Project Development: The Challenges in 2026

This article previously appeared in Het Vastgoedjournaal
The real estate investment market is recovering cautiously. Savills reported an investment volume of €3.3 billion in Q1 2026, led by residential and healthcare real estate. CBRE expects further growth in investment volume for 2026. Nevertheless, capital is more selective than before. Projects with uncertain permits, high energy dependency, or weak operational assumptions are facing greater difficulties. Three challenges are dominant: affordability, energy management, and housing densification. In addition, the Dutch government is expected to introduce the necessary policy adjustments.

The central government aims to realize 100,000 homes annually. This requires that two-thirds be affordable and 30 percent social housing. This ratio changes the fundamental attitude of the market. A developer calculating based on maximum sales revenue will run into difficulties in a system where municipalities and provinces have a stronger steering role. The Housing Management and Control Act (Wet krachtsturing openbaarheid van bestuur) is intended to give authorities more options to determine how much, where, and for whom housing is built. For project developers, this means that the discussion about land value starts earlier. The scope to absorb setbacks later with more expensive homes is diminishing. This makes affordability the core of the business case. Developers must be sharper in choosing who they build for and what quality fits financially. Factors such as parking, home size, energy concept, and shared facilities can make or break a project. By 2026, more activity is expected in housing segments with clear societal demand, such as student housing and senior living. This aligns with the broader trend of capital becoming more selective.

Energy management

Energy and permit capacity have become strict development conditions. Grid congestion affects residential construction as well as industrial areas and data centers. In April 2026, Bouwend Nederland warned that approximately 240,000 planned homes by 2035 are at risk because a connection to the power grid might not be available in time. For developers, this is an uncomfortable reality. A location can be promising from a planning perspective and yet stall because the connection is missing. Nitrogen adds to this. According to Bouwend Nederland, 244,000 homes could be affected by nitrogen restrictions. Projects require more legal preparation, cleaner construction logistics, and better substantiation of emissions. Consequently, nitrogen belongs in the initial feasibility analysis. Energy demands the same early attention. Anyone developing a new neighborhood must consider how residents cook, charge, heat, and feed electricity back into the grid without overburdening the local network. This leads to different choices regarding phasing and operation. Batteries, collective heating, and local management of peak load are becoming a more important part of area development.

Densification

Project development is shifting towards the existing city and existing real estate. New construction remains necessary, but space is becoming scarcer and procedures are burdensome. As a result, interest in transformation, adding extra floors, and more intensive use of existing buildings is growing. It is not just about old offices becoming homes; shops, business parks, and social real estate are also being re-evaluated. Platform31 points out that urban densification puts pressure on space for other functions. This makes area development more complex, as housing must compete with workspace, amenities, and the circular economy. With new construction on a vacant plot, much revolves around design and market position. With existing real estate, the work begins with limitations. Construction, ownership, lease agreements, and the surrounding environment determine what is feasible. Financial leeway is often smaller, while technical uncertainty is greater. Nevertheless, there is much potential here. A building that is already standing usually already has a place in the city. Sometimes infrastructure is present. Sometimes public opposition is lower than when building in meadows. The challenge lies in finding a program that fits the existing structure and the surrounding neighborhood.

The Hague

Project developers can expect significant political influence from The Hague in the coming six months. The Public Housing Management Act (Wet krachtsturing publiek openbaarheid van bestuur) is intended to give the national government, provinces, and municipalities more options to steer towards numbers and locations. This makes the principle of two-thirds affordable new construction and 30 percent regional social housing more decisive for area development. At the same time, the cabinet is attempting to accelerate procedures through extra funding for municipalities, strengthening permit granting, and a greater focus on transformation, adding extra floors, and splitting existing properties. There will also be pressure to make industrial and standardized housing construction applicable more quickly. The STOER program aims to eliminate redundant or conflicting regulations and limit local requirements that go beyond statutory requirements. For developers, this can help with lead times and costs, particularly for serial concepts. For mid-market rental housing, measures are expected to make investments more attractive, including an extension of the new construction surcharge. The downside is that plans with a large private sector and limited affordable housing become politically more vulnerable.