Amsterdam has significantly increased in popularity during the last decade: most of the inner city neighbourhoods are experiencing gentrification and the population has grown steadily – in 2012 the milestone of 800,000 inhabitants was passed. This success relates to the city’s function as an ‘escalator’: many young people move to the city to study or find work. At a later point in time, they might move out. Partly because housing construction has not kept up with population growth and growing housing market pressures this function is threatened.
Concerns exist that these growing pressures on the housing market disproportionally pose constraints on young households. The in- and through-flow of starters on the housing market has emerged as a growing problem. Furthermore, the structure of the Amsterdam housing market tends to favour other groups: the large social-rented sector is difficult to enter for young households due to long waiting times. Starters also have few opportunities to buy due to high housing prices and – since the crisis – strict mortgage lending criteria. This leaves the private-rented sector, which is both relatively small and expensive.
Research by the University of Amsterdam has studied the position of starters on the Amsterdam housing market. The findings paint a diffuse picture: on the one hand, the number of young households entering the Amsterdam housing market is, somewhat surprisingly, still increasing for starters in various life stages. Apparently, the desire to live in Amsterdam outweighs increasing housing costs. Furthermore, many young households, despite having low incomes, are still able to move to expensive and gentrifying neighbourhoods.
On the other hand, however, sharper inequalities seem to be emerging. More so than for other generations, the rent quotes (the share of income spent on housing) of young households significantly increased. Also, inequalities between starters with different backgrounds are growing. These inequalities clearly have a spatial dimension: for example, in spite of their low income, students and starters with wealthy parents are concentrated in the city’s most popular neighbourhoods such as the gentrified neighbourhoods Jordaan and De Pijp. However, starters with, for example, low-income parents, or ethnic backgrounds are increasingly found outside the ring road in the city’s more affordable neighbourhoods. The research hence suggests that better-off starters increasingly push out other starters.
We interviewed a large number of starters to gain more insight in the way they acquire housing. How is it possible that they move to the ‘best’ neighbourhoods even when they have low incomes? Instead of using financial resources to gain housing through official routes such as housing associations and real-estate agents, many young starter households use their social networks. Also, the high pressures on the housing market make illegal subletting and clandestine behaviour generally accepted. The most successful starters have (and use!) large social networks as well as a thorough knowledge of the city’s housing market. This rearticulates differences between ‘insiders’ and ‘outsiders’.
To conclude, starters may still be able to find housing in Amsterdam, but costs and (inter-generational) inequalities are increasing. To prevent unsustainable and undesirable circumstances, like in London, a range of hard and soft measures are necessary to ensure the in- and through-flow of starters. Next to stimulating the construction of housing, the private rented sector seems to be the key. This sector provides the flexibility starters want. However, the sector is too small and too expensive. Finally, even when starters can afford the rent, overly restrictive regulations – such as very high income requirements – prevent starters from entering the housing market. Addressing these issues is important if Amsterdam wishes to remain accessible for a high-potential young population as well as for less-advantaged starters. These groups’ enduring presence is essential for the city’s escalator function as well as imperative for its socially just character.
Cody Hochstenbach is a PhD candidate at the Centre for Urban Studies, Willem Boterman is a postdocatoral researcher. This blog entry is part of a research commissioned by the Ministry of Interior Affairs (Ministerie van Binnenlandse Zaken) into the position of starter households on the Amsterdam Housing Market. The full report is available in pdf: