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Dutch cities want to ban property investors in all neighborhoods
- finikytou 5y agowhy not banning foreign buyers first. then corporations. homes should be for the people. it should be cheaper to acquire a home u live in than an home u buy to speculate/rent. And the difference should be way higher than a few % tax more
- capableweb 5y agoIt seems there intent is to reduce the number of people who buy property just for investments, and then potentially sit on empty property waiting for opportunities. Banning foreign buyers would just do that, banning foreign buyers, which does not seem to be their intent. Even Dutch people buy property and just sit on it, like what happens in other countries as well. Not sure how focusing on if someone is Dutch or not will help the situation, compared to banning speculative property investment as a whole instead.
- mission_failed 5y agoI'd like to see data on who can afford to sit on an empty property. I've heard of Chinese money trying to avoid Chinese government crackdowns or really rich families who refuse to sell empty houses, I don't see how the average investor could afford it.
- raffraffraff 5y agoAbsentee landlords were notorious for allowing their Irish tenant's properties and amenities decay, while continuing to extracting rent. Yet back at home they were known as philanthropists who gave generously to "their own" poor houses and churches. People tend to care whether or not they are judged poorly, but only by peers and neighbours. It may not make any difference who the investor is, but then again it may. Also, if the investor is resident, could there be other ways to ensure that they are not simply wringing every cent out of their investment with no reinvestment?
- throwaway6734 5y agoWon't this result in higher rent prices for those that don't have the funds or interest in purchasing property?
- ginko 5y ago>it should be cheaper to acquire a home u live in than an home u buy to speculate/rent. And the difference should be way higher than a few % tax more At least in Norway your primary home is exempt from property tax. I guess that's one reason why we have a home ownership rate of over 80%.
- WouterZ 5y agoI've been looking at buying a bigger home than the current one I own. It's near impossible as prices keep on going up. Very disapppinted that cities have to arrange this - it means that some cities won't yet introduce anything. I can already see investors swooping into those markets without the ban... i.e. Haarlem where I live will be among them.
- mytailorisrich 5y agoWe'd need to look at demand versus supply, including new builds before we can point the finger at "investors", which may be convenient but not necessarily useful. Ultimately, market forces are what they are. If demand exceeds supply then some people will always miss out. There is also the problem of the amount of liquidity available. Since 2008 and even more since Covid mountains of cash have been created at zero interest rate and that partly explains assets' price inflation. Let's also not forget that many people cannot afford to buy, and don't want to for whatever reason, so decimating the private letting sector is not great, either, and will only cause rents to skyrocket.
- jlokier 5y agoRents have already skyrocketed while the private residential letting sector is thriving. It's not clear at all that changing the market forces to increase access to ownership by occupiers would lead to increasing rents, even with reduced supply of rentable properties. At the moment, a lot of tenants would rather buy if they could, and are paying the same or more in rent than they would pay on an equivalent mortgage, plus rents are rising faster than a mortgage would if they had one. Rents are also rising faster than their salaries. So they would gain location stability and financial stability by owning, but they can't get a mortgage. Mortgages, like anything in a competitive market, are preferentially offered to the best-looking customers, and property speculators are better-looking than ordinary working folks struggling to make ends meet on their current and rising rent. If those people could buy properties like the ones they are currently renting, rentable supply would go down. But demand would also go down by the same amount, and mostly from those competing to pay the higher end of rents currently. I think this would reduce average asking rents for the remaining tenants.
- dt3ft 5y agoThis is the only right way to deal with greed. Enough is enough.
- snemvalts 5y agoGreed is innate to humans and you can't even take it away with communism, people will still find a way to collect and hoard. The problem is the low interest rates from central banks flooding the economy with money.
- capableweb 5y agoSome greed might be innate, but what we're seeing today with billionaires is not normal greed, it's extreme greed, something me (and many others) don't think is innate. And where does "communism" come from? No one mentioned it here on HN nor in the article. People are so quick to label things, even if they are not even related. In this case, Dutch people seems to had enough of expensive prices so now they are on the lookout for a solution. Just because this solution involves the government stepping in to adjust the market, doesn't mean that the Dutch government is suddenly "communist".
- globular-toast 5y ago> what we're seeing today with billionaires is not normal greed, it's extreme greed No, it's normal greed and, if anything, inequality is lower now than it has been in the past. What we have today is fat, comfortable people looking at billionaires and screaming greed because the billionaire has a yacht while they only have 3 cars and one massive house. Who's the greedy one here?
- mejutoco 5y agoI was looking for data for inequality per country (https://en.m.wikipedia.org/wiki/List_of_countries_by_income_equality https://en.m.wikipedia.org/wiki/List_of_countries_by_income_...). What location and timeline are you thinking of for now being less inequal? Do you have a data source I could look into? Cheers Edit: grammar
- 57844743385 5y agoThe only way to make housing affordable is to end property investing.
- lostlogin 5y agoNew Zealand had a stock market crash in the ’80s which is frequently blamed for the aversion New Zealanders have to shares and the love of property investment. We have a truely terrible housing stock (cold, damp and poorly maintained) and in the largest city, Auckland, the average house price is 20x the average wage. People claim it’s untenable but the rise in values has been utterly relentless.
- tjpnz 5y agoNothing's going to put that cat back in the bag at this rate, short of a capital gains tax. But given 70% of our politicians are property investors themselves that won't ever be on the cards. This whole sorry state of affairs makes me glad I left the country. That and how utterly abysmal IT salaries are.
- arp242 5y agoWhen I lived in Dunedin a few years ago I was truly shocked at the state of the houses. I don't think I've ever seen a house in the Netherlands without central heating; but I've never seen a house with central heating in Dunedin, and Dunedin is quite a bit colder than the Netherlands. Isolation and even double glazing seems almost non-existent and wooden houses are the norm. Don't get me wrong, I really loved living there, and I'd move back in an instant (but work visas are very hard at the moment), but Kiwi houses are the worst and many decades behind Europe.
