A theoretical analysis of inherent inefficiencies in the current and three proposed Dutch social housing policies.

This paper examines inherent inefficiencies of Dutch social housing policy from an economic point of view. Using a systematic and theoretical approach, this paper analyzed the current policy, and three proposed policy changes. Building on basic Supply and Demand theory this paper found inherent inefficiencies when housing subsidies are not differentiated to individual household circumstances. This paper found that this inefficiency occurs in both the current social housing policy as well as in one of the proposed changes. The two other proposals do not suffer from this inherent inefficiency and can potentially result in an optimization of the Dutch social housing policy. This paper fills a void in current literature where recently made proposals for social housing policy changes have not been systematically compared on their economic fundamentals. The results of this paper should be used by researchers and policymakers aiming to improve Dutch social housing policy. Finally, this paper also discusses potential spillover effects when applying individually differentiated housing subsidies, such as social segregation and poverty traps.