> Two years ago, Nine Moraal and her two children moved into a one-bedroom flat near the Dutch city of Utrecht, a comfortable spot close to family and friends. Although she had only a two-year lease, she expected to be able to extend it and stay until she could get one of the Netherlands’ many rent-controlled apartments.
> But last spring, her landlord told her she’d have to move out in November, because renting the flat was no longer profitable. Despite “frantic efforts on social media, phone calls, visits to realtors and housing agencies,” the 33-year-old educator says she hasn’t found anything. “The cost isn’t the problem, but a real shortage of housing is.”
> Moraal is among the growing number of Dutch people struggling to find a rental property after a new law designed to make homes more affordable ended up aggravating a housing shortage. Aiming to protect low-income tenants, the government in July imposed rent controls on thousands of homes, introducing a system of rating properties based on factors such as condition, size and energy efficiency. The Affordable Rent Act introduced rent controls on 300,000 units, moving them out of the unregulated market.
> The Netherlands has the highest proportion of rent-controlled homes in Europe, according to the Organization for Economic Cooperation and Development. About a quarter of them are owned by private landlords, with the rest belonging to housing associations that are similar to co-ops. Before the new law came into effect, four-fifths of the country’s 3 million rental properties were subject to controls, and the law raised that to 96%, according to the housing ministry. The measure caps rents on about 2.5 million homes at €880 ($980) a month for households earning less than €52,671. The rest of the properties covered by the law have a maximum rent of €1,158 a month; though they have no specific income requirements, they’re aimed at families with modest salaries.
> To keep up with population growth, the Netherlands needs about 100,000 new dwellings a year, but over the past decade it’s built an average of two-thirds that many. The shortfall has driven up prices for unregulated flats by a third since 2012. With their properties pushed into the regulated market under the new system, many owners are choosing to sell them. “The sad reality is that for home seekers it now has become harder than ever to find a rental property in an already tight market,” says Michiel Vrijman, who runs the Dutch operations of Heimstaden Bostad AB, a Swedish company that owns 13,500 flats across the Netherlands and is in the process of selling about 20% of them.
> Backers of the regulation say it’s a needed response to years of soaring rents and increasing privatization of the housing market. The goal was to protect lower- and middle-income residents from unscrupulous landlords, who had become increasingly predatory, according to Hugo de Jonge, the former housing minister who introduced the legislation. “We have to straighten something out that has grown crooked,” he told a local radio station in June. “That can’t be done without pain.”
> The government, in office since July, has no plans to change the legislation, which had been championed by the previous cabinet. “It’s too early” to amend the measure, Dick Schoof, the new premier, told reporters on Aug. 16. But he said his administration would soon evaluate the law, and “if necessary we will adjust it.”
> ASR Nederland NV, which owns about 15,000 apartments across the country, has called on the government to rethink the measure. Almost its entire portfolio was shifted into the regulated segment on July 1, spurring it to abandon plans to purchase more rental properties, says Jos Baeten, ASR’s chief executive officer. “There are other investment categories that are more appropriate,” he says.
> One provision of the law bars short-term leases, instead requiring all contracts to be open-ended. Some in the industry suggest the change will encourage landlords to prioritize foreigners, who are more likely to move away after a few years, giving owners more flexibility. But even some expats are worried. For the past year, Shahmy Wahabdeen has been renting a house in The Hague for €1,400 a month. After the new rules kicked in, his landlord decided to sell, leaving Wahabdeen scrambling to find new digs for his family of four. “I’m feeling completely hopeless and am seriously considering sending my family back home,” says the 34-year-old software engineer from Sri Lanka. “I don’t know what else to do.”
> For landlords preparing to sell, the market is hot. The median sale price of a home in the Netherlands was €468,000 in the second quarter, up 7.2% from the previous quarter, according to real estate trade group NVM, the biggest jump in almost three decades. But those prices will leave most middle-income families out of the market, according to real estate research firm Calcasa. Buyers today would need to earn at least €95,000 a year—more than double the median income—to afford the average home.
> As dire as prospects may be for middle-income homebuyers, middle-income tenants will be hardest hit by the law, says Jasper de Groot, CEO of property listings website Pararius. While people at the lowest income levels will benefit from the tight rent caps, those a bit higher on the economic ladder are being squeezed into a dramatically smaller private market. “In a year, probably people will take to the streets to complain about this situation, because it’s getting harder and harder to find a rental property,” De Groot says. “The price will increase in the liberalized market because the demand is so high.”
HironTheDisscusser on
Who would have expected that wow, you’re telling me lowering the price below market value caused a shortage???
