of the current housing shortage is to build more new homes for home-seekers. 

Building homes is the only way to stop housing shortage, report states

As part of the report, ING examined the new government’s plans to regulate the rental market and implement a national requirement that two-thirds of new homes being built be affordable housing projects. The bank found that these policies would actually discourage new property developments because potential developers and landlords see such projects as less profitable, thus slowing down capacity-building in the housing sector. 

“The shortage of affordable rental housing can best be solved by combating the cause and not the symptoms,” real estate banker Sophie Kraaijeveld said in the ING report. “An acceptable return for investors helps prevent a decline in housing construction and an increase in the housing shortage.” The report concluded that the only way to remediate the housing crisis is simple: build more homes. 

ING suggests the government should support property development projects

Instead of the current plans, ING suggests that the government should focus its policies on encouraging and supporting the property development sector and housing associations to complete building projects as quickly as possible. 

The report also suggested that the government could encourage house-sharing. They argued that this could be achieved by scraping the cut to state pensions and social assistance benefits that come with sharing a home, for example.