Building promoters get interest-free loan to build cheaper rental houses in Flanders

Building developers will soon be able to obtain an interest-free loan to build cheaper rental housing. In exchange, they must offer such a home at a discount of 100 to 200 euros compared to the market value. The compromise should ensure more affordable rental housing and a reduction of the endless waiting list for social housing - which in Flanders still has 170,000 families on it in.

At the Council of Ministers last Friday, decisions were taken. The surplus, already 600 million euros, goes to the private sector as Flemish minister of finances Diependaele proposed. Private players will soon be able to get an interest subsidy of up to -1 per cent from the Flemish government. But there is a condition: they have to build social housing themselves with that money.

An important policy change is that the Flemish government is also focusing on "affordable rental housing". Building promoters can get an interest-free loan to build these cheaper rental homes. In exchange, they have to offer such housing with a discount of 100 to 200 euros compared to the market value. The maximum rent is 900 euros per month or 1,000 euros in the centre cities. There is, however, an income condition: a couple may earn up to 65,960 euros on an annual basis, a single person 46,170 euros.

"With this, we want to offer affordable housing to the lower middle class," says Diependaele. "Think of the recently graduated student or the divorced bachelor with children, who today have difficulty paying their bills."

Diependaele emphasises that the money for affordable rental housing does not come from the social housing pot. But the two circuits are linked. Building promoters who want to benefit from the state aid have to submit a 'mixed project'. At least one third of their project is social housing, at least one third affordable rental housing and one third they can choose freely. For the last category, they receive no money if it is not social or affordable housing.

Flemish MP Vera Jans (CD&V) is satisfied. "With 170,000 people on the waiting list, it is important to put all our efforts into building and renovating more social housing. Controlling savings will not be the driving force behind social housing, additional resources will."

"Now that interest rates are rising and raw materials are becoming more expensive, this decision comes not a day too late," said Flemish MP for Open VLD Mercedes Van Volcem in a reaction. "Many people today can no longer buy a home and those who rent often come up against a lack of affordable housing. Therefore, there is an urgent need for more affordable rental housing. The interest subsidy of -1 per cent is a positive measure and a step forward. Now we need a global plan that puts the affordability of housing high on the agenda."

Green MEP Celia Groothedde is not satisfied. It is the private sector that benefits from the interest subsidies, she criticises. "The Jambon government first gets a public service into trouble, takes resources away from it and then passes them on to the private market, which can benefit from the interest subsidies. This government pursues policies for property developers, not for the most vulnerable."

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