Amsterdam city council has decided that 40% of new homes built within the city’s boundaries must fall under social housing rules, meaning the rent can be no more than €710 a month.

A further 40% must target middle income households with rents of around €850 per month or be affordable to middle income home buyers, councillors decided on Wednesday evening. The remaining properties will target high earners.

Currently just 30% of new homes must be social housing and there are no restrictions on the rest. ‘If we leave it to the market, people with a low or moderate income will no longer be able to live in Amsterdam,’ Laurens Ivens, the city’s housing alderman and a member of the Socialist party, said earlier.

The city council hopes the plan will make it possible for more teachers, police officers and other people in professions with moderate pay to make the capital their home.

Research shows that some 80% of new owner-occupier properties within the A10 ring road cost more than €400,000, while rents of €1,500 for a one-bedroom flat have become the norm. House prices in the capital have soared by 20% in the past year.

However, the plan, which was not supported by city coalition partner D66, has been criticised by building companies.

‘Over the past few years, Amsterdam has tried to boost the number of owner-occupied properties,’ Taco van Hoek, of the building sector economic institute EIB told the Parool. ‘To some extent this has helped, but nevertheless, just 30% of the city’s homes are owner occupied, compared with 60% in the country at large.’