Cabinet proposes counting road and sewer costs in land valuation

The cabinet wants the cost of roads, green space and sewerage counted from the start when land for housing is valued. Minister Boekholt-O'Sullivan is proposing the residual land value method (residuele grondwaardemethode), under which public costs are included when the inbrengwaarde (contribution value) of land is set. The rules on which costs municipalities can recover from developers will also be clarified.

The aim is to stop municipal deficits and speed up housebuilding. Municipalities are responsible for roads, sewerage and green space but cannot always recover the full cost, the government says. Speculation on resale pushes up land prices, and talks between municipalities and developers drag on. Housing projects are then delayed, become more expensive or are cancelled.

By including the costs of public facilities in the land's contribution value up front, and making those costs clear, we prevent financial deficits at municipalities. And we give developers clarity in advance.Minister Boekholt-O'Sullivan

The minister says more homes must be built so people looking for a home can be helped sooner. The proposal follows the coalition agreement and a motion by MP Grinwis that parliament adopted.

The method mainly affects future housing projects. A transitional arrangement should keep ongoing projects from being disrupted. The measures will be worked out with municipalities (through the VNG, their association), developers, appraisers and others. The goal, the government says, is to speed up housebuilding without needlessly hindering private investment.