More affordable housing by focusing on the high-end segment

Politically speaking, it’s popular to require a significant percentage of affordable housing in construction projects. “But a development site isn’t just a spreadsheet of housing units,” argues Jan Willem van de Groep in this issue of Zichtlijnen. Affordability shouldn’t be a sacred standard, but a control lever!

Utrecht now aims to make 80 percent of housing in large-scale urban development projects affordable: 40 percent social housing and 40 percent mid-range housing. Politically, that sounds compelling. After all, who could possibly oppose affordable housing in a city where teachers, nurses, and first-time homebuyers can barely find a place to live anymore?

Yet the effect can be counterproductive. Affordability isn’t a wish you can simply slap on a project like a sticker. It’s the result of a complex calculation: land value, acquisition costs, construction costs, interest, infrastructure, parking requirements, sustainability goals, public space, and time. Anyone who tweaks a single parameter—such as a rigid percentage—and assumes everything else remains the same is undermining the entire calculation.

It’s the uncomfortable truth: on paper, anything is possible. You can demand that a neighborhood be affordable, green, climate-resilient, nature-inclusive, low-traffic, energy-neutral, architecturally high-quality, and socially diverse. The question isn’t whether you can get those words into a coalition agreement. The question is who will foot the bill if they all have to be realized at the same time.

If revenues decline due to an increase in social housing and mid-range rentals, while costs for infrastructure, water, green spaces, and energy remain high, roughly one of these three things will happen: the municipality will have to contribute significantly more, the quality will be scaled back, or—and this is what usually happens—the project will be delayed because no one can make the business case work.

The irony is this: policies intended to increase affordability ultimately end up harming the very people they’re meant to help. A social housing unit that isn’t built helps no one. A mid-range rental unit whose construction is delayed helps no one. A neighborhood that remains stuck in land development for years helps no one. The most affordable housing isn’t the housing that makes up an ambitious percentage of the total, but the housing that is actually completed.

Utrecht should flip the question around. Not: What is the maximum percentage we can require? But: Which projects are currently stalled financially, and how can we get them back on track?

Affordability should therefore not be a sacred standard, but a control mechanism. Sometimes that means building more affordable housing because it’s financially feasible. But sometimes it also means lowering affordability requirements in order to be able to build the project at all. That may sound politically uncomfortable, but it makes more sense from a societal perspective. A project with 60 percent affordable housing that starts next year will benefit the city more than a project with 80 percent affordable housing that gets bogged down for a decade in discussions about unfeasible scenarios.

This isn’t a gift to developers, but a choice to prioritize implementation over empty ambition. The municipality should not act as a passive regulator in this process, but as an active facilitator that ensures transparency in the business case. This prevents flexibility from being diverted to profit margins rather than to housing.

This is crucial for large-scale area developments. A development site isn’t just a spreadsheet listing homes; it also requires the organization of transportation, energy, water, and amenities. Anyone who minimizes revenue and allows costs to rise as much as possible should not be surprised if the development stagnates or the quality declines.

Affordability should therefore not be assessed solely on a project-by-project basis, but primarily at the urban level: how many affordable housing units are you actually adding over the course of an entire year? This requires focusing on numbers, phasing, and feasibility.

Accelerating progress is also a matter of social policy. The housing crisis won’t be solved by the highest percentages in a coalition agreement. It will be solved by making projects that are currently stalled viable again.

So anyone who is serious about building affordable housing must not only dare to set standards, but also dare to do the math. Dare to differentiate. Dare to recognize that, in a stalled project, less affordability sometimes results in more affordable housing at the urban level.

Affordability starts with ensuring that homes are built.

About Sightlines

Sightlines is my way of taking the conversation about innovation in construction a step further. Not by shouting louder, but by looking more sharply. I write about what is going on under the surface: the assumptions, the systems and the choices that determine what we build and why. My ambition is to give direction to a sector that is always in transition, but unintentionally still thinks in old patterns too often. What systems are still holding back a construction that wants to be faster, more affordable and more future-proof?

Jan Willem van de Groep