I’ve seen a lot of really poor coverage of Dutch issues in the foreign press since I’ve been living in the Netherlands. Journalists who think Antwerp is part of the country. Broadcasters who can’t pronounce Geert. Writers who cannot understand a parliamentary system. But the move of the European Medical Agency has put the international spotlight on the Netherlands once again and with that comes more terrible coverage of the country. Including this article, published in Reuters, which managed to get all the things wrong.
Amsterdam won the (literal toss up) vote to house the EMA, as the agency is planning to leave the UK following Brexit. This has, of course, brought up the existing problems with housing in Amsterdam. In short, housing prices in Amsterdam are rising and this means that fewer people can afford to buy homes in the city.
Let’s look at the article. First, there is a claim that:
“That has all coincided with a surge in the number of well-heeled expatriates – numbers have also doubled to 77,000 in 2015 from 39,000 in 2009, according to the city’s statistics office.”
The term expatriate is problematic because no one has a clear definition of what it means. In Dutch employment law, it refers to someone who was born abroad who moves to the Netherlands specifically for work who plans to stay for only a short period of time. As someone who, six years ago, planned to stay for 18 months, I can speak to why that is a difficult definition. The CBS (the Dutch statistics office) uses this definition:
“Born outside the Netherlands and non-Dutch nationality, at least 18 years of age but not older than 75, registered in the municipal population register, and earning a wage that falls within 15 to 35 percent of the highest wage levels in their sector.”
So let’s go with that. By that definition, in 2015, there were 39,000 – 75,000 (depending on how you calculate the salary.) That’s in the entire country. Seeing as how every single person who meets that definition doesn’t live in Amsterdam, there’s a discrepancy here.
The last good data I have from the Amsterdam Gemeente on this is from 2013. I needed some info for an article I wrote in 2016 and the 2013 data was the best that they had. According to that report, the city of Amsterdam had 84,500 international workers in 2009 and 104,900 in 2013. So a nearly 20,000 rise. But. that’s “international workers” which does not mean “well-heeled” as the Reuters article states. According to this same report, the number of international knowledge migrants (those are internationals who move here on a highly-skilled migrant visa, the most typical visa for so-called expats) was 24,300 in 2009 and 30,600 in 2013. (A number which had actually declined from 2011 and 2012 numbers.)
The article continues with this quote:
““I am like a visitor in my own neighbourhood,” said Bert Nap, who lives near the centre. “We have lost all our bakers and other shops to tourism-orientated shops,” he added, echoing complaints across Europe’s holiday hotspots.”
Nap is an Amsterdam-based author who appears to have a side-gig as “complainer to the media about living conditions in Amsterdam,” there are multiple articles, dating back to 2016, quoting him going on about the number of tourists in the city. It’s possible that journalist keep circling back to him or keep reusing his quotes. It’s not clear to me what is actually happening with regards to Mr. Nap but his complaint has nothing to do with residents of the city. Residents, regardless of country of birth or income aren’t shopping at “tourism-orientated shops.” Those are for, as you may have guessed, tourists. Its conflating two separate problems: too many expats and too many tourists.
Then we move on to:
“According to Statistics Netherlands (CBS), 40 percent of young couples leave the city within four years of having their first child, driven out by the lack of affordable housing.”
Let me break down for you a very, very basic economic principle. When there is a high demand for something and limited supply, either the price rises or you get shortages.
Housing in the city center of Amsterdam is inelastic. It’s a limited geographic area. There is literally only so many actual meters of space. Further, there isn’t a large amount of unused space where one can just build more houses. So it is challenging to expand the housing stock.
Moreover, the government and society has imposed a lot of restrictions on housing. Regulations prevent builders from using cheap materials or less durable construction methods which might be less expensive. Home buyers demand a certain amount of space. People, it turns out, don’t want to live in shoeboxes. And, no one is proposing we knock down a bunch of the beautiful canal houses and build skyscrapers, which can fit more people into a limited space.
Don’t get me wrong, I don’t think the sane answer is cheaper and less safe building materials, but it does limit your options in terms of expanding housing stock. Expats may contribute to rising house prices, but house prices are up all over the country. Amsterdam is a desirable place to live, for both the Dutch and non-Dutch alike. So, of course it’s expensive.
Furthermore, “couples with young kids moving out of the city center” is more complicated than a lack of affordable housing. They also want things like gardens for those kids to play in and spaces to park cars to put those kids in. Moving out to the suburbs when you have kids is a time honored tradition the world over, not a new phenomenon created by rich foreigners in a single city.
And then the article throws in this gem:
“Resentment also stems from a policy that allows skilled immigrants to receive 30 percent of their income tax-free.
On a salary of 100,000 euros that amounts to 15,000 euros in extra take-home pay for an expat over a Dutch person doing the same job.”
Yes, highly-skilled immigrants do get a tax reduction known as the 30% ruling, namely they don’t pay income tax on the first thirty percent of their earnings. It’s for limited time (now, five years) and for a limited group of people. Further, it’s designed to offset the costs of living abroad. (My Dutch boyfriend wants to see his parents, it’s a 15 euro train ticket. I want to see mine, it’s a 700 euro flight.) But we can quibble about its usefulness another time because the example the article uses is on a salary of 100,000 euros. Which is absurd. Meaning a full 25%, according to an ICAP survey, earn less than 3,000 euros a year. And, contrary to popular belief that most expats have lavish allowances, nearly 80% get no assistance with housing.
According to the Belastingdienst website, the minimum income you must earn to qualify is 37,000 euros. This may seem low, especially to Americans and that’s because salaries here are much lower than in other countries. In fact, according to the Amsterdam Gemeente’s own report, only 8% of international workers in 2013 made more than 75,000 euros a year. 100,000 euros per year is not typical, even in Amsterdam.
“Listings have dried up. As one real estate agent put it, the market has “boiled dry”.”
But according to a white paper by the Rabobank, A new record was reached in the third quarter of 2017 with over 61,000 houses sold. That doesn’t sound dry exactly. Seems pretty lubricated actually.