- throwaway6734 5y agoWhat defines property investing? Why not a land value tax instead?
- kortilla 5y agoHow do you buy a house then? Does the government just own all housing?
- Isinlor 5y agoDo I understand correctly that they want to kick out all the students from the cities? When I was studying in Groningen I had to look for places to rent out of the city. Some students were camping in tents in front of the campus. Here is a photo from another city, Tilburg: https://www.dutchnews.nl/wpcms/wp-content/uploads/2019/09/students-tents.jpg https://www.dutchnews.nl/wpcms/wp-content/uploads/2019/09/st... Some academic staff were even taking them in due to shortage of places to rent. I managed to rent a very nice place in Bedum, a village 13 km from the university campus, and I was commuting every day on bike.
- jhgb 5y ago> Do I understand correctly that they want to kick out all the students from the cities? Presumably not, unless those students are property investors.
- Isinlor 5y ago> investors won't be allowed to buy cheap and medium-priced homes and rent them out So, who will be renting cheap and medium-priced homes? There are already extremely severe shortages as exemplified by students camping in tents.
- jhgb 5y agoPeople living in them? That's how it mostly works elsewhere. Also, it is not customary in the Netherlands for students to live in dorms?
- reillyse 5y agoSo long as homes are considered an asset class governments are compelled to protect their value and help increase that value. This is a small step to decoupling property from investing but I think a great start.
- iamnotwhoiam 5y agoSo investors buy the homes then rent them out? What’s the problem? In some asian markets investors buy homes then sit on them unused for years. That’s a problem.
- azeirah 5y agoIt affects the housing market very negatively. These are houses that could've been bought by families and couples and so on. Instead of being available for purchase, the same people have now have to rent instead of buy. House prices rise, rent increases, common folk are struggling, investors are getting rich without doing anything. It's just meh all over.
- deleted 5y ago[deleted]
- winkelwagen 5y agoIf that means middle income families or starters are not able to buy those houses, and the investors driving the prices up. Then yes, it’s a problem.
- keewee7 5y agoWhy should middle income families be able to buy property in some of the wealthiest and most expensive cities in the world? There is suburbs for that.
- jvvlimme 5y agoThere are more efficient ways to achieve the same and get a bunch of other positive side effects in one go: Land Value Taxation. Henry George proposed it already in 1879 in his book "Progress and Poverty".
- lunarboy 5y agoInterested how this plays out in other countries in terms of both reception and actual effect. The current Korean gov set out to reduce house prices by various methods: e.g. high property taxes on houses that are not the owners primary residence, banning loans/mortage for flipping homes, etc. But prices have gone up more during this regulation. People suspect its actually driving buyers to buy before more regulations in the future. I feel like the only way would be to restrict to one house per co-residence family unit in contested cities. But I have no knowledge of real estate/economics, and I'm sure it'll be called communism. So really feels like a near impossible problem to solve.
- wsc981 5y agoAs others have mentioned the best solution is to just build a massive supply of houses, in order for supply to outstrip demand. This, however, is unlikely to happen in the next 10-15 years. Especially if The Netherlands keeps the current immigration levels up (~400 people per week).
- winkelwagen 5y agoBetter late than never. The housing market in the Netherlands is currently terrible. I’ve “fled” the country for the next few years. Hoping that would be enough time for the market to get healthy again. It’s just insane that we made it this easy for people who were well off to begin with to profit. Just sold a house, the profit I got from buying and selling that house alone makes me nauseous. Makes me wonder why I work at all. Can imagine corporate investors are milking it for all its worth.
- ___luigi 5y agoIs it better in neighboring countries?. There was a discussion [1] about controlled rent market few days ago, it seems that the problem is related to growth. [1] https://www.bbc.com/news/business-58317555 https://www.bbc.com/news/business-58317555
- amelius 5y agoIANAE, but I'm guessing part of the problem is also that housing is not part of inflation (i.e. not in the indexation).
- lotsofpulp 5y agoIt is, but it is mixed in with housing that people do not want, such as due to location, size, quality, etc. The US CPI figures have no resemblance to your expenses if you live in one of the desirable and booming regions of the US.
- amelius 5y agoThe Netherlands (where the article is about) is relatively small, so I'm wondering if the whole country has more or less the same "booming" factor (?) How does housing affect inflation in that country?
- lotsofpulp 5y ago
- cjfd 5y agoThis is cart before horse stuff. As noticed by other commenters some people need to rent. I am blaming 'quantitative easing'. If the central bank buys a whole lot of assets where do other investors go?
- varjag 5y agoI believe the Netherlands used to allow full tax write-off of the mortgage interest (dunno if they still do). That certainly is bound to heat up the market.
- dwightgunning 5y agoThis is still in place for PPOR. Does not apply for investment properties AFAIK.
- hvdijk 5y agoThere are a few other cases where it applies as well, but you're right that it doesn't apply to investment properties. Also, it's no longer always a full write off, it's a write off at a capped rate. Those with low incomes have a full write off, those with high incomes see a more limited effect.
- varjag 5y agoSince most people would like themselves a PPOR that still has the effect of heating up the market.
- the-dude 5y agoNote to self : PPOR means 'Principal Place of Residence' here.
- dogma1138 5y agoThat’s not a full write off and it’s only for a mortgage on a property you reside in. BTW many countries in the EU allow you to write off interest from loans even from credit cards but it didn’t cause an inflation of personal credit line or increased utilization.
- xvector 5y agoDutch cities are easily the best-planned cities in the world. The channel "Not Just Bikes" [1] goes fairly in-depth as to why. I think I'll trust that the Dutch city planners know what they're doing in this instance. [1]: https://youtube.com/c/NotJustBikes https://youtube.com/c/NotJustBikes
- kalium-xyz 5y agoI wonder if things will turn around on this channel now covid lockdowns are stopping. I have never found living in a city center in the Netherlands quiet before the lockdowns, and don't find it very quiet now anymore either.
