Analysis shows that affordability requirements can affect the number, size and location of new homes

Using a dataset of 391,000 recently built homes, the researchers examined the extent to which new-build homes already meet different affordability requirements and what the consequences may be for the type of housing being built and for prospective home-seekers. 

Two thirds of new homes must be affordable 

Housing affordability has received increasing attention in recent years. In the social housing sector, rents have become more affordable as homes have been allocated according to tenants’ incomes since 2016. Rents for existing tenants have also risen only modestly or have even been reduced. The Affordable Rent Act of 2024 introduced mandatory rent requirements for many privately rented homes. The recently introduced Housing Regulation Act of 2026 requires two thirds of newly built homes in each region to be affordable. 

This represents a significant change, particularly in expensive regions. Around half of all new-build homes met current affordability criteria in recent years, compared with around three quarters in the rental sector. Only six of the Netherlands’ 35 regions already met the new two-thirds requirement. 

Affordability requirements can reduce expected returns 

According to the researchers, affordability requirements reduce the expected returns on new housing, particularly in popular locations and in the social housing sector. They describe this difference as an ‘implicit tax’: the gap can ultimately be borne by developers, landlords, landowners or governments. 

Among housing associations, this implicit tax has increased in recent years as a result of affordability policies. At the same time, the lower rents charged by housing associations are part of their social mission and represent a transfer to tenants. In the private rental sector, the implicit tax is smaller and concentrated mainly in highly sought-after locations. 

Potential impact on the number and size of homes 

The researchers argue that affordability requirements can also affect prospective home-seekers. Lower expected returns may result in less housing being built, particularly by housing associations, whose investment capacity is already under pressure. Requirements may also create incentives to build smaller homes or to develop in less desirable locations, which may not correspond to the preferences of prospective residents. At the same time, residents may benefit from lower rents when another party in the housing chain bears the cost. In such cases, however, redistribution takes place through the housing market rather than through direct income support, making it less targeted. 

Researchers propose five policy recommendations 

Korevaar and Van Dijk make five policy recommendations. With regard to rent regulation, they recommend bringing rents in the social housing sector more closely into line with the quality of the property. They also propose revising the Affordable Rent Act, for example by using reference rents based on the longer-term average costs of comparable homes. For the requirement concerning the share of affordable new-build housing, the researchers recommend focusing primarily on social housing and on increasing the absolute number of affordable homes, rather than targeting a fixed percentage. Finally, they recommend that both affordability requirements and available funding should be tailored more closely to housing needs in individual regions.