Spring 2025 rent freeze proposal in Dutch social housing

In spring 2025, the Dutch coalition government introduced a controversial proposal to freeze rents in the social housing sector for two years. Part of the Spring Budget Deal, the measure aimed to ease financial pressure on tenants by halting rent increases for homes under €900 per month until mid-2027.

Although politically motivated and initially welcomed by some parties, the plan quickly faced fierce resistance from Dutch housing associations, regulators, legal experts and other professionals.

The freeze was intended to benefit approximately 2.3 million tenants living in housing association-owned properties. However, it excluded around 500,000 tenants in privately owned social housing, creating a two-tier system that raised serious legal concerns.

Housing associations: from outrage to legal action

Dutch housing associations, represented by national housing federation Aedes, reacted with alarm to the proposed freeze. The measure contradicted earlier agreements permitting rent increases of 4.5% from July 2025 and 3.6% from July 2026, revenues which were deemed essential to fund new construction and decarbonisation measures under the National Performance Agreements (NPA).

Aedes estimated the freeze would cost the sector over €1 billion in lost annual rental income. The financial impact extended far beyond immediate rental losses. Aedes Chair Liesbeth Spies warned that the measure would jeopardise plans to build 30,000 new homes annually and the insulation of 1.6 million existing units. After talks with Housing Minister Mona Keijzer broke down, Aedes moved to initiate legal proceedings to block the legislation.

Ortec Finance models: the sector’s financial compass

We supported the sector by assessing the feasibility of the National Performance Agreements and quantify the impact of the proposed rent freeze. Our models and analysis provided housing associations with the robust data needed to challenge the proposal while highlighting the broader risks to housing availability, affordability, and sustainability.

Our calculations showed the freeze would have reduced the sector’s investment capacity by a staggering €49 billion until 2035. The decline in rental income from 2025onwards would cause the sector's investment capacity to decline enormously, making the national performance agreements unattainable, leaving future tenants and home seekers with fewer affordable housing options.

Warning and call to action

The Waarborgfonds Sociale Woningbouw (WSW), which guarantees loans for housing corporations, echoed the concerns raised by Aedes’ and Ortec Finance. WSW warned that the proposed freeze would severly weaken cash flows – the sector's primary source of income - and in turn reduce borrowing capacity. It estimated that 140 of the 262 Dutch housing associations could face financial problems within five years.

To asses the risk, WSW requested housing associations to submit updated financial scenarios that reflected the implications of the rent freeze. Rapid scenario modeling was essential, and nearly all Dutch housing associations relied on WALS, our financial forecast application to generate multiple impact scenarios. These scenarios enabled WSW to:

Evaluate how the freeze would affect future cash flows
Assess whether associations could continue meeting their obligations under existing guarantees
Determine if additional buffers or adjustments to guarantee ceilings would be necessary

At the same time, WSW began investigating whether the growing unpredictability in rental policy warranted structural changes to the guarantee system to safeguard long-term stability.

Collapse of the cabinet: the final blow

In early June, the Council of State issued a damning advisory, declaring the proposed rent freeze “legally flawed” due to unequal treatment of tenants and procedural shortcomings. Days later, the governing coalition collapsed, prompting Minister Keijzer to withdraw the proposal. Without majority support in the Senate and facing mounting legal and financial risks, the plan was shelved before it could be enacted.

Lessons for the sector

The rent freeze saga leaves several key takeaways:

Predictability is paramount: Housing associations need stable rental income to plan and invest. Sudden policy shifts can derail entire strategies.
Legal robustness matters: Policies must be inclusive and legally sound. Excluding private social tenants created a system that could not withstand judicial scrutiny.
Data is power: Ortec Finance’s sector modelling and analyses proved essential in demonstrating the real-world impact of the freeze.
Resilience through unity: The coordinated response from Aedes and WSW highlighted the sector’s ability to mobilise and defend its mission.

Although the rent freeze never materialised, its legacy is clear:the Dutch social housing sector must remain vigilant, data-driven, and politically engaged to safeguard affordability, sustainability, and long-term resilience.