Amsterdam Housing Truce Opens the Door to Frustrated Investors
Amsterdam authorities are offering some crumbs of comfort to property investors deterred from financing new projects by rent controls brought in two years ago. That may just be enough to tempt them back.
This week the city’s administration gave landlords the right to raise rents for newly built mid-priced homes by more than the inflation rate. Amsterdam banned such practices in 2018 in an effort to tackle runaway living costs.
“Previously, it just wasn’t financially attractive,” said Gertjan van der Baan, chief executive officer of Vesteda Investment Management -- the largest for-profit landlord in the Netherlands. Companies such as Vesteda will now be able to increase rents on new properties by 1% plus inflation for 20 to 25 years.
“It may seem like a small change, but this may make the difference for large investors like us to invest or not,” Van der Baan said in an interview.
Amsterdam is relaxing rent restrictions -- albeit slightly -- at a time when cities from New York to Barcelona are reining in landlords. In Berlin last week, the legislature backed measures including a five-year rent freeze in an effort to cap revenue for property owners. That’s after a property boom caused rents to double over the past decade.
While the Dutch capital has taken less extreme measures against large for-profit landlords, it plans to clamp down on retail investors by stopping individuals from buying properties in order to lease them out. The new proposed buy-to-let rules won’t affect corporate landlords like Vesteda.
Amsterdam has one of Europe’s more tightly regulated property markets, with social housing accounting for at least 40% of all residential properties.
The city, in cooperation with the national government, has agreed to take additional measures to make it easier for low- and middle-income households to gain access to affordable housing. As part of the agreement announced this week, it has pledged to build 10,000 homes over the next five years that will cost renters a maximum of around 1,000 euros ($1,100) a month.
Vesteda owns almost 28,000 apartments in the Netherlands, according to its 2018 annual report. In all, its investment portfolio is valued at about 7 billion euros.
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