Municipalities often want new homes for sale to be offered to “own” residents first. They sometimes impose this on developers as a requirement. These agreements are not permitted and may be annulled [1] . An amendment to the 2014 Housing Act should make it possible to regulate the owner-occupied market though. The proposal also provides more leeway to allocate rental housing to home seekers with local ties. We informed you about this earlier.
The bill lacks a problem analysis
Meanwhile, the Council of State has made public its opinion on the bill. The State Council points out that the housing market is complex and requires proper problem analysis. That analysis is lacking. The Council of State further points out that a recent evaluation of the Housing Act calls attention precisely to the importance of freedom of establishment. The Housing Act seeks to protect that interest. The bill actually puts further pressure on that objective. Therefore, the State Council recommends that the necessity, appropriateness and proportionality of further expansion be better substantiated. Moreover, the explanation for the proposed amendment lacks adequate consideration of interests. There is little to no information in the explanatory statement about groups adversely affected by the change in the law, such as housing seekers without local ties and persons who are not among the designated priority occupational groups. Moreover, low- and middle-income households may suffer inequitable consequences from scarcity in the housing market, which will only be exacerbated by the expansion of priority rules.
Affordable homes for sale
The State Council also comments on the bonding requirements for low-cost owner-occupied housing has. This new measure sharply interferes with property rights: homeowners can no longer just sell the property to whomever they want. Restricting the ability to sell may affect the sales market and even have a price driving effect: if homes below a certain price limit can only be sold with a housing permit, unlicensed house seekers will be induced to outbid above the price limit.
Although at first glance the change in the law seems like a welcome gift for municipalities that want to build for “their own” residents, the bill has downsides. The Council of State’s criticism makes it clear that the bill appears to be symptomatic, not curing the ailment in the long run and perhaps even worsening it.
[1] Arnhem-Leeuwarden Court of Appeal May 10, 2022, ECLI:NL:GHARL:2022:3698.
This contribution was written by Jelmer Maarsen, legal assistant.
