Marietta Haffner

Threats to the Dutch Unitary Rental Market

Abstract Social rental housing has once again captured a strong position on the Dutch political agenda. This has happened especially since the European Commission sent a letter to the Dutch government indicating that the Dutch social rental sector was not considered EU-proof from the viewpoint of the European Unions competition policy. The letter coincided with criticisms from Dutch politicians that housing associations had not been performing well enough for some time, given their abundant resources. However, in an international context, the Dutch social rental sector is often regarded as a good system for providing affordable housing to those who need it, without the sector being marginalized and stigmatized. Jim Kemeny has classified this market as one in which the social rental sector in due course competes with the private rental sector on equal or almost equal terms as a unitary rental market. The starting point of this paper is whether the achievement of a unitary rental sector is threatened by the EUs competition policy. It will also discuss two other possible threats to the future of the Dutch unitary rental market: the threat to take surplus capital away from housing associations and have government decide on what to invest; and the attractiveness of home-ownership to households. We conclude that the character of the Dutch unitary rental sector is indeed under threat, although mostly by stealth.

Rent Regulation: The Balance between Private Landlords and Tenants in Six European Countries

Abstract The private rental sector has been declining in many European countries. In describing the decline of the private rental sector, it is often suggested that a causal relationship exists between the decrease in private renting and rent control. The assumption is that the stricter the form of rent control, the greater the decrease in private renting levels. Or, conversely, that with fewer rent controls there are more opportunities for the private rental sector. At the same time, however, an unregulated rental market may result in insecurity for tenants. This text focuses on conflicts of interest between private landlords and tenants in the regulation of rents, from a welfare economics viewpoint. We present the results of a comparative study that involves France, England, Germany, Spain, Sweden and the Netherlands. We describe the system of rent regulation in each country. We conclude that the balance achieved between landlords and tenants as a result of rent regulation may not be as clear-cut as it is often presented to be.

Dutch Personal Income Tax Reform 2001: An Exceptional Position for Owner-occupied Housing

This paper examines how personal income taxation has changed across countries and whether and how this has affected the taxation of owner-occupied dwellings. It presents a partial analysis as it focuses on imputed rent taxation and the mortgage interest deduction. Furthermore, the paper places housing taxation in a wider context by describing different benchmarks which could be used to assess the taxation of owner-occupied housing in different types of personal income tax. These international and theoretical points-of-departure are used to evaluate the taxation of owner-occupied housing in the Netherlands. The paper concludes that all along political arguments have conquered theoretical premises to the advantage of the owner occupier in comparison to the private landlord. It also concludes that the theoretical base in 2001 has become so weak that owner-occupied housing is in an exceptional position in comparison with other private wealth thus becoming an easy victim for future tax savings.

The Affordability of Housing in the Netherlands: An Increasing Income Gap Between Renting and Owning?

Housing became more expensive in the Netherlands between 2002 and 2006, a trend which has been demonstrated using various measures of affordability. The expenditure-to-income ratios calculated for households confirm that the average cost of housing rose for tenants and homeowners, as well as for most income groups generally. This contribution analyses the development of various components of household expenditure which contributed to these higher ratios. One of the most important considerations here is the fact that average household disposable incomes either fell (tenants) or remained stable (homeowners) during the four-year period under review. This leads to the question of whether these increasing income differences between renting and owning can be attributed to the business cycle alone, or whether they are part of a longer-term trend that will eventually result in a rental sector that provides housing for those on lower incomes. The findings suggest that a longer-term or structural widening of the income gap between renting and owning may indeed be taking place.

House prices and income tax in the Netherlands: an international perspective

A sharp drop in prices on the home owner market is not only hard to predict but also the reason why many politicians would prefer to implement any tax changes gradually, if at all. Against this backdrop, the present study explores the relationship between a change in the personal income tax treatment of home ownership and a change in house prices. First, based on a literature study, it identifies the factors in the development of house prices. Then, using data from several European countries, it compares the effects of personal income tax reform on the development of house prices. As the comparison reveals, the method and timing of adjustments in the tax system have a strong influence on house price development. Furthermore, econometric modelling of the Dutch home owner market suggests that when the restrictions on tax concessions are less stringent, the real decline in house prices is not as steep and does not last as long.