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!ping YIMBY&BENE
> Two years ago, Nine Moraal and her two children moved into a one-bedroom flat near the Dutch city of Utrecht, a comfortable spot close to family and friends. Although she had only a two-year lease, she expected to be able to extend it and stay until she could get one of the Netherlands’ many rent-controlled apartments.
> But last spring, her landlord told her she’d have to move out in November, because renting the flat was no longer profitable. Despite “frantic efforts on social media, phone calls, visits to realtors and housing agencies,” the 33-year-old educator says she hasn’t found anything. “The cost isn’t the problem, but a real shortage of housing is.”
> Moraal is among the growing number of Dutch people struggling to find a rental property after a new law designed to make homes more affordable ended up aggravating a housing shortage. Aiming to protect low-income tenants, the government in July imposed rent controls on thousands of homes, introducing a system of rating properties based on factors such as condition, size and energy efficiency. The Affordable Rent Act introduced rent controls on 300,000 units, moving them out of the unregulated market.
> The Netherlands has the highest proportion of rent-controlled homes in Europe, according to the Organization for Economic Cooperation and Development. About a quarter of them are owned by private landlords, with the rest belonging to housing associations that are similar to co-ops. Before the new law came into effect, four-fifths of the country’s 3 million rental properties were subject to controls, and the law raised that to 96%, according to the housing ministry. The measure caps rents on about 2.5 million homes at €880 ($980) a month for households earning less than €52,671. The rest of the properties covered by the law have a maximum rent of €1,158 a month; though they have no specific income requirements, they’re aimed at families with modest salaries.
> To keep up with population growth, the Netherlands needs about 100,000 new dwellings a year, but over the past decade it’s built an average of two-thirds that many. The shortfall has driven up prices for unregulated flats by a third since 2012. With their properties pushed into the regulated market under the new system, many owners are choosing to sell them. “The sad reality is that for home seekers it now has become harder than ever to find a rental property in an already tight market,” says Michiel Vrijman, who runs the Dutch operations of Heimstaden Bostad AB, a Swedish company that owns 13,500 flats across the Netherlands and is in the process of selling about 20% of them.
> Backers of the regulation say it’s a needed response to years of soaring rents and increasing privatization of the housing market. The goal was to protect lower- and middle-income residents from unscrupulous landlords, who had become increasingly predatory, according to Hugo de Jonge, the former housing minister who introduced the legislation. “We have to straighten something out that has grown crooked,” he told a local radio station in June. “That can’t be done without pain.”
> The government, in office since July, has no plans to change the legislation, which had been championed by the previous cabinet. “It’s too early” to amend the measure, Dick Schoof, the new premier, told reporters on Aug. 16. But he said his administration would soon evaluate the law, and “if necessary we will adjust it.”
> ASR Nederland NV, which owns about 15,000 apartments across the country, has called on the government to rethink the measure. Almost its entire portfolio was shifted into the regulated segment on July 1, spurring it to abandon plans to purchase more rental properties, says Jos Baeten, ASR’s chief executive officer. “There are other investment categories that are more appropriate,” he says.
> One provision of the law bars short-term leases, instead requiring all contracts to be open-ended. Some in the industry suggest the change will encourage landlords to prioritize foreigners, who are more likely to move away after a few years, giving owners more flexibility. But even some expats are worried. For the past year, Shahmy Wahabdeen has been renting a house in The Hague for €1,400 a month. After the new rules kicked in, his landlord decided to sell, leaving Wahabdeen scrambling to find new digs for his family of four. “I’m feeling completely hopeless and am seriously considering sending my family back home,” says the 34-year-old software engineer from Sri Lanka. “I don’t know what else to do.”
> For landlords preparing to sell, the market is hot. The median sale price of a home in the Netherlands was €468,000 in the second quarter, up 7.2% from the previous quarter, according to real estate trade group NVM, the biggest jump in almost three decades. But those prices will leave most middle-income families out of the market, according to real estate research firm Calcasa. Buyers today would need to earn at least €95,000 a year—more than double the median income—to afford the average home.
> As dire as prospects may be for middle-income homebuyers, middle-income tenants will be hardest hit by the law, says Jasper de Groot, CEO of property listings website Pararius. While people at the lowest income levels will benefit from the tight rent caps, those a bit higher on the economic ladder are being squeezed into a dramatically smaller private market. “In a year, probably people will take to the streets to complain about this situation, because it’s getting harder and harder to find a rental property,” De Groot says. “The price will increase in the liberalized market because the demand is so high.”
Who would have expected that wow, you’re telling me lowering the price below market value caused a shortage???