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Tenants in the Netherlands not only pay relatively more for their housing consumption than owner-occupiers, but also appear to be subject to Schwabe's law on rent. This law states that households with a lower income are confronted with higher rent-to-income ratios than households with a higher income. In the Netherlands most rents are regulated, so these are expected to be at below-market levels. Tenants of these dwellings are eligible for housing allowances if their income is considered insufficient for paying the rent. The hypothesis is that a rental dwelling with a regulated rent and for which the tenant receives a housing allowance should be affordable to the tenant. However, as this paper shows, even a maximum degree of government intervention (rent regulation and housing allowances) plus the impact of affordable rent setting by landlords, leading to a maximum subsidisation of the tenant, cannot prevent a situation whereby tenants are paying an unaffordable rent. And an unaffordable rent suggests that these tenants may indeed feel impacted by housing affordability problems. [ABSTRACT FROM AUTHOR]

Recently housing affordability has reached the agenda in Flanders and the Netherlands, giving a good reason to present a review of the concept of affordability and different definitions. The concept of short-term affordability, which is concerned with financial access to a dwelling and is based on cash flows, is combined with the concept of long-term affordability, which is about the costs of housing consumption. The use of these concepts is illustrated for Flanders and the Netherlands. They show that each concept has its own uses and that they are not interchangeable. However, both concepts indicate that in 2005 higher-income households, and especially homeowners (with a mortgage), were relatively better off than lower-income households, particularly renters. Homeowners' higher income levels on average more than compensate for their higher expenses in comparison with tenants; they also receive higher explicit subsidization and in times of rising prices they also receive expected returns on housing. [ABSTRACT FROM AUTHOR]

Housing became more expensive in the Netherlands between 2002 and 2006, a trend which has been demonstrated using various measures of affordability. The expenditure-to-income ratios calculated for households confirm that the average cost of housing rose for tenants and homeowners, as well as for most income groups generally. This contribution analyses the development of various components of household expenditure which contributed to these higher ratios. One of the most important considerations here is the fact that average household disposable incomes either fell (tenants) or remained stable (homeowners) during the four-year period under review. This leads to the question of whether these increasing income differences between renting and owning can be attributed to the business cycle alone, or whether they are part of a longer-term trend that will eventually result in a rental sector that provides housing for those on lower incomes. The findings suggest that a longer-term or structural widening of the income gap between renting and owning may indeed be taking place. [ABSTRACT FROM AUTHOR]