Amendment to Housing Act: more owner-occupied housing for own residents

The housing shortage and high home prices are forcing people to look beyond their own street. Not only their own municipality, but also the municipalities...

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The housing shortage and high home prices are forcing people to look beyond their own street. Not only their own municipality, but also the municipalities around them qualify as potential residential locations. So it is common for homes to be bought or rented by people from outside the community. This makes it more difficult for local residents to remain in their own communities. To cope with this, municipalities want both rental and owner-occupied housing in the municipality to be available to local residents as much as possible. For low-cost rental housing, this is already possible. But for owner-occupied homes, this is not yet legal. There are municipalities that make contractual agreements with developers about this. Developers must then first offer the housing to be built by them to local residents. Only then may the homes be offered to interested parties from outside the municipality.

That desire is understandable, but not allowed. When the Housing Act was amended in 2014, the minister reiterated that. The 1993 Housing Act still had opportunities to implement preferential policies regarding housing. Since the 2014 Housing Act, this is no longer the case. The contractual freedom of municipalities is limited with its introduction: municipalities are not allowed to make agreements on the distribution of housing outside the possibilities of the housing ordinance. Because the housing ordinance, with a few exceptions, should only deal with the allocation of rental housing, it is not possible to prescribe that housing for sale must first be offered to own residents. Such arrangements constitute an unacceptable interference with the 2014 Housing Act. This means that agreements with developers on allocation of owner-occupied housing are void. This was recently confirmed once again by the Arnhem-Leeuwarden Court of Appeal, which annulled an agreement between a developer and the municipality of Lansingerland for this reason. [1]

Municipalities nevertheless continue to make agreements with developers to give priority to their own residents for homes for sale. As the above shows, such agreements are not legally enforceable; they rely solely on trust. So they are “gentlemen’s agreements.

A recently announced amendment to the 2014 Housing Act should change this. First and foremost, the amendment allows for a greater proportion of the stock of available rental housing to be allocated to people with local ties.

What is really new is that municipalities are now also given room to impose bonding requirements when developing low-cost owner-occupied housing. These are homes with a purchase price below the NHG limit (in 2022 it will be €355,000.00). The agreements they make with developers in this regard can actually be enforced by the amendment. The change could help prevent people from having to leave their hometown to find housing. Looking beyond one’s own street will then hopefully no longer be necessary.

[1] Arnhem-Leeuwarden Court of Appeal May 10, 2022, ECLI:NL:GHARL:2022:3698.

This article was written by Jelmer Maarsen, legal assistant.

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