- dmje 5y agoAmen to this. Two case studies from the UK I've been thinking about recently: 1) Visiting London and spending time in South Kensington - walking back to hotel at night, only about 30% of houses had any lights on. Suggestion is the others are effectively uninhabited, and a search on RightMove shows properties sell for £20-£30m for a 4/5 bed. This isn't normal Londoners, it's outside investment. 2) Cornwall, where I live - an insane house price rise over lockdown as city dwellers aim for the beautiful bits of the country. Literally no way now you could afford your first home round here on minimum wage, and some towns have a high (>50) % holiday or second homes. It's an untenable situation. I think my generation (I'm nearly 50) are probably the last to be able to afford their own home on anything other than a massive wage. Round here in Cornwall the jobs are things like surf instructor, supermarket worker, barperson, etc. That's not gonna stretch to the local house prices.
- anothernewdude 5y agoThose empty homes should be torn down or squatted in. I imagine an organisation like a squatters union could be set up to manage protection for them.
- csomar 5y agoSure. Let's fix a housing crisis by completely breaking up laws, society and order.
- sam_lowry_ 5y agoIt's not uncommon for cities to pas laws that aim at the reduction of unoccupied spaces amid housing crisis. Actually, most European capitals do this either by raising taxes on empty housing or by partially legalizing squatting. Londongrad is an exception to what is otherwise a rule.
- mytailorisrich 5y agoHouses that are vacant for a long period attract higher council tax in London and the whole of England. Of course you may argue that the difference is small in relation to multi-million pounds properties, but that is a more general issue with the council tax's range.
- dmarinus 5y agoThere is also a law in the works called "Prince Bernhards tax", our Prince owns a lot of expensive property in Amsterdam.
- belter 5y ago600 of them ...He says its for his pension. https://www.stolker.nl/portfolio/items/prince-bernhard-jr/ https://www.stolker.nl/portfolio/items/prince-bernhard-jr/
- macawfish 5y agoRefreshing to see this conversation play out while the silicon valley neoliberals are fast asleep. I want this in my city. People in my life are struggling to keep up with housing prices. It's obscene.
- mercy_dude 5y agoThere is a better way - raise the real rate. Cheap loans along with endless printing has basically made fiat useless as a medium to store value, the only reason fiat exists now is as a medium to exchange goods/services. Here the Fed has been buying over 100B of mortgage based securities a month. This got to stop. For all the talks about Wealth inequality, I don’t understand how politicians fail to understand this basic thing. I hope ECB and other central bankers realizes how they are fucking up an entire generation before it’s too late.Negative rates is only going to make things worse.
- mcv 5y agoI don't think it's an issue of inflation. Inflation has been super low for the past decade or more. Everything else is cheap, it's just housing that's expensive. It's a combination of scarcity and speculation leading to more artificial scarcity. Make it less attractive for speculators and build more houses.
- birbs 5y agoInflation is extremely high: https://www.aei.org/carpe-diem/chart-of-the-day-or-century/ https://www.aei.org/carpe-diem/chart-of-the-day-or-century/
- GlennS 5y agoHow do you take "inflation is extremely high" from that chart? 56% over 20 years is 2.25%ish per year.
- mcv 5y agoLooks like inflation has spiked in the last few months in the US, but that's after a long period of fairly low inflation. Compared to the past century, it's not that extreme yet; the 1970s and 1980s had higher inflation[0]. And the high house prices are not something from just the past few months, so it's really not inflation that's causing it. My personal experience is Netherland[1] where the period of low inflation still continues, and house prices have also been shooting up for quite some time. We sold our previous house for 25% more after 8 years, and our current house has increased 25% in value after only 4 years. And even before I bought my first house, I was dismayed at the ridiculous house prices and wanted to wait until the whole thing crashed. (It did crash shortly after we bought our first house in 2008, but even that barely hurt the value of our house.) [0] https://tradingeconomics.com/united-states/inflation-cpi https://tradingeconomics.com/united-states/inflation-cpi (click 'max' to see the full graph) [1] https://tradingeconomics.com/netherlands/inflation-cpi https://tradingeconomics.com/netherlands/inflation-cpi
- nmca 5y agoIn the long term, the ethically right answer seems pretty clearly to me to be a land value tax [0]. But due to encouragement of home ownership [1], that's not going to democratically tenable in a lot of countries for 20+ years. Unfortunate situation. [0] In 1879, a man asked "How come all this new economic development and industrialized technology hasn't eliminated poverty and oppression?" That man was Henry George, his answer came in the form of a book called Progress & Poverty, and this is a review of that book - https://astralcodexten.substack.com/p/your-book-review-progress-and-poverty https://astralcodexten.substack.com/p/your-book-review-progr... [1] https://www.economist.com/leaders/2020/01/16/home-ownership-is-the-wests-biggest-economic-policy-mistake https://www.economist.com/leaders/2020/01/16/home-ownership-...
- saulpw 5y agoHow about a land value tax with an exemption for primary residence?
- lifty 5y agoThis sounds like a reasonable trade off which doesn’t hVe the risk of uprooting people from their primary residence.
- R0b0t1 5y agoI like it too, but it seems to incentivize sprawl. If people attempt to lease land the LVT will be passed to their tenants. To avoid paying the LVT, tenants will look for new construction.
- lotsofpulp 5y agoHigher fossil fuel taxes would counter the sprawl incentive.
- nextaccountic 5y agoIsn't this a good thing? The more constructions, the more housing.
- ChrisLomont 5y agoSo they want to make renting impossible? That surely won't help low income people.
- lifty 5y agoThe Dutch system caters for that through the social housing system. There are special companies that get permits to own houses and rent them at cheap prices for disadvantaged groups.
