Overregulation Drives Up Rental Prices in Dutch Cities

New rules meant to protect renters are causing rents to spike.

Rokin in Amsterdam, the Netherlands, November 19, 2019 (Unsplash/Kian Lem)

Regulation is driving up rents in the major cities of the Netherlands — and exacerbating the nation’s record housing shortage.

According to Pararius, a real-estate listings website, average rents have gone up 4 percent in Amsterdam, The Hague and Rotterdam this year.

Rents rose 11 percent in Amsterdam last year.

Pararius’ Jasper de Groot blames the Dutch housing minister, Hugo de Jonge, who is bringing some 330,000 rental apartments into regulation.

De Jonge expands rent control

Currently only properties rented out for €760 per month or less are strictly regulated. Most are owned by nonprofit housing corporations. Renters qualify if they earn less than €44,000 per year, which is slightly above the median wage. Higher-priced rentals are considered “free sector”.

One in three homes in the Netherlands — and 60 percent of rental homes — are rent-controlled. De Jonge would expand the share by raising the ceiling for rent control to €1,100 per month.

Rent increases would be limited to .5 percent above the average salary increase.

Landlords preemptively sell properties

De Groot warns that especially small landlords are preemptively selling properties to avoid being trapped by the new rules:

The number of available free-sector rental homes is drastically decreasing. The demand for rental housing remains high.

Sophie Kraaijeveld, a real-estate banker at ING, agrees:

It is no longer profitable for many owners of rental homes to rent out these properties, so they are putting them up for sale.

Kraaijeveld is seeing rents go up in Utrecht and Eindhoven, the Netherlands’ fourth and fifth largest cities, as well.

Housing prices fall

CBRE, a real-estate services firm, expects that between 50,000 and 100,000 properties now rented out for more than €760 per month will be sold before the end of the year.