Social Housing and Illegal State Aid: The Agreement between European Commission and Dutch Government

Abstract

The size of the Dutch social housing sector, with a 32 per cent share of the housing stock, has prompted concerns over the ‘level playing field’ of competition between social and commercial housing providers. In 2007, this concern culminated in a complaint from the Dutch Association of Institutional Investors (IVBN) to the European Commission, with particular reference to the distorting effects of state aid to housing associations. In December 2009 the European Commission published its decision about the conditions for state aid to Dutch housing associations. The Commission agrees with the proposal of the Dutch government that housing associations allocate at least 90 per cent of their social rental dwellings to households with an income of less than EUR 33,000, if they want to remain eligible for state aid for these activities. Furthermore, housing associations may invest in real estate for public purposes. With its decision, the Commission ends a long period of uncertainty and contributes to creating a level playing field on the Dutch housing market. Nevertheless, the Commission's decision also hampers policies to increase tenure diversification and social mix in Dutch neighbourhoods.