Shrinkage and housing inequality: policy responses to population decline and class change

Parkstad Limburg, located in the south of the Netherlands, represents a former industrial area facing structural shrinkage and economic decline in a relatively strongly regulated environment. Though regional policies were initially slow to fully recognize the reality of shrinkage, they are currently well under way. This article identifies to what extent housing policies aim to go beyond managing shrinkage and instead address housing needs of current residents to create equitable social outcomes. We subsequently investigate how specific housing interventions have impacted the region’s changing class composition, using individual-level longitudinal register data from Statistics Netherlands. Our findings highlight increasing socioeconomic and sociospatial inequalities in the wake of shrinkage. Policies have a mixed influence on these dynamics, dampening certain inequalities but amplifying others. Our analyses underscore the limited effectiveness of policies in combating housing mismatch even in a strongly regulated market and indicate key trade-offs for regional governments in managing shrinkage.