towards

a

circular

housing

market

by

2050

At the same time, there is a second challenge: by 2050, the entire building stock must be circular and Paris Proof. This implies highly energy-efficient buildings, the use of reusable and demountable materials, and a low-emission construction approach. While residential development is already under pressure due to rising costs and delays, there is a real risk that sustainability ambitions will stall in plans without execution.

This is precisely why the new government must approach housing delivery and decarbonisation in an integrated way. By linking these challenges and actively stimulating them, economies of scale can be achieved and a feasible pathway to 2050 can be established.

Renovation as the primary driver

More than 80% of the homes that will exist in 2050 have already been built⁴. The greatest potential therefore lies in refurbishment, conversion and upward extensions. This includes existing residential buildings that can be upgraded and subdivided, as well as the conversion of ground-floor plinths (vacant retail or office space at street level transformed into residential units). Offices, retail assets and social infrastructure also present opportunities for conversion into new residential use. In this way, tens of thousands of additional homes can be delivered while upgrading entire assets in one go.

I therefore call on the new government to:

• Renovation incentive: prioritise projects that add housing through refurbishment or conversion in planning procedures and provide access to a dedicated incentive fund.
• 2030 target: at least 40% of new housing delivery to come from refurbishment and conversion, supported by subsidies and accelerated planning processes.

Smart incentives instead of restrictions

Voluntary action is not sufficient, but additional regulation alone will not deliver results either. Effective policy rewards frontrunners. Positive incentives are more effective than restrictions, as they make investment more attractive and accelerate broad market adoption.

Recommendations to government:

• Reward CO₂ reduction: lower property transfer tax for buildings with low embodied carbon. In addition, consider a reduced VAT rate for circular and bio-based materials, making sustainable choices structurally more attractive across the entire construction value chain.
• Value reuse: introduce subsidies or tax deductions for the use of secondary materials or bio-based construction products. For example, a developer delivering an apartment scheme with 30% reused concrete and timber would receive a tax allowance.
• Stimulate selective deconstruction: subsidise the cost of demolition audits. Such audits identify in advance which materials can be safely and effectively reused. Currently, costs and additional time often form a barrier, leading to bulk demolition. By subsidising audits, reuse becomes standard practice, as developers gain clarity upfront and additional costs are mitigated.
• 2030 target: material reuse to become the norm in at least 50% of demolition and refurbishment projects, supported by fiscal and financial incentives.

Reducing costs through industrialisation

Circular construction does not have to be more expensive, provided scale is achieved. Through prefabrication, modular building systems, standardised detailing and serial production in factories, costs can be significantly reduced. Standardisation reduces failure costs, while industrialisation increases speed and lowers prices.

Recommendations to government:

• Accelerated procedures for circular and modular construction systems: reduced planning and permitting timelines, enabling economies of scale.
• National framework agreements: providing certainty for manufacturers and developers, reducing costs and increasing factory capacity.
• Target: 15–25% cost reduction per dwelling by 2030 compared to current construction practices.

Making value and financing visible

For investors and developers, a robust business case is essential. Circularity becomes attractive once its benefits are reflected in lower operating costs, improved financing conditions and more stable value development. Government can reinforce this by providing financial incentives and ensuring that valuation and financing frameworks align with circular performance.

Recommendations to government:

• National Circular Fund: establish a revolving fund to absorb part of the upfront investment in circular solutions that do not yet fully pay back, with returns flowing back upon sale or refinancing. For example, if a developer opts for more expensive bio-based materials, the fund covers the additional cost until market value increases are demonstrable.
• Interest incentives linked to performance: encourage lenders to offer margin reductions tied to circular indicators such as material reuse, CO₂ reduction and Paris Proof performance.
• Collaboration with the valuation sector: develop guidelines with valuation bodies and regulators to structurally incorporate residual material value, reduced vacancy risk and carbon performance into valuations, and make this standard practice in transactions and financing involving public stakeholders.
• 2030 target: circular performance structurally embedded in valuation and financing, supported by fiscal and banking incentives.

Paris Proof as a phased pathway

Without clear interim targets, 2050 remains too abstract. Defined milestones provide direction and certainty to the market. While several targets for 2030 have been outlined above, the following steps set the trajectory towards 2040 and 2050.

Recommendations to government:

• 2030: all new-build developments to be Paris Proof and circular by design, supported by accelerated procedures.
• 2040: at least 50% of housing delivery to come from refurbishment and conversion, supported by subsidies, fiscal incentives and access to funding.
• 2050: the entire residential stock to be circular and Paris Proof.

Conclusion

The housing challenge and the decarbonisation challenge are two sides of the same coin. Rising construction costs and declining output require a strategy that stimulates rather than restricts. By prioritising refurbishment and conversion, rewarding CO₂ reduction, reducing costs through industrialisation and embedding value in financing, government can ensure that market parties are incentivised to invest in circularity.

Policy consistency is essential. Housing delivery and decarbonisation are long-term processes; any shift in direction costs years and undermines market confidence. Only with predictable frameworks and a stable policy trajectory can the confidence be created that is required to realise long-term investment in a circular, Paris Proof housing market by 2050.

Bronnen

1. Woningproductie 2021–2024 CBS; Ministerie van BZK, Staat van de Volkshuisvesting 2024.
2. Bouwvergunningen nieuwbouwwoningen CBS StatLine, Bouwvergunningen; nieuwbouwwoningen (Q1 2025: 12.755; –37% vs. Q4 2024; –4,8% vs. Q1 2024).
3. Bouwkostenontwikkeling CBS StatLine, Nieuwbouwwoningen; inputprijsindex bouwkosten 2021=100 (stijging ca. 13% sinds 2021).
4. Aandeel bestaande woningen in 2050 CBS; PBL, Wonen in de Toekomst – naar een duurzame woningvoorraad.