According to a 2010 study by the Landes Bausparkasse, a house in Germany is, on average, 50% cheaper than one in The Netherlands. On top of that, the building of houses in The Netherlands has been done on a massive scale, creating houses that nobody needs: the wrong types of homes in the wrong places. The surplus of apartments is astounding. However, they are not suitable for elderly people, thus leaving the aging population in the country completely unaddressed. In Dutch cities, there will be a growing demand in the coming years, until 2040, for 700,000 houses. In large parts of our country, the population growth is stagnating, or people are moving away towards the larger cities, a tendency we see in more European countries. So, no matter how you look at it, the mismatch and shortage is frightening.
Municipalities that are depopulating must devalue their property options. The system of municipal finances is still an enormous bubble. As I suggested earlier, if that land is made directly available to private individuals at no cost, and if such a house were to be its own power station, then that would stimulate home ownership, and people would make a conscious decision to go and live in such a depopulating municipality.
There are millions of empty houses in Spain. Most of them are poorly constructed, but they have served their goal: municipalities and real estate developers have filled their deep pockets. Bankrupt banks, financing the whole scheme, had to be saved with European taxpayers’ money. Thank you. So, why don’t we give those empty houses to the Spanish population, most of whom cannot pay their mortgages due to the economic crisis? Or give it to the Spanish youth without a future? With youth unemployment at over 50%, at least some people may benefit from this abundance.
The Dutch rental market has been at a standstill for decades. Large groups of people are living in homes that are too cheap, and are blocking the process of moving up the housing ladder, because buying property is unattainable for them. Banks simply no longer cooperate. Only ten percent of the total three million rental properties in The Netherlands are rented on the free market; the rest is locked up in some “governmental program.” So, lets start a Commons Bank. Or allow credit unions to be formed, just to finance housing again.
New real estate developments need a new approach. Frank Bijdendijk, of the organization Stadsgenoot in the city of Amsterdam, develops housing and office premises according to the Solids concept. It is innovative because the shell of a building is designed, and the inside is not. Liberal regulations ensure that the tenants have flexibility because they are not bound to requirements or a zoning plan. They can do what they want with the premises – turn it into a small company, a home, an office, or a combination of these. You can rent the shell and finish the interior and trimmings yourself. An auctioning system determines the eventual rent price. The canal-side houses and warehouses in Amsterdam inspired Frank. And, because of their flexibility in usage, they are still being used today while the first apartment complexes in the Southeast Amsterdam are being demolished after just thirty years, because they no longer meet the needs of today’s occupants. Solids has reduced the risk factor and lack of occupancy with its new vision. Even though (or because) this development is at odds with prevailing legislation and issuing rules, I believe it is a prime example of building innovation.
Surf to Eatmyhouse.nl, an initiative of the East-Watergraafsmeer quarter of Amsterdam. You will find over fifty magnificent examples of innovative construction. There are beautiful and affordable floating houses built according to the cradle-to-cradle principle that generate their own energy. It’s brilliant!
On the OECD’s list of countries with the most overvalued homes in the world, The Netherlands is in fifth place. According to the OECD, property in The Netherlands is 48% too expensive in relation to family income, and 39% too expensive compared to rental rates. This implies that fiscal mortgage interest relief cannot be sustained. The sooner we end it, the better.
Every country in Europe has its own real estate problems. The key is the artificially created scarcity by the real estate, monetary, governmental, and political elites. We need more flexibility, and to share the communal abundance of land. And I am saying this as a realistic entrepreneur, not as an idealistic socialist from the 1960’s…