Dutch plan aims to close council funding gaps and speed up housing

The Dutch government plans to change how the value of land is assessed for housing developments, with the aim of reducing municipal funding gaps and speeding up construction. The proposal would count the cost of public infrastructure earlier, when calculating land’s value, and clarify which costs councils can recover from developers.

Councils are responsible for infrastructure such as roads, sewerage and green space, but cannot always recover their full costs, the government says. Meanwhile, speculation on land resales can push prices up. The resulting shortfalls and prolonged negotiations can delay projects, raise costs or prevent them from going ahead.

Under the proposed residual land-value method, public costs would be included at the outset when the land’s contribution value is determined. The government also plans to clarify which costs councils may pass on to developers.

Housing minister Elanor Boekholt-O’Sullivan said the changes should give councils and developers more certainty and help projects get under way sooner. The government says the method needs careful development and is expected to affect mainly future housing projects. It will be worked out with councils, developers, valuers and other interested parties.

A transition arrangement is intended to prevent disruption to projects already under way. The government says its aim is to accelerate housebuilding without unnecessarily discouraging private investment.