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In 2006, responsibility for implementing the Dutch housing allowance system was transferred from the Ministry of Housing to the Tax Authority. It has since been renamed, and is now known as the ‘rent rebate system’. A number of dilemmas have become evident since the 2006 changes. Attention has shifted to how to implement the system effectively: how to limit the overconsumption of housing services, how to avoid moral hazard, how to reduce outright fraud, how to reduce the poverty trap, and how to prevent the escalation of public spending. These new dilemmas have led to the central research question in this article: how to redesign a system of rent rebates? The discussion of these dilemmas points to further changes. Proposals for a redesign of the rent rebate system in the Netherlands are presented. These proposals could also be relevant for other countries. [ABSTRACT FROM PUBLISHER]

In the Netherlands 95 per cent of all rents are regulated. The Housing Minister announced in her Rental Letter of November 2004 that this would be reduced to 75 per cent. At the same time she wants the housing associations to contribute €250 million a year to the increasing public expenditure on housing allowances and she wants the social and commercial landlords to invest more in new rented accommodations. This paper describes the content and background of the Rental Letter and analyses its policy proposals. It deals with the debates between the Housing Minister and parliament on rent policy and it indicates the pros and cons of the Rental Letter. We conclude that, as a result of the Rental Letter and some additional policy developments, the Dutch social rented sector (with a current market share of 36 per cent) is now under fire. [ABSTRACT FROM AUTHOR]

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This paper examines income-related housing support in Britain and the Netherlands. It considers the main issues that are at stake in current policy discussions, compares the arguments that are put forward in the two countries and draw conclusions about the future of income-related housing support. In both Britain and the Netherlands political discussions about the possible introduction of housing vouchers are observed. The most complicated issues are the poverty trap and unemployment trap, and housing consumption incentives. Moral hazard concerns can result in complicated anti-fraud measures that may add to the burden of administering income-related support. It is expected that the way in which income-related housing support schemes in both countries are designed and administered may come under closer scrutiny. Politicians want these schemes to be in tune with the need for labour and housing market mobility, wage flexibility, and the need to bring the public budget under control. [ABSTRACT FROM AUTHOR]

This article compares the American programs of rent subsidies with the Dutch system of housing allowances, emphasizing how these instruments of housing policy have been tailored to the situation in the respective countries. Economists in general and American economists in particular believe in competition and are usually unsympathetic to the idea of supply-side subsidies. If certain matters need government support, income tax credits are considered before subsidies.

In 1979, the Dutch owner-occupied housing market collapsed due to a combination of poor economic prospects, a sharp increase in the rate of unemployment and an unprecedented interest rate of 10-11%. Cabinet and Parliament refused to accept the fall-off in housing production which seemed to be in prospect and the then State Secretary of Housing, Gerrit Brokx, put forward proposals for a considerable increase in housebuilding in the subsidized rented sector. An appeal was made to the housing corporations, and to (private) institutional investors to bring about this extra production. The housing corporations were only too willing to build more, but in the case of the institutional investors Brokx encountered problems. In 1975 "dynamic costing" had been introduced for the whole subsidized rented sector. This means that in the early years of operation the investor has to be satisfied with low returns, but since rent increases are anticipated over the total loan period (50 years), the losses of the early years are made up for later. Permanent government involvement in subsidized housing is thus assumed--the authorities, as it were, guarantee the annual increase in rents.