The plan to keep Amsterdam homes affordable

AMSTERDAM: As Amsterdam house prices soar and investors seek to spend more in the Dutch capital, its left-leaning government is in a quandary: How does it keep the city affordable for locals?

The city of about 845,000 people – famed for its canals and bicycles and home to firms such as Adyen NV, ING Group NV and Royal Philips NV – has been adding about 10,000 new inhabitants every year since 2008.

Locals worry that an influx of Brexit refugees and expats from elsewhere in the world will put pressure on a market already facing short supplies.

In the midst of all that, Amsterdam’s new government in May presented ambitious plans to add an extra 7,500 houses a year through 2025. At the same time, the city wants a third of newly built homes to be earmarked for social housing, with rents of

€ no more than 711 a month, which threatens to make the market unattractive for both investors and builders.

Laurens Ivens, 41, the socialist party city official in charge of housing, is unmoved.

“We don’t want to become like New York, with a lot of rich and poor people and few in between,” he said in an interview at his office on the Amstel river.

“That’s why we try to steer things through new construction.”

Currently, rent on more than 40% of hous

€ ing in Amsterdam is capped at 711 a month, while the incomes of about half of the Amsterdammers would entitle them to move into such homes, Ivens estimates.

Households with a gross income of 60,000 euros a year - which is about 75% of the city’s population - can’t find a place in Amsterdam without assistance, Ivens said.

For the socialist politician, this imbalance justifies the city government’s focus on adding lower and middle income housing.

Another challenge faced by Amsterdam is the shortage of rental houses in the so-called middle segment - defined as places that go for

€ € between 711 and 971 a month - partly as a result of people buying-to-let and transforming apartments into places with more rooms for more people at much higher prices, according to the official.

In that segment, a further 1,670 new regulated rental houses will be constructed annually, he said.

“The city has become more expensive because more people want to live here, but also because many parties want to invest here,” he said.

“We’re dealing with a property market and the capital market here.” — Bloomberg