Developers of new homes own so much land in some municipalities that this can lead to higher prices, delays or the construction of less good houses. The regulator ACM warns against this. Housing minister Hugo de Jonge will intervene.
Developers and builders, especially in medium-sized municipalities, have a considerable ‘finger in the pie’ when it comes to new housing estates. A few, often large real estate parties own a lot of land in a village or city. And that involves risks, according to the Netherlands Authority for Consumers and Markets (ACM).
“They therefore have a lot of influence on the plans for the construction of new homes. This influence can be used in negotiations conducted by municipalities. When real estate developers and builders have the upper hand, there is a risk of high prices, a slowdown in the pace of construction, or less quality in an already tight housing market.”
ACM had a study carried out by two professors: Edwin Buitelaar (Professor of Land and Property Development at Utrecht University) and Erwin van der Krabben (Professor of Area Development at Radboud University). This problem mainly occurs in medium-sized municipalities, the duo write.
Cooperation with a large party is sometimes the only option
‘They face major housing challenges that in fact exceed the scale of a medium-sized municipality. This implies that municipalities do not always have sufficient expertise, manpower and financial scope to manage these projects.’
Collaboration with a large market party sometimes seems to be the only option. ‘This provides financial strength and removes (part of) the development risk from municipalities, but at the same time it can place municipalities in a dependent and sometimes vulnerable position in negotiations with those market parties.’ Because it is so attractive to work with a large developer, it is difficult for small parties to get a foot in the door. The result: large parties encounter few competitors.
Ministry intervenes
The Ministry of the Interior and Kingdom Relations, under which De Jonge falls as Minister for Housing and Spatial Planning, intervenes in this. Partly as a result of this study, it has commissioned a study to see what is possible to make the new-build market work better in this area. Moreover, according to ACM, the land and new construction market is not very transparent. For example, it turned out to be difficult for the researchers to find out in the Land Registry which developer had purchased which land from a municipality. Make that market more transparent, according to the regulator.
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