The Hague nears ban on purchasing low-cost homes as rental properties
The municipality of The Hague has taken another step towards making it impossible for buyers to acquire affordable homes and then rent them out as of March 1. The city’s mayor and aldermen approved the plan to protect the affordable housing market for low