The Brussels-Capital Region Government has agreed on a reform of town planning charges that aim to boost the construction of affordable housing in the region.
The move has sparked strong opposition from key stakeholders in the construction and real estate sectors, who worry about the effect on profits and the housing market.
The reform covers compensation for the social cost of projects, including charges imposed on building owners to obtain planning permission. Major projects – such as residential buildings over 1,000 m², offices over 500m², or hotels with over 20 rooms – are affected.
The reform will be vital to increasing social housing in Brussels and addressing the acute housing crisis. A proposed requirement for large developments to allocate 25% of the project for social housing awaits adoption and the reform aims to achieve 15% social housing in each municipality.
Charges for offices may increase in districts with excessive office dominance to transform them into balanced, multifunctional neighbourhoods. The government hopes to adopt these measures before the June 2024 elections.
Eating into profits
Industry voices, including the Brussels Enterprises Commerce and Industry (BECI), the construction federation Embuild, and the Professional Union of the Real Estate Sector (UPSI), have collectively criticised the decision, predicting adverse consequences for the housing market.
They argue that the measures will have the opposite effect, reducing housing supply and pushing property prices up. They point to the 2013 decree in Brussels that determined urban planning charges based on additional square meters per function but did not have an indexation mechanism, as is now in the new decree.
Property developers will now face increased charges that will be used for public housing in municipalities with less than 15% social housing and above-average incomes.
The costs for offices in areas of high office density are also set to rise, with the aim of creating more diverse environments that are not dominated by businesses. Championed by Secretary of State for Urban Planning Ans Persoons, the changes mandate a 25% allocation of social housing in residential projects exceeding 3,500 square meters.
Sector lobbying
BECI, Embuild, and UPSI say that the more stringent conditions lack consideration for the unique characteristics of neighbourhoods or projects and ignore the accessibility of housing in Brussels, both for acquisition and rental purposes.
The organisations express concern that the rental housing market will be significantly affected, denying that they should bear the burden of building new, energy-efficient rental housing.
These three associations are calling on the Brussels government to conduct a thorough impact assessment of the reform, particularly regarding the general taxation of 25% of social housing in major projects.
Industry stakeholders argue that the current situation and future outlook will be further exacerbated by the elimination of tax exemptions for office-to-housing conversions.