- ehou 5y agoIn theory you are right. In practice this part of the system is having problems too: - people who used to move on to a larger house stay because of the increased costs - older houses are broken down and are replaced by newer ones … but due to building regulations fewer are build at the same place - due to stagnation in outflow and decreased number of houses the waiting time for getting a “social house” is increased by a ridiculous amount. In Eindhoven it is more than 10 years - in theory. But due to rules about preferred placement it’s often way more.
- ChrisLomont 5y agoAh, so a government monopoly on a common part of markets. Usually such action has downsides, in the same way rent controls end up hurting renters.
- supperburg 5y agoI can’t read a clickbait article. It reminds me of when some Swiss people wanted to use their power of direct democracy to put a cap on CEO pay. The Swiss were smart enough to vote it down. If every country had such a system, the world would quickly burst into flames. And here we have some Dutch people who want to nationalize housing development. Because without private investors, there will be nobody else besides the government to develop housing. The dutch and their government are exceptional enough to make it work I would imagine. But a lesser government would quickly turn nationalized housing into a disaster. These people are angry at housing prices. Just wait a while longer and the housing investors will all be experiencing something much more painful than a government buyout and your houses will be quite affordable. That the beauty of a free market.
- reacharavindh 5y agoI may be biased because I moved recently to the Netherlands and looking to buy our first home and stop paying rent. But, the house prices are crazy out here. I work in tech and my wife is an academic. We earn what is definitely above market average, and it looks like we cannot afford most houses we find in the area where we are renting now(well outside Amsterdam). At this juncture, at least temporarily, investors who are looking to buy up properties and make money out of it need to be stopped by regulations. This is for the greater good. Investors can always find other avenues to invest. But, people need reasonable housing prices.
- akudha 5y agoThis is becoming a problem in farmlands too. Young farmers are unable to buy farmlands, they are forced to lease from huge landowners. It is zero risk investment for these big landowners. Farmers do all the work, put in all the investment like tools (except the land) - landowners simply collect rent. Some of these people own hundreds of thousands of acres (Bill Gates, for example). This is an ugly situation. This is not sustainable. At some point, we'd have a few hundred super wealthy people/corporations owning much of the desirable land and property. Everyone else would become just a peasant/tenant living in tiny apartments working all our lives just so we can have a tiny roof over our heads. This isn't hyperbole - one look at BlackRock should give us an idea in the direction this problem is going.
- Aeolun 5y agoOh, I know! We can give them the land for free, but instead we get to collect a tax on their produce. Of course they cannot leave this arrangement without immediately paying for all the land. I think we can call these people serfs.
- cutler 5y agoThe same applies to the whole rented sector. We're all serfs.
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- timwaagh 5y agoI'm very unhappy about this. It won't be possible to buy a reasonable retirement income anymore and all the profits of the property sector will flow toward those deep pocketed property firms who have the right political connections to get permits. I think the governments just want to work us till we either reach a much extended retirement age or die from depression (which you can be euthanized for here). I'll be fighting to get a second property in the coming months to rent out.
- belter 5y agoIf you are buying to rent in the Dutch market, and you are not part of the royal family, or a Black Rock fund you are making a big mistake. You are in a legal environment where you will not be able to evict a non paying tenant for several years. If there are children in the picture or a divorce you will have even more serious problems. The Belastingen will come after your earnings plus, you are likely to be victim of a legal environment biased to puritanical inspired laws, that try to hit back at anybody trying to get ahead of their neighbors in the same street. In other words, there are strong forces to make you get back to conformity, on what is a very homogeneous society. You will be taking on a huge amount of risk that normally only professional well funded investors are able to weather.
- TacticalMalice 5y agoEviction is already possible after 3 months of not paying rents (and sometimes after 2 months if there's a history of non-payment). The landlord has to get a court order, which is commonly granted. Minors will be placed in foster care if they cannot be placed elsewhere. Taxes on earnings depend on how you structure your work. They are usually in "box 3" where taxes are based on fictitious returns on investment as a percentage of total wealth and (fictitious) asset class. That said, law-makers are a significant source of uncertainty and risk.
- belter 5y agoWell not at the moment to start with: "Government rules that tenants cannot be evicted during corona crisis" https://www.iamexpat.nl/housing/real-estate-news/government-rules-tenants-cannot-be-evicted-during-corona-crisis https://www.iamexpat.nl/housing/real-estate-news/government-... Also tenants can sign contract with you ( as landlord) and immediately go to the Huur Commissie and argue their rent is too high. So it will be lowered if they first signed a different contract with the landlord. https://www.huurcommissie.nl/ https://www.huurcommissie.nl/ Concerning what you seem to describe as a very smooth process I have strong doubts. If a tenant lawyer argues there is a temporary situation with the family, children take priority etc...A Dutch judge will not ignore all that, and simply take the major step of putting children under foster care, if the landlord does not need the house to live there himself. Specially taking into account the dire situation of foster care in the Netherlands: "The decline in foster parents means that the Netherlands is facing a shortage. According to Foster Care Netherlands, 3,500 foster families are needed each year. Last year there were only 2,566. Currently over 700 children are waiting for a place in a family..." https://nltimes.nl/2020/01/09/many-foster-parents-quit-lack-support-report https://nltimes.nl/2020/01/09/many-foster-parents-quit-lack-... I know a landlord who waited 2 years. Just a data point I would agree, but I strongly doubt its the smooth process you describe.
- debarshri 5y agoThis move is well appreciated. Currently, I own a house in oudegracht, Utrecht. It is very terrible situation here. All the apartments in and around me are all the time rented out as airbnb. During peak of pandemic, it was pretty much a ghost town. The housing prices have skyrocketed due to covid, but all these all-cash investor are jumping and swooping in the apartments, holding it for a while and passing it to the next person. Some of the people, even have to pay around 50k euros over the asking price to buy it. Because of the rising prices, the annual property tax to be paid also increases dramatically. People blame the low interest rate, but based on what I am seeing and heard from other people, it is investors all over the globe investing in properties in Amsterdam, Utrecht, Rotterdam etc.
