The Free Market Ideal
Marktwerking huurprijzen translates to the 'market operation of rent prices,' which is the economic principle that prices should be determined by the free interplay of supply and demand. In the context of the Dutch rental market, this principle is the ideological foundation of the 'free sector' (vrije sector). For any property with a calculated point value above the regulated threshold (liberalisatiegrens) at the start of a tenancy, the landlord is theoretically free to charge whatever price the market will bear. The concept suggests that if a landlord asks too much, the property will remain empty, forcing them to lower the price to a reasonable 'market rate'. Conversely, high demand for a limited supply will naturally drive prices up. Proponents of marktwerking argue that it encourages investment in new housing construction, as developers are attracted by the potential for high returns, which should eventually increase supply and stabilize prices. In this view, government regulation like rent control is an artificial distortion that discourages investment and ultimately worsens the housing shortage.
A Dysfunctional Reality
The glaring problem, as any tenant in the Netherlands can attest, is that the Dutch housing market is not a healthy, functioning market. The supply of housing is critically and chronically low, and it is highly inelastic—it is impossible to build new housing quickly enough to respond to surges in demand. This severe and persistent shortage completely dismantles the theoretical balance of supply and demand. What emerges is not a fair market price, but a 'desperation price'. Landlords are not pricing their properties based on quality, size, or amenities, but on the maximum amount they can extract from a desperate pool of applicants, many of whom are competing with dozens or even hundreds of others for the same property. In this environment, marktwerking is not a mechanism for finding a fair price; it is a justification for unchecked price gouging. The term itself is often used as a political euphemism to defend a system that generates enormous profits for property owners at the expense of tenants, who are left with no bargaining power and are forced to accept exorbitant rents for often mediocre housing. Critics argue that relying on 'market forces' in a basic human need like housing is a fundamental policy failure that leads to social inequality and economic instability for a large segment of the population.
