Unaffordable housing is the main election issue, but no party is tackling the cause

This resource, published by Follow the Money and authored by Thomas Bollen, discusses the critical issue of unaffordable housing in the context of the upcoming elections. The article highlights that while political parties promise more "affordable homes," their solutions fail to address the root cause: an excess of new money flooding into the housing market.

Political parties across the spectrum agree that housing is unaffordable, with the VVD, GroenLinks-PvdA, PVV, D66, and CDA all voicing similar sentiments. The article cites alarming statistics: the average income has doubled in thirty years, yet the average house price has increased fivefold, resulting in a situation where buyers now need to pay over ten years' worth of gross salary to purchase a home that would have cost just four years' salary three decades ago.

Despite the focus on increasing housing supply, Bollen points out a collective blind spot regarding the influx of money into the housing market. The article notes that while many political parties advocate for new construction, they overlook how increased money supply drives up housing prices. The current housing shortage has escalated from 3.2% of total housing stock to nearly 4.8%, necessitating the construction of 226,000 additional homes to reduce the shortage to 2%.

Political responses focus heavily on new construction as a remedy for the housing shortage. However, proposals for demographic changes, such as limiting immigration, also surface as potential solutions. The article emphasizes that demographic factors, like the increasing number of single-person households, particularly among the elderly, are also significant contributors to the housing crisis.

The article explores the role of banks in the housing market, revealing that since the liberalization of the banking sector, banks have had the freedom to issue more and larger mortgage loans. The combined mortgage debt in the Netherlands has skyrocketed from €93 billion in 1990 to €860 billion in 2025. This situation leads to a cycle where increasing mortgage availability drives up housing prices, creating a "housing finance cycle" that exacerbates the affordability crisis.

While various political parties propose measures to tackle the housing market’s issues, few address the underlying problem of excessive money creation. The article argues that increasing housing supply does not necessarily lead to lower prices, a notion supported by studies from De Nederlandsche Bank, which found no historical correlation between housing prices and shortages.

The article concludes that merely building more homes will not solve the affordability crisis, as current definitions of "affordable housing" are inflated. Effective solutions must include addressing the fiscal discrepancies between renting and buying, and reevaluating the mortgage interest deduction that primarily benefits homeowners.

To genuinely tackle the housing crisis, the article urges a reevaluation of the monetary system and advocates for a collective understanding of the challenges posed by excessive money creation in the housing market. Without addressing these core issues, the article suggests that affordability will remain an elusive goal in the future.