The impact of abolishing social-housing grants on the compact-city policy of Dutch municipalities

Building on previously developed land is a top priority in Dutch compact-city policies. During the 1980s government grants supported building on these locations. In 1990 nonsubsidised housing accounted for only 5% of the housing programme for these inner-city sites. In 1995, as a result of the transformation of the welfare state in the Netherlands, the government abolished grants for the construction of social housing. This had a massive impact on the housing programme; and subsidies, as a proportion of the cost of infrastructure provision, dropped from 68% in 1990 to 30% in 2000. These changes have had a major impact on the role of municipalities and the powers they need to provide new housing on previously developed land. The municipalities’ lack of powers and the new market conditions are contributing to the present stagnation of housebuilding in the Netherlands, and both of these factors influence Dutch compact-city policy.