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This Country Banned Real Estate Investors and It Turned Out To Be A Bad Idea
Ban On Rental Property Investors Backfires and Leads to Inventory Shortage
Michael Campbell
30 Jul
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Ban On Rental Property Investors Backfires and Leads to Inventory Shortage
A handful of cities throughout the Netherlands - most notably Rotterdam and Amsterdam - have banned investors and buyers alike from leasing homes that were previously owner occupied.
The federal law is called ‘opkoopbescherming’ and it applies to any and all single family residential properties that are valued within a certain price cap.
Lawmakers hoped that the ban would stave off profit hungry investors; which it did. The majority of cities that implemented the ban seen a slight uptick in first-time home buyers.
However, the ban also brought down rental housing supply; ultimately causing rents to drastically increase in the same areas. For instance, Rotterdam saw a 4% spike in rent rates following the ban.
As a result, lower income tenants were effectively squeezed out of some of the neighborhoods and forced to look elsewhere; often times away from the city core, and farther away from employers.
Quick Takeaways
Eliminating Real Estate Investors Does Not Create Added Rental Property Supply (i.e. Solve The Housing Shortage)
Simply Put: Less Rental Property Investors →Less Rental Property Supply → More Competition Amongst Renters → Higher Rent Rates Due to Competition
Investors Are Not the Enemy
Bringing Additional Inventory to Market (i.e. Building More Housing) Is the Only Solution to A Lack of Housing Supply (i.e. The Housing Shortage)
On Another Note
✺ Subleases Are Saving San Francisco Commercial Tenants: The latest data from Savills reveals that San Francisco commercial office subleases are up 140% compared to 2020. — Bisnow
✺ ADU’s are ADDing More Housing to the Rental Market: Accessory Dwelling Units - aka ADU’s - are coming to a backyard near you! California’s seen a 60% surge in issued permits. — The Real Daily
✺ AI Enters the Real Estate Arena: First came ‘iBuying’, now artificial intelligence has crept into the world’s largest asset class (real estate). Showingtime+ is an all new, innovative AI powered listing tool that’s been rolled out exclusively through Zillow. — Zillow Group
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