- chii 5y ago> People blame the low interest rate it is the interest rate - because the price of property is related to the cost of money (aka, interest rate). Investors are merely looking for returns, with as low risk as possible. When property is priced low compared to the rate, you must expect this to happen.
- imtringued 5y ago>it is the interest rate - because the price of property is related to the cost of money (aka, interest rate). You can manufacture more cars and houses as you get more money. It clearly is related to the fact that land yields a risk free return regardless of what you use to price it. In that sense money and land is an NRA. A non reproducible asset. Low interest rates break the NRA property of money which is perfectly ok if inflation is also low. Rather than holding onto money unproductively they simply switch to holding land unproductively. The solution is to introduce a holding fee onto land.
- IkmoIkmo 5y ago> All the apartments in and around me are all the time rented out as airbnb. During peak of pandemic, it was pretty much a ghost town. What you mention around Airbnb shouldn't be addressed through a buy-to-let ban, but an airbnb or short-term rental ban, which already exists in various forms. If there's problems with enforcement, address that. The ghost-town you described happened regardless of airbnb but due to literal lockdown measures that affected everyone, in particular the local population, you don't see the effect anymore despite tourists still largely staying away. > Because of the rising prices, the annual property tax to be paid also increases dramatically. No that's not correct. Typically Dutch municipalities tax based on what they need. If they need 1 million, they'd charge 1% of 100 in property values, or 2% of 50 million in property values. Price increases don't translate into higher property taxes. You can see a video of how Utrecht does it, on their own website: https://bghu.nl/belasting/ozb https://bghu.nl/belasting/ozb In fact, in Utrecht property tax rates decreased by about 22% in the past 6 years, due to increasing home prices. Of course there is inflation, in absolute terms the number is increasing. But what you're describing isn't happening. I own a home in Utrecht, too. Many studies in the Netherlands have shown investors aren't the cause of the price increases, I don't think this policy will solve things. It'll just relieve some pressure on the buying market and put extra pressure on the rental market. > People blame the low interest rate Yes, these people are economists, including the Dutch Central Bank, the AFM, every bank, every professor, in countless studies. The effect is clear and obvious.
- reacharavindh 5y agoPerhaps relevant to this discussion. Another article on the same website from 7 days ago. https://nltimes.nl/2021/08/29/us-investor-blackstone-accused-keeping-hundreds-amsterdam-apartments-vacant https://nltimes.nl/2021/08/29/us-investor-blackstone-accused... Cant help but think, may be this is some form of insider trading by the wealthy - buy up apartments before such a regulation comes into place?
- Ekaros 5y agoI think real solution is to increase governmental supply. That is push market rates so much down that only marginal gains from property could be gained. Let's say 2% year... Property shouldn't really appreciate very much over time.
- tellersid 5y agoIn the US at least though I believe zoning is the issue. Our zoning laws are so bad and it is so hard to add to supply that no one really bothers much. There are all kinds of dislocations in the market because what you should see right now is massive amounts of home building but you do not. 15 minutes away from me there is a ton of open land that could practically be built into a entire new town. I would imagine the larger the project the more bullshit you have to deal with when it comes to permits, zoning, political pushback, palms that need grease. If you compare the work, risk/reward to alternative investments like just holding the stock market index it becomes a bad investment so it doesn't get made. We have all these self reinforcing distortions happening in the market that probably can't be fixed.
- zihotki 5y agoTo add to the topic, in NL you, as an owner of a property, are obliged to report to municipality if your property is vacant for one year. This is to prevent squatting. Very recently U.S. investor Blackstone reported ~300 apartments at once in Amsterdam for being vacant. They did it only after it was found out that some of the properties were squatted. And according to different sources, the apartments were vacant for very long time, more than a year. On top of that, the investors often buy social housing. After some refurbrishment they start renting it as a non-social one. Many people are upset by this behavior as well.
- Aeolun 5y agoI think it’s interesting that we tend to believe that someone would actually report these things. Then we get hit by these US (and other) foreign companies to whom morality is just a suggestion, and whom will happily do whatever makes them most money. Now they’ve made literal millions out of these empty properties, and they’ll be given the benefit of the doubt, because that’s how we do things.
- seanieb 5y agoReal estate investors buying existing properties, without substantial capital investment into upgrades/renovations, are exactly the same as concert ticket scalpers. Their business is of little benefit to society.
- Ekaros 5y agoInvestors buying existing private properties and not replacing them with higher density housing is something I could support ban of. Ofc, there should be some limitations on pricing of new units offered.
- DonHopkins 5y agoThere's a history of violent protests and riots about housing in Amsterdam, and a slogan "Geen woning, geen kroning" (No house, no coronation): https://en.wikipedia.org/wiki/Amsterdam_coronation_riots https://en.wikipedia.org/wiki/Amsterdam_coronation_riots >Amsterdam coronation riots >The Amsterdam coronation riots (Dutch: Kroningsoproer) refers to major violence and rioting in Amsterdam, the Netherlands on the day of the accession of Queen Beatrix, 30 April 1980. It was one of the biggest episodes of such disturbances in the country since the end of World War II and the most significant event of the Dutch squatters' movement (Krakersrellen). >Since the 1960s and the 1970s, squatting had become common in Amsterdam to protest the city's shortage of housing. Many of the protesters were youngsters of the baby boomer generation. The 1980 riots were precended by the Nieuwmarkt Riots in 1975 and the Vondelstraat Riots in March 1980, when authorities heavily responded to evict squatters from properties in the city.
