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The parent is arguing against corporate landlords who own 10000 units, albeit a bit ramblingly. Parent's theory is that due to renter protection laws, which ma

The parent is arguing against corporate landlords who own 10000 units, albeit a bit ramblingly. Parent's theory is that due to renter protection laws, which make it hard to evict a renter and raise the rent, large institutional landlords prefer to leave an apartment empty for a couple of years and then rent it out at a lower rent. There is some truth to that theory. The solution should thus be state-funded competition for apartments, driving institutionals out of the low/mid end of the market. This doesn't necessarily mean the state needs to build themselves. There could be proper tax/investment incentive regimes. But designing and managing those is difficult. My theory is that such enterprises managed by political institutions fail because short feedback loops are antithetical to their operation. The policy is set for 3-4 years and then executed no matter what.

mythhabit 3y ago
I believe that there is merit to the theory. If you bought a house 5-7 years ago, the interest and taxes is half of what it cost to rent a smaller house in the same neighbourhood. The high rent is not driven by demand, nor by cost. It's for profit or pretty numbers that mean higher sales value. There is already a form of renting companies that is supported by law, preventing this. They are called "Almenyttig boliger" and is required to be a non-profit company. They are more akin to what americans know as a credit union, just for housing instead of financial activities. About a quarter of all homes are of this kind. Still we have seen investment conglomerates buy large properties and "renovate" them and then raising the rent significantly. I say renovate in quotes, because it's the bare minimum to live up to the law allowing them to raise the rent. The raise is always significantly higher than the value of the renovation, to the point where the politicians had to make new laws trying to get it to stop.
devjab 3y ago
We have some laws that enforce that at least part of a rental complex is meant to be for the general public, but you can legally set the rent higher than the welfare payment people receive when they are out of jobs. The laws are from the 70ies, and they worked well until about the 00’s, but these days they might as well not be there. > institutional landlords prefer to leave an apartment empty for a couple of years and then rent it out at a lower rent. Not exactly. They don’t plan on ever lowering the rent. They’ll even let you live rent free for 3 months if you move into some of the apartments no strings attached. The point is to keep the prospect earnings as high as possible, because that’s what they’re selling to investors. There is more than enough income from other areas to cover for the empty rentals. Ideally you don’t want that, but for some projects it’s even tied directly into the project loans, meaning it would actually be more expensive to rent out apartments at lower rates than having them sit empty. > state-funded competition for apartments The state is too busy selling off it’s real estate and land to make that happen. I don’t necessarily disagree with you, but as long as people keep voting for politicians who are also our investors, well… I wouldn’t hold my breath.

mythhabit 3y ago

I believe that there is merit to the theory. If you bought a house 5-7 years ago, the interest and taxes is half of what it cost to rent a smaller house in the same neighbourhood. The high rent is not driven by demand, nor by cost. It's for profit or pretty numbers that mean higher sales value. There is already a form of renting companies that is supported by law, preventing this. They are called "Almenyttig boliger" and is required to be a non-profit company. They are more akin to what americans know as a credit union, just for housing instead of financial activities. About a quarter of all homes are of this kind. Still we have seen investment conglomerates buy large properties and "renovate" them and then raising the rent significantly. I say renovate in quotes, because it's the bare minimum to live up to the law allowing them to raise the rent. The raise is always significantly higher than the value of the renovation, to the point where the politicians had to make new laws trying to get it to stop.

devjab 3y ago

We have some laws that enforce that at least part of a rental complex is meant to be for the general public, but you can legally set the rent higher than the welfare payment people receive when they are out of jobs. The laws are from the 70ies, and they worked well until about the 00’s, but these days they might as well not be there. > institutional landlords prefer to leave an apartment empty for a couple of years and then rent it out at a lower rent. Not exactly. They don’t plan on ever lowering the rent. They’ll even let you live rent free for 3 months if you move into some of the apartments no strings attached. The point is to keep the prospect earnings as high as possible, because that’s what they’re selling to investors. There is more than enough income from other areas to cover for the empty rentals. Ideally you don’t want that, but for some projects it’s even tied directly into the project loans, meaning it would actually be more expensive to rent out apartments at lower rates than having them sit empty. > state-funded competition for apartments The state is too busy selling off it’s real estate and land to make that happen. I don’t necessarily disagree with you, but as long as people keep voting for politicians who are also our investors, well… I wouldn’t hold my breath.