Simple solutions to complex problems

Signature fetishist as well as Minister of Housing Hugo de Jonge travels town and country to sign regional housing deals with devotion everywhere, which should give space to realize much-needed housing. The almost sacred number of 900,000 until 2030 is the final goal. With current market trends of rising or stabilizing construction costs and diminishing returns due to rising interest rates, a nearly impossible task best described as sisyphean labor. I give it to the shrewd minister, with endless opportunism. Smoothing out the housing crisis is a Gordian knot, where you solve one problem and another emerges. 

Market parties are only too happy to contribute to solving Hugo de Jonge's problem, as perceived by the media, and come up with all kinds of creative solutions. Architects passionately and lovingly design modular flex-homes in which you can convert your bathroom into an annex for your 90-year-old mother-in-law in the blink of an eye, because all the nursing homes in the Netherlands are being reorganized. Contractors rücksichtslos all kinds of housing factories out of the ground, which have assembled a home on site within the time you do number two on the toilet. All under the banner of faster and cheaper, because if we do it faster and cheaper, the problem of those 900,000 homes will solve itself in no time. 

Complete nonsense, of course. If it were that simple, we wouldn't have a housing shortage now. The housing market is a complex set of housing supply and demand, driven by centrally regulated interest rates. The housing market is linked to a troubled land market where speculation about zoning and programs determine and drive up the price of land positions. The whole thing is also heavily government-driven, with ambitions for affordability and sustainability. A Kafkaesque whole that is difficult to control and certainly cannot be solved by simplistic ideas and initiatives. Architects' modular flex housing plays into a utopian romantic reality that does not exist; ultimately, no one wants his or her 90-year-old mother-in-law right next door. Also, this often leads to a suboptimal business case. Developers are still of the Friedmanian school and will never accept a suboptimal business case. Contractors' factory homes are cheap and desirable, but the one-size-fits-all notion often does not apply in unruly practice, where inner-city land positions are often incurable and require customization. Such initiatives by market parties are pearls before swine, well-intentioned but ineffective in solving the challenge we face. 

Simple and linear solutions to the housing shortage do not exist. Those who do claim there are are selling carrots for lemons. The many-headed monster will have to be tackled from several facets. Flexible concepts and cheaper construction may be one or two ingredients of the recipe, but certainly not a panacea. In addition, the housing minister will also have to come up with heavier artillery than the pen. Simply putting a few signatures on housing deals or advising a rich friend "just doesn't do the trick. As a shot across the bow, I see a number of solution approaches that, whether in combination or not, can help provide more housing in the short term. Establish a fund from which developers can finance the unprofitable top, created by rising interest rates and construction costs, on favorable terms (sort of a NOW coronagraph). Further regulating the real estate market to prevent speculation on land, which would put a cap on the price driving effect and thus unachievable residual land values. The development of the government's own positions and the curtailment of objections during the zoning and building permit process.

The solution to the current crisis cannot be captured in one or two measures. It will have to be a package of measures that respond to the various facets of the housing market. Even if these solutions lead to even further unpopularity on the part of the minister. The past decades have shown, though, that soft-hearted masters make stinky housing wounds....