- rocqua 5y agoThis is stupid. It bans buying or renting. Our rental market is already very distorted because most rentals fall under regulations except for people just above modal incomes. That already leaves a gap for people not poor enough to be allowed regulated rent, and too poor to get an 700 a month mortgage, who are forced to rent at 900 a month. If you want to hurt pure investors, tax un-lived in housing. But really, we need to kill the mortgage tax credit for any new homes. That will reduce the value of land because it offers less tax benefits. At the same time, currently interest is low so it will barely effect new entrants. The key is to make houses worth a bit less. Homeowners are just going to have to suffer a slight dip after amazing gains for the last decades.
- morpheos137 5y agoThe spirit of the idea makes sense but maybe not the implementation. Homes should be occupied. I don't think a ban is necessarily the right approach. Have a high vacancy tax. The way houses have been turned into a speculatively appreciating asset in much the world is absurd.
- sega_sai 5y agoI think I mostly agree with this idea, but while removing pure investors from the market may offer some (or significant) help, however it still does not solve the mismatch between supply and demand. I think the removal of investors will lower the demand, but I think the mismatch will still exist in many places. And proposing solutions for that is essential, i.e. either building more or making it easier to work remotely etc.
- rusteh1 5y agoI don't understand how this would work. How do people rent? Obviously many people can't or do not wish to own their house for any number of reasons. Who will own houses that are rented? I used to live in Amsterdam as an expat, and rented from a landlord who owned several homes in Amsterdam. Would she not be able to own and rent these homes under this scheme? The social housing system seemed to be abused when I was there. I had a number of Dutch friends still living in social housing places they'd rented as students on very low incomes, and were still renting 10 years later. For the same 300 euro per month, when they were now earning 6-7000 euro/month. I could never understand why this wasn't means tested continually.
- 734129837261 5y agoDesignations. That's how. Some houses are built and intended to be rented out to people. These houses are constructed entirely by companies (or people) for that purpose alone. Other houses are meant to be for purchase, and purchase only. If you purchase a house like this and then rent it out, that should be considered breaking the intended designation. So if you as an individual want to own multiple houses to rent out, you need to find houses with that designation and that are for sale. Alternatively, you need to find ground with the "rental housing"-designation and build a house or multiple houses on there. You can do this in a collective of individuals, too. And people who currently own multiple houses that were not meant to be rented out (but are rented out to other people) would need, by law, to either sell those properties (the current renter should get the first option on the house's current market value price). And honestly, I feel that the people renting houses that were never meant for rental should get a discount. And that discount should come out of the pockets of the government. And yes, I'm a Dutch citizen. I know that means my tax money is going to help these people buy their houses a little cheaper at my expense. I'm fine with that as it would create a healthier housing market for everyone. That's exactly what my tax money is for.
- rusteh1 5y agoThanks. What if I purchase a home, to live in. Then I take a job overseas and move for 2-3 years. Must I sell the house rather than rent it out on a short term basis?
- Griffinsauce 5y agoThis is really necessary. I'm a senior engineer, my wife is a neurologist, we are currently not able to afford a pretty normal house in the city. Even if we did, buying now is a enormous waste of money. The market has been bad for years and it's absolutely out of control now.
- chrisseaton 5y ago> I'm a senior engineer, my wife is a neurologist, we are currently not able to afford a pretty normal house in the city. I don’t understand why people think having a certain job means it’s more of a travesty that they can’t get a house. Everyone should be able to get a house. Whatever your jobs are is irrelevant.
- arp242 5y agoOf course, but I think the point the previous poster was making that even with well-paid jobs well above the average it's very hard to find something reasonable that fits in your budget, which underscores the point that for people at the average it's damn near impossible.
- Freak_NL 5y agoThis is desperately needed. And not just in the major cities; this is happening in every Dutch town. Amsterdam may have prices beyond absurd, but the whole nation is burdened by this problem. In the street I live in the capital of the northern province of Fryslân (Frisia) most homes are owned by their inhabitants, but in the past few years we've seen several houses being bought by small-time investors (who already own their own home of course, are financially well on their way, and are looking for ways to save their saving from low interest rates and inflation), who charge renters four times what my fellow homeowners and I pay for mortgage. You never get to know the renters, because they are really only here for as long as nothing better comes along (like buying a house or social housing), and who can blame them? Meanwhile maintenance of these houses is minimal, because the market won't really reward proper upkeep at this point; they can always sell the house for an insane price tomorrow. It's really upsetting to see my younger colleagues stuck renting a flat, while I own my house having even paid of the vast majority of the mortgage simply because I had the luck of buying it in 2013 (a major dip in the market where paying less than the listed price was common). For the good of society we need to put a stop to this type of speculation on the housing market.
- beckman466 5y ago> In the street I live in the capital of the northern province of Fryslân (Frisia) most homes are owned by their inhabitants, but in the past few years we've seen several houses being bought by small-time investors (who already own their own home of course, are financially well on their way, and are looking for ways to save their saving from low interest rates and inflation), who charge renters four times what my fellow homeowners and I pay for mortgage. specifically the last part: > small-time investors who charge renters four times what my fellow homeowners and I pay for mortgage But what about maintenance costs though? Those costs are very high, definitely 4x the cost of the mortgage! /s
- joelbluminator 5y agoWhen I was living in NL I knew a guy who had a mortgage for a house in Australia, a mortgage on a house in Groningen and then he was looking to get another mortgage for a house in Den Haag. Banks don't seem to cooperate internationally or even nationally; he never told the banks he has mortgages already.
- gbajson 5y agoGovernments are printing money, inflation is eating savings. Properties are safe and easy way to protect money. When buying properties will be banned, what would you recommend as an alternative?
- bamboozled 5y agoWish they'd do this in the town I'm residing, so many houses are vacant, it's really hard to find something to buy, its very annoying.
- avsteele 5y agoWhat's the deal with landlord hate? If I buy a lawnmower, pool, or whatever else and rent it out you all are ok with that. If I buy a house and rent it out suddenly I'm an "enemy of the people".
