A critical review of the modernization of Dutch rent policy

Since the Second World War, the Dutch rental market has been subject to close government regulation. In the 1970s, however, landlords started to gain greater freedom in setting the initial rental price and in determining the level of annual rent increases. In late 2004, the government announced plans whereby the hitherto cautious liberalization of the market would be continued with greater vigour. The proposed modernization of rental policy will be achieved by removing all restrictions on one quarter of the rental stock, and by implementing substantial rent increases in the remaining regulated sector. This paper gives a critical analysis of the new rent policy. This is done in the light of two considerations: the current context of the housing market, and the objectives and effects which the government hopes to achieve through the new rental policy. The author concludes that the implementation of this policy will have many disadvantages, and that alternative strategies exist which will not only serve to attain the objectives of public housing policy, but will have a less disruptive influence on the Dutch housing market.