New student accommodations are constructed in a way that allows the occupants to be eligible for housing allowance. And rents for existing individual rooms are set by taking the housing allowance limit into account. In Rotterdam this is the case for almost three-quarters of the housing association accommodations for students.
This was the conclusion reached by Yournalism.nl, a platform for investigative journalism, and 11 other university and university of applied sciences media channels from across the country, including Erasmus Magazine. These findings were the result of an extensive analysis of student housing currently being offered.
Optimal use of housing allowance
The rents for many of the housing association accommodations in Rotterdam for students are set taking the housing allowance limit into account. 71.43 percent of the accommodations examined were no more than €25 under this limit. Up to the age of 23, young people receive housing allowance for self-contained accommodation with a maximum rent of €403. Service charges are added to this, often resulting in a total rent of about €500. A higher maximum rent of €710 applies for young people older than 23 who wish to apply for housing allowance.
In Kralingen it’s not unusual to pay €400 per month for a room in a private home. Somewhat more expensive self-contained student accommodations seem to be a less attractive option than a room in a shared house, but thanks to housing allowance that’s not the case. Do the math: a 22 year old student paying €350 basic rent and €130 in service charges per month for renting a self-contained studio flat with its own front door entrance, shower and kitchen, ends up paying less when you add everything up. That’s because this student is eligible for €168 in housing allowance and thus pays a net rent of only €312.
35,000 new student accommodations
Many additional student accommodations have been built over the past few years. After two national action plans to reduce the student accommodation shortage, prognoses for 2016 show 35,000 new student accommodations created since 2010. Many of these new student accommodations are self-contained units. In Rotterdam, 34 percent of student accommodations are self-contained, a much higher percentage than in most other cities with universities.
Kences, the interest group representing student accommodation providers insists that self-contained student accommodations are badly needed because students are looking for more comfortable and attractive housing. However, housing allowance also appears to be an important reason for their stance. Since 1997 students renting a room in student housing do not receive housing allowance. In many cases, self-contained accommodations for students can be the same price, or even cheaper, than renting a room in student housing. Another factor is that over the past few years quality requirements for new student rooms have been relaxed, resulting in reduced building costs for these rooms. Where up to a few years ago the minimum dimensions for a self-contained student flat was 24 square metres, this is now 15 square metres.
Interesting market for private sector
These developments have made the student housing market interesting for commercial property parties and investors as well. In this context Bouwfonds acquired ownership of an estimated 1,200 student accommodations in Rotterdam, Amsterdam, Groningen and The Hague within a few years. Pension investor Syntrus Achmea owns 870 accommodations in Delft, Leiden and Amsterdam. Almost all of them are self-contained flats.
Student housing provider DUWO recently signed a contract with the German-Dubai investor International Campus AG for the construction of 2,250 student housing units in Leiden and Amsterdam. DUWO will manage and rent out these accommodations for a rental price that will allow students to apply for housing allowance.
Cutbacks
It’s difficult to say how many students receive housing allowance. However, Yournalism’s survey distributed in collaboration with 11 university and university of applied sciences media channels revealed that 45 percent of students renting accommodations from a housing association were receiving housing allowance. That percentage is above the average when compared to all Dutch tenants where approximately a third receives housing allowance.
Upon request, a spokesperson for the Housing minister gives a rough indication of the share of young people between 18 and 25 (this also includes individuals who are not students) within the total number of housing allowance recipients. Their share rose from 9.7% in 2009 to 11.6% in 2013. Other figures on file show that the percentage of housing allowance recipients with student grants and loans as their primary source of income rose from 3.6 percent in 2009 to 5.3 percent in 2012.
This steady rise in the number of students receiving housing allowance corresponds with the rising costs of housing allowance in general. According to prognoses these expenditures will reach four billion euro by 2019. In a letter from Housing Minister Stef Blok (VVD) sent this summer to the House of Representatives, he announced that possible cutbacks were unavoidable. A spokesperson for the minister could not comment at this time on how and if students will be affected by these possible cutbacks. “This is all part of the decision-making process for Budget Day that has not yet been finalised.”
