A limited number of builders and contractors own so much land in some communities that it can increase home prices or cause fewer homes to be built. Two professors and deed warn about this in a study commissioned by the market supervisory agency for consumers and markets (ACM).
Researchers argue that the power of construction companies and contractors can be used to slow the pace of construction, provide less quality or raise prices. Even smaller construction companies with construction capacity are struggling to intervene in some communities.
Especially in medium-sized municipalities, a small group of companies has a lot of power in the construction market. According to the research, a party has had too much power in Wageningen, Oegstgeest, Diemen, Pijnacker-Nootdorp and Schagen in recent years. These are usually large real estate companies that have a lot of influence on construction projects.
cooperation required
Sometimes municipalities see the need to work with one or a limited number of parties because housing projects are actually too big for them.
“Collaboration with market parties provides financial strength and (partially) relieves municipalities from development risk, but also puts municipalities in a dependent and sometimes vulnerable position in negotiations with these market parties.”
The researchers also note that housing projects in the Netherlands are often large-scale. Larger lots have more money to buy plots early for such a project.
transparency
The researchers did not investigate whether market power was abused. The ACM asks municipalities with specific information to contact them. The organization also wants the land market to be more transparent so that it becomes clear which company owns the land. It turned out to be difficult to find out during this research.
The Ministry of Interior, which is responsible for the housing market, has started a new study to find out what it takes to make the housing market work better.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
