Wall of Money

Read in NRC Handelsblad of 9 and 12 June 2015:

Alarming news. Vacant real estate in the Netherlands since 2010 more than dubbeled. The total amount of square meters empty office space is now 9 million, of m2 empty retail space it’s 2,7 million. And it gets worse, even after the crisis. Why? Because a ‘wall of money’ is flooding the real estate market since the financial crisis ended. That was the alarming news in NRC Handelsblad of 12 June 2015. Edwin Buitelaar, researcher at the Planning Bureau for the Built Environment in The Hague, gave a serious warning. However, no one seems to listen. While planning restrictions get less and less tight (spatial planning in general seems to be hampering economic growth), money flows in. The coming years the real estate market will grow on a massive scale, because there will be no profitable alternative to invest in. So vacant buildings will become the standard soon. Buitelaar thinks especially new shopping malls will have a devastating effect. Whole shopping streets could become ghost areas. Capitalism could destroy our heritage and our communities.

However, economists think the building industry is key for the recovery of the national economy. Especially the housing market is crucial in their eyes. Maarten Schinkel wrote on this new dogma on the front page of NRC Handelsblad of 9th of June. In ‘Optimism about the Dutch economy thanks to the housing market’ he explains why. Over the last twenty years the Dutch economy and the housing market have become heavely intertwined. In fact, VINEX (National Policy on Spatial Planning) has become a part of the Dutch national monetary policy. It means that the value of all the housing stock should be rising permanently, otherwise the economy will not grow. Still many dwellings are ‘under water’, (which means: the actual value is lower than when they were bought). And we all know that it takes a long time before dwellings will be abandoned. At this moment many Dutch households already stick to their place, because they cannot sell their real estate. With this ‘wall of money’ coming in it will even get worse. It may cure the economy, but it will destroy the Dutch landscape. Capitalism without planning is a horrible scenario. (photo: RAAAF, Vacant NL)