Savings for Old Age? Housing Wealth of the Dutch Elderly

A combination of the demographic trend of an ageing population and the increase in wealth in owner‐occupied dwellings over the last decade raises a new research question in the Netherlands. How do the Dutch elderly spend their housing wealth and what can be predicted about their future behaviour? They may use their housing equity to provide an income in old age, or they may pass on their housing wealth to descendants. By compiling evidence available in the Netherlands, this article examines the use(s) to which the Dutch elderly put their housing wealth. The analysis is based on data, literature and information collected during interviews with elderly people. The main conclusion is that housing wealth will, for the greater part, keep on functioning as unused savings for the Dutch elderly for the foreseeable future.

The Effect of Housing Expenses and Subsidies on the Income Distribution in Flanders and the Netherlands

This study explores the role of housing expenses and subsidies with respect to income distribution in Flanders (the northern part of Belgium) and the Netherlands in 2005–2006. It analyses income poverty and inequality by comparing equivalent disposable income before and after housing expenses with a relative poverty threshold and the Gini coefficient. Poverty and income inequality increase in both ‘countries’ when equivalent disposable income is corrected for housing expenses. Furthermore, the relative position of outright owners and social tenants regarding poverty improves. Housing subsidies play a (partly) different role in Flanders and the Netherlands. The implicit social rent subsidy in Flanders and the explicit housing allowance in the Netherlands serve the same goal; however, they both redistribute income relatively strongly in favour of low-income tenants. The tax relief system on the other hand increases income inequality in society, in both Flanders and the Netherlands, whereas our comparative analysis suggests that tax relief does not have a moderating effect on net housing expenses.

Costs and fiscal subsidies in owner occupation: Method and outcomes

This article formulates an answer to the followingquestion: Which concept is most suitable to compare the levels ofhousing costs and fiscal subsidies among owner-occupiers and how canthis concept be applied? First, the concepts of housing expenditure anduser costs of capital are evaluated. The preference for the latter conceptis then explained and the notion of subsidy is defined within the usercost framework. Finally, the use of the preferred concept is illustratedwith hypothetical calculations for sample households in Denmark,England, the Netherlands and Germany.

Competition and Social Rented Housing

Abstract This paper aims to make a contribution to the debate about the meaning of competition as applied to social housing and the usefulness of a competitive paradigm as a comparative analytical tool. Social housing providers have been asked to become more competitive and more market orientated in Europe. But what exactly do these terms mean and what are the defining features of competitiveness? And how can concepts of competition be applied to social housing, given that social housing is not allocated by price and market demand? Starting in mainstream economic analysis the meaning of competition and governments’ roles in relation to competition are examined. The paper then applies key features of competition to social housing in order to explore the meaning of competition within social housing and between social housing and market housing. It then considers competition as a framework for examining the performance of social housing systems and the relationships between social and market rental housing. The possible implications of (more) competition within social housing and between social housing and market housing are discussed. Finally, the paper suggests that the competitive paradigm can be useful in comparative analysis because it can potentially supply a graded taxonomy that identifies and compares degrees of competitiveness.

Bridging the Gap between Housing Stress and Financial Stress: The Case of Australia

In recent decades, housing affordability has been increasingly linked to household financial outcomes where high housing costs relative to income are perceived to negatively affect financial well-being. However, the traditional measure of housing affordability in Australia is housing stress, which is subject to widespread criticism as an inadequate representation of overall financial stress. This methodological paper first determines the extent to which housing stress correlates with experiences of financial stress and, second, demonstrates ways in which the measure can be modified to deliver a more reliable indication of how housing costs affect financial well-being. The study contributes to the international literature by showing how the use of longitudinal data can improve the measure of housing stress providing a more accurate assessment of the relationship between housing costs and financial well-being.