The Dutch Rental Market

For the Dutch housing market the RentalCal project will focus on the interaction between the ongoing rental market reform (a reduction of the share of regulated social housing) and energetic refurbishment of the existing housing stock.

The Dutch rental housing stock is rather old (75% has been built pre-1980), and dominated by social housing (over 80% is social housing). The Dutch government is keen on reforming the housing market, and transfer some of the existing social housing stock to the non-regulated sections. At the same time, this unique dominance of social housing, which is governed by around 400 local social housing associations, offers large scales of economies to trigger energetic refurbishments. 

1      Policy goals

The Dutch government, both national and local, is very keen on stimulating investments in energetic upgrades. Various subsidy programs have been launched to stimulate landlords to improve the energy efficiency of their housing stock.

Building codes for new construction are strict and ambitious, energy labels have been implemented on January 2008 to raise awareness, and vast subsidy schemes are made available to finance the upfront investments in long-term energy savings around the house.

2      National housing stocks

2.1      Housing stock and typology overview

Overview on the housing typologies based on the housing typology of TABULA/EPISCOPE, last updated on 02-09-2014, http://episcope.eu/building-typology/country/nl.html.

• Dutch homes tend to be of high quality. An average Dutch home offers over 105 square meters of floor space, spread over four rooms. Due to the high quality standards, homes are rarely demolished, and can easily last for over 100 years. 
• New construction numbers are low. Less than 1% of existing stock is being added every year with new construction.
• Energetic performance data of the housing stock.

Total energy consumption of private households by energy commodity.

© Statistics Netherlands, Den Haag/Heerlen 1-6-2015

Distributed amount of energy labels in the Dutch rental market by year of construction, measured in 2011 (A is energy efficient, G is energy inefficient)

·       Quantification of the housing stock

2.2      Ownership structure

• The Dutch housing market contains over 7 million dwellings, of which around 55% are owner-occupied
• The rental housing market is currently dominated by social housings, which has a market stake of over 80%. This rental market structure is, however, currently part of a large reform that is targeted at increasing the non-regulated portion of the rental housing market.

3      Energy retrofitting

3.1      Stakeholders

Energetic retrofits are commonly undertaken in stakeholder coalitions. Social housing associations have been keen on taking the lead and involving large construction firms and (local) government subsidies.  

‘Stroomversnelling’ (Highcurrents) and ‘Energysprong’ (Energyleap) are two examples in which these coalitions are stimulated using government support. In both cases, first mover advantage is being nurtured using coordinated efforts. Here local landlords cooperate with construction firms to create the scales of economies needed to make large scale retrofits financially sound.

3.2      Rental Markets

The Dutch rental market is dominated by social housing that is targeted at the lower end of the market. Dutch social housing is designed to provide affordable housing for those who are not capable (economically or socially) to find proper housing without the support of associations.

A large fraction of this rental housing stock has been built in the post-war period, when the rebuild after the war started and when Dutch society grew massively due to the baby-boom generation. As a result a lage fraction of the current stock dates from pre1980 when building codes were less strict and energy efficiency standards were low.  

As rent levels tend to be low across the lower end of the housing market, the share of utility (energy) bills in the total monthly dues is rather high. Hence, retrofitting rental housing will not only benefit society at large, but also the affordability of long-term housing for economically restricted households.

3.3      Financing and regulatory environment

Today, the largest part of the retrofit bill is paid by the landlord. Using green lease contract some of the future energy savings can be used to finance this investments. Furthermore, research shows that energy efficiency results in a sales premium, another source of future compensation for the upgrade expenses. The government stimulates the investment using both direct subsidy programs, and indirect financing advantages.