A large percentage of the Netherlands’ housing stock is in the hands of housing corporations, which are supposed to focus on people with the lowest incomes. Entrepreneur Annemarie van Gaal thinks housing benefits shouldn’t be handed over to the tenants and housing corporations should be punished for bad management.
Housing corporations in the Netherlands are still clocking up some 7,000 evictions a year. That means almost 30 families and their belongings are turned out into the streets every day of the week. Desperate people who have no idea where to turn to or where their children are going to sleep that night. It’s a terrible plight.
Of course they have had reasonable rents of about €500 to €600 and have received a housing benefit of a couple of hundred euros. That should make the rent affordable but in their stress they have used that money for more urgent matters. Benefits are never consistently used for the things they were meant for. After a number of months of non-payment the only possible outcome is eviction.
I have been asking myself for years why the government leaves it up to people to spend benefits as they see fit. Housing benefits are meant to pay the rent and health benefits are meant to pay the health care premiums. So why not subtract housing benefits from the rent at source? Why not let the tax office and the housing corporation sort it out between them? The monthly rent of €200 or €300 will then be easier to pay than a €500 bill.
I like simple solutions but if politicians insist on maintaining the benefits circus they might want to look into another idea. It is well-known that some housing corporations, like their tenants, make mistakes. They appoint incompetent, narcissistic managers, invest in huge vanity projects and dabble in derivatives. Staggering amounts of money are poured down the drain. Tenants are then faced with maximum rent increases. Society as a whole suffers because the corporations will be exempt from paying tax for years thanks to the problems they themselves have caused.
Sometimes the solution lies in combining the problems. Suppose the housing corporations get 90% of the housing benefits while the remaining 10% is subject to the tax to be paid for the year? Making a profit is at the basis of every company and housing corporations are no different. If a housing corporation is involved in loss-making cock ups it won’t get its hands on the 10%. A question of only having yourself to blame. Perhaps it will encourage them to implement honest, efficient and sustainable policies. It wouldn’t be a bad way of stimulating their ability to keep their own house in order.
Annemarie van Gaal is an entrepreneur and investor
This column appeared earlier in the Financieele Dagblad
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