Utrecht city council is planning to introduce tough new rules for rental properties up to €950 a month, despite the objections of developers and housing market experts, the Financieele Dagblad said on Monday.

The paper says the city’s executive board wants to make sure that the rent for new properties priced at between €710 and €950 a month does not go up by more than inflation for a period of 20 years.

Officials say the move is necessary to make sure that the city has enough affordable homes outside the rent-controlled sector and are due to discuss the plans with developers later this week.

Amsterdam has already made a similar move. It has agreed that 40% of new homes built within the city’s boundaries must fall under social housing rules, meaning the rent can be no more than €710 a month.

A further 40% must target middle income households with rents of around €850 per month or be affordable to middle income home buyers and the remaining 20% may target high earners. Currently in Amsterdam, just 30% of new homes must be social housing and there are no restrictions on the rest.

Poor quality

Institutional investors organisation IVBN and project developers lobby group Neprom both say they understand why the cities want to ensure more affordable housing is built.

But Utrecht’s plans in particular ‘go so far’ that investors will be discouraged from building, a spokesman for Neprom told the Financieele Dagblad.

Johan Conijn, a professor at Amsterdam University’s school of real estate, told the paper the rules will lead to projects being cancelled and poor quality housing.

And Peter Boelhouwer, a professor at Delft University of Technology said: ‘You cannot solve the shortage of of affordable housing in a city like Amsterdam in 20 or 30 years. Buildings production is far too slow for that.’