- logicchains 5y agoMost leftists are driven by envy; they see someone else has something they can't afford, and they feel rage. They can't afford multiple houses, so seeing people with multiple houses triggers this feeling. Fundamentally it's because they're so ego-driven they can't accept the market rewards people fairly, because doing so would require accepting that someone else deserves those houses more than they do.
- imtringued 5y agoI want to become a landlords and I do not want to think about the moral implications of rent seeking. If the government simply taxed the unfair gains I received through rent seeking then I would have no moral qualms about other landlords. I would be very happy to pay land value taxes if that is what it takes to make free market capitalism fair again. I do not envy Jeff Bezoz for owning $200 billion in stocks. I do not envy Bill Gates for owning Microsoft. I consider Bill Gates accumulating farmland without paying a tax to compensate for his monopoly rights to be a form of extortion that should not be allowed. >Most leftists are driven by envy; they see someone else has something they can't afford, and they feel rage. I don't. > They can't afford multiple houses, so seeing people with multiple houses triggers this feeling. I am always in favor of a land value tax that taxes home owners and large scale investors at the same rate. The reason why I have to make a concession to primary residences is that home owners would vote against the tax and the land value tax wouldn't be introduced at all. >Fundamentally it's because they're so ego-driven they can't accept the market rewards people fairly, How can abusing the monopoly of location be considered a fair reward? You are distorting the market. > because doing so would require accepting that someone else deserves those houses more than they do. No, it's the opposite. You can buy the land 30 years ago and let the property on top sit vacant and still net a return because the value of the land has risen. Such an investor made a lot of money without deserving the land at all. If land had a holding fee then only those who can extract the most value out of the land would seek it out.
- nabla9 5y agoInstead of banning, it's better to steer with taxation. Tax on empty houses (no permanent address) changes incentives.
- chimen 5y agoGood. I went to Prague recently (after 10 years) to discover that the entire city centre with all of it's businesses is now owned by chinese people. A 500ml water costs 10 euros and everything seems different, designed to just milk the cash from tourists. Had a much better experience 10+ years ago and made quite a few local friends.
- alexbiet 5y agoThe intervention is late, yet much needed. It's time to create some rules for the greedy bankers too, they have been inflating the housing bubble with massive amounts cheap debt for far too long. Can't find a decent property for under €500K on the Dutch market. And bear in mind not everyone has Tech salaries; you have teachers, nurses, drivers, etc. on ~ €20K - €25K per annum before taxes. They would be homeless without social housing or homes passed on through generations. Dutch properties listed for €350K-€400k are sold for +€50K to +€100K OVER the asking price. To complete the property sale prepare to put another €15K-€20K on the table for various fees, taxes and middlemen. Unless you are a millionaire or be willing to go deep into debt for 30 years and obliterate most of your savings, sadly you have no chance at purchasing a home in the Netherlands. A home is a basic human utility (shelter), not a pump and dump investment scheme. Making standard homes so expensive that most people cannot afford is completely wrong and goes against society. Property investors have many other options such as investing in new property development, hotels for students, the stock market, new businesses, Bitcoin, etc. Heck, it's time to diversify.
- FridayoLeary 5y agoIf the price of properties fall dramatically won't that have an adverse affect on property owners? Imagine shelling out £1M on a house, and spending 20 years paying it off. Now, at the end of that time period the house is worth half of that. I'm not an expert but is closing off an entire section of Capitalism going to work flawlessly?
- ChuckNorris89 5y agoAnd what's wrong with that? You still own the house in full and can live in it till you die whether it's worth $1MM or $1. There should be no guarantee for your house to appreciate over time; that's what got us in this mess in the first place. If you want to turn your housing into an invested vehicle to sell an make you rich then you're basically gambling and should fully accept the risks of losing money in the process like with any other investment. Capitalism also means letting bad business or poor investments go bust, not prop them up artificially for decades via low interest rates, zoning laws and nimbyism to make them worth more.
- ianai 5y agoI’m reminded of behavioral studies showing that other primates have an instinctive concept of “fair” and will choose against cooperation if a deal seems unfair to them. I think this was covered in Freakonomics. How about making a civil law where anybody can sue the owner of a home if it’s not occupied in a way that benefits the community around the home - say with a $10,000 plus court fees and 10% of any residual income minimum for anyone in the community who sues and wins?
- logicchains 5y agoThen do other citizens have the right to sue the passer of this law for the resulting shortage of rental properties that this incentivises?
- ralfn 5y agoI'm slightly annoyed with all the UK examples. This is about the Netherlands. The Dutch housing bubble consists of 4 factors: - interest rate on mortgages has been tax deductible - new developments are limited due to environmental considerations - it's the safest "on the books" wealth storage in all of Europe (it has been a good investment since the 16th century) - the Netherlands outclasses it's direct neighbours in quality of life and urbanisation. It's #1 best location in the world to raise children. This leads to many many people wanting to move to the Netherlands. They are not coming for the jobs or our great personalities (sarcasm) they come for the nice living conditions, the great bicycle and public transit infrastructure. The great roads. The good education. The livability of our towns and cities. And we can't really scale it up further. It's all of the country already. You can be in the middle of nowhere in Frisia and jump on a lightrail or see a proper safe bike detour due to some new construction. From small suburbia to big inner cities. We really need Germany, Belgium and Denmark to step their game up. Release some of the pressure. (PS. Denmark is actually stepping up and will get there soon)
- einpoklum 5y agoTitle is inaccurate. It should read: > Dutch cities want to ban property investors from buying some kinds of apartments in some or all neighborhoods I'm all for this. However, it is insufficient, because small-scale property investors may not be considered as such, but as buying an apartment for a family member or a friend etc. Or they will just "lend" money to someone to buy the apartment. Generally, the situation in which individuals have full ownership of apartments or houses other than those they live in is problematic.
