Why inequality does not always lead to segregation: the role of social housing in the Netherlands

Rising economic inequality is widely understood to exacerbate income-based urban segregation. This idea assumes that residential access is largely governed by market mechanisms, through which households are sorted into neighbourhoods according to purchasing power. We argue instead that the spatial expression of inequality depends on how strongly housing systems rely on market-based allocation. This article focuses on social housing in the Netherlands, where residential access is partially insulated from market mechanisms and shaped instead by institutional allocation rules. Using longitudinal microdata for all Dutch municipalities between 2011 and 2024, we examine how the size, spatial distribution and socio-economic composition of the social housing sector condition urban segregation patterns. Our results show that social housing can substantially reduce segregation when it is broadly accessible across income groups and spatially integrated within cities. By contrast, when social housing is both geographically concentrated and socially residualized, segregation is significantly higher. Under the most favourable social-housing configurations, predicted segregation levels are one third lower than under the least favourable ones, even at identical levels of economic inequality. More broadly, these findings indicate that the relationship between inequality and segregation is not automatic, but a contingent outcome shaped by how societies regulate land and housing.