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Dutch Senate Approves Coalition Agreement on Housing Bill

Dec. 18 (Bloomberg) -- The Dutch Senate agreed early this morning to pass a housing bill that’s one of the pillars of the Dutch coalition government’s austerity package.

The bill was backed by 38 senators, while 37 voted against. Adri Duivesteijn from the governing Labor Party, who’d indicated he might oppose the measure, endangering its passage, voted in favor after Housing Minister Stef Blok promised a review by early 2016 and raised the possibility of setting up an investment fund for the housing market. The bill was approved in the lower house earlier this year.

Liberal Prime Minister Mark Rutte’s coalition with Labor only had a majority for the bill in the Senate in The Hague because of support from three opposition parties. A Duivesteijn vote against would have canceled out that one-seat advantage.

The housing bill gives homeowners more time to pay down their mortgages, while annual rent increases for people earning more than 43,000 euros ($59,000) a year would be capped at 4 percent. Housing corporations would have to pay a levy reaching 1.7 billion euros a year in 2017.

Duivesteijn was critical of the levy, saying the housing corporations need funds to invest.

‘No-Go Areas’

“No-go areas are being created right now,” he told fellow lawmakers yesterday, urging the renovation of residential areas built in the 1950s.

“For that purpose, billions in investment funds are needed,” Duivesteijn said. “When you take billions out of the sector, it also means that these areas cannot be renovated in a timely and responsible way.”

A separate plan to trim tax deductions for pension contributions ran into obstacles in October after the Senate demanded amendments to the bill. The coalition and three opposition parties are now close to a deal on pension reforms, the newspaper Het Financieele Dagblad reported today. The parties agreed on the main points of austerity measures worth almost 3 billion euros yesterday, with the details still to be worked out.

The Dutch government reached an agreement in October with opposition parties for a 6 billion-euro austerity package for 2014, including spending cuts and tax increases. That’s on top of a four-year, 16 billion-euro package approved late last year.

The Netherlands returned to growth in the third quarter, having suffered three economic slumps since the global financial crisis started in 2008.

To contact the reporters on this story: Corina Ruhe in Amsterdam at cruhe@bloomberg.net; Fred Pals in Amsterdam at fpals@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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