- nathanvanfleet 5y agoI have thought about San Francisco. It really does feel like this whole city is empty. No stores stay in business, no one seems to be walking around these neighborhoods. I have considered if you can fly around with a plane at night and use something like heat vision to determine who is home?Because I think the stats are just not correct for SF
- ModernMech 5y agoSan Francisco has enough empty homes to house every homeless person in SF many times over. And there are a lot of homeless in SF, so that's saying something.
- logicchains 5y agoAnd at the rate a certain subset of homeless destroy property, in a couple years none of those empty homes would be liveable.
- sidlls 5y agoThat's a rather extreme response. I don't know what the markets are like in the Netherlands, but I can't imagine the dynamics are much different from other regions where this sort of issue exists. That is, it's a combination of NIMBYism or other supply restricting phenomena and a surplus of investors from outside these communities with the means to take advantage. In my area on the Peninsula in the bay area, many years easily 25% of the available real estate stock is purchased by foreign investors. Forbidding all investors (local or foreign) from buying real estate to lease isn't going to solve the bigger problem: a lack of supply. It may help lower home prices into a range of affordability for locals (investors and primary residence seekers) substantially--which could be a good thing.
- Flatcircle 5y agoThey need to do this in most big cities TBH
- BurningFrog 5y agoThis is a common policy across the world. It is based on flawed reasoning, and won't work. Simply put, housing isn't getting more expensive because investors are buying houses. The causation is the opposite: Investors are buying housing because its value is consistently going up, making it a good investment. So why are prices going up? Prices are formed by the forces of supply and demand. In the regions I know about, housing supply is severely limited by regulations/laws that makes building new housing hard.
- imtringued 5y ago>Prices are formed by the forces of supply and demand. Technically the problem is that the supply is permanently fixed. There is no force on the supply side.
- FpUser 5y agoPlease, please make the same thing happen across Canada
- option 5y agowhy ban? why not tax more and/or restrict it to, say 10% of all properties?
- acd 5y agoI think beside limiting property investors, curbing central bank zero interest rates will make housing more affordable. Why? Zero interest rates drives up all asset prizes including housing. Buyers buy housing that they can afford to pay the monthly mortgage on. Zero interest rates by central banks undermines the UN article 17 human right to own property, instead you rent from banks. I argue that there wouldn't be so many property speculators if the interest rate weren't set artificially close to zero by central banks purchasing bonds. UN human right of right to own property "Article 17 Everyone has the right to own property alone as well as in association with others."
- smashah 5y agoOne day an intergalactic 5th dimension demon investor will buy earth and rent it back to us for 1 Billion souls per year. What madness.
- tmnvix 5y agoThe issue of housing affordability comes up a lot on HN and the discussion often turns to a shortage of supply. Often overlooked is the demand side of the supply and demand equation. From my perspective (mostly familiar with the NZ/AU markets), this is where the real problem lies. Statistics New Zealand have collected data on the total number of private residences and the total number of households since the mid-90s. The difference between the two has almost doubled to around 7.5% nationally. There are substantially more empty or under-utilised residences in a time where every politician is telling us that building more houses will fix the problem. It won't. At best it will alleviate the problem. Prosper Australia's Speculative Vacancies Report [0] (looking at water usage to determine under-utilised properties) suggests areas with high vacancy rates in Melbourne correlate with areas where capital gains (i.e. percentage price increases) are greatest. This is the opposite of what you would intuitively expect in a naive supply and demand equation - desirable areas have higher vacancy rates, even approaching 20% by their reckoning. A study in the UK [1] using council data found that high property prices correlate strongly with what the study refers to as 'low use properties' (LUPs). I wouldn't be at all surprised if the situation is the same in the Netherlands. All of this suggests that demand for investment, not demand for housing is driving prices up. Zoning restrictions and other regulations do play a part, but I think in many cases their influence on the larger picture is overstated. Cheap loans, leverage, and favourable taxes make property a good investment. The only solution is to make property investment less attractive. A land value tax - though politically difficult - seems to me to be a good option. [0] https://www.prosper.org.au/wp-content/uploads/2019/04/Speculative-Vacancies-9.pdf https://www.prosper.org.au/wp-content/uploads/2019/04/Specul... [1] https://theodi.org/event/friday-lunchtime-lecture-empty-homes-and-house-prices-is-there-a-relationship/ https://theodi.org/event/friday-lunchtime-lecture-empty-home...
- closeparen 5y agoWhat exactly does it mean that investors are driving up prices? As far as I know an investor gets two things by owning a house: a stream of future rent payments, and an appreciating asset. We can easily calculate the present value of the future rent payments. It would be a weird and obviously temporary condition if homes were selling for less than this. A market in disequilibrium. Is that the theory here? The healthier housing market we had in the past was homes priced at less than the NPV of their rents? Maybe the investors are simply irrational and are overpaying for these properties? Hoping for greater fools? This seems like great news. Everyone who owns a property should sell it to one of these exuberant investors, enjoy the hefty profit, and rent (perhaps from the same person, without even moving house) while waiting for the crash. If this is our contention then rents are reasonable and people who simply want to be housed should just pay them. Or maybe the market has always been in equilibrium and the investors have always been rational, but now the NPV is rising. It could do this for two reasons: the rents going up, or the discount rates going down. It seems plausible that both of those things are happening. The unstoppable force of urbanization meets the immovable object of NIMBYism; urban rents rise. Low interest rates reduce the discount rate. Although stock market returns have been incredible, so I'm less sure about this part. In any case, maybe what we're looking at is new, higher NPVs and we're hoping to keep the housing market in disequilibrium to prevent prices from catching up to that NPV? I guess the final paragraph seems the most likely. And, well, good luck. When there's a systematically under-priced asset, people are going to find a way, rules or not. It would seem a lot more effective and sustainable to address the drivers of the rising fundamental value.
- xtat 5y agoMore like this please
- xtat 5y agoTax investment properties at 5x the rate of dwellings.