The Transition of Circular Economy in the Dutch Housing Industry

Is circularity becoming the new housing business cycle?

In this paper, we explored whether the circular economy is beginning to reshape the Dutch housing industry as a new business cycle. Construction uses a large share of raw materials, energy and water, while producing substantial waste and emissions. The Netherlands has identified the sector as crucial to reaching a circular economy by 2050, but a national ambition does not automatically show how contractors are changing what they do day to day.

We used Schumpeter’s theory of business cycles to read circularity as a possible disruption of the familiar take–make–dispose model. In this view, innovation can unsettle an existing equilibrium, create new competition and eventually alter how an industry produces value. We looked at pioneering Dutch housing contractors and their strategies to understand where the sector stood in that process.

Forward steps are easier than closing the loop

Our framework linked circular principles to concrete business choices: renewable and recyclable inputs, resource recovery, longer product life, sharing, product-as-a-service models and designing out waste. We also considered the conditions around those choices. A circular product is not enough on its own; supply chains, internal alignment, external collaboration and reverse flows all need to change too.

We found that the sector had moved beyond outright scepticism. Many contractors increasingly saw circularity as a competitive necessity and worried about falling behind. But the transition was still uneven. Businesses were generally further along in forward processes such as material selection, design improvement and efficiency than in the reverse cycles needed to recover components and retain value after use.

One reason is the difficulty of estimating the residual value of a dwelling. Buildings live for a long time, vary enormously and sit in changing markets, regulations and ownership arrangements. Without credible ways to value future components and materials, it is hard to justify investment in recovery models. We therefore see circular economy not as a finished recipe but as an emerging economic logic. The Dutch housing sector is moving in that direction, but it will need new partnerships, business models and ways of valuing the future if circularity is to become structural.