Demise of the Dutch social housing tradition: impact of budget cuts and political changes

Abstract

At the beginning of the financial crisis in 2008, the Dutch housing associations were in the position to perform a kind of anti-cyclical housing production that could save, at least partially, the total housing production in the Netherlands. In this contribution, we give insight into the way the housing associations managed to fulfil this specific task and more in general if the associations managed to strengthen their position since the economic crisis. After presenting the development and the main characteristics of the Dutch social rented sector, we give an overview of the general economy of the Netherlands since 2008, which suffers from the global credit crunch, followed by the debt crisis and the Euro crisis. Because of the strong international relations and the big size of the Dutch banking sector, the Netherlands appears to be very vulnerable for international financial problems. In the aftermath of the credit crunch, the Dutch government decided to give priority to a sound public budget and announced in 2010 and 2012 huge budget cuts. The rented sector was already faced with drastic reforms and huge budget cuts by the start of the Rutte I Cabinet in 2010. These policies are described and analysed. The increased impopularity of housing associations explains that these social housing providers were extremely hit by additional budget cuts. For the housing associations, the situation is threatening. The Rutte I and Rutte II Cabinets seem not to be aware of the rich tradition of the Dutch social housing sector and want to reduce the size of the social rented sector (now: 31 %) substantially. This contribution argues that there is the danger now that the austerity measures of the current government (Rutte II) will lead to the demise of the Dutch social housing tradition, although the housing associations could be a part of the solution for alleviating the current problems on the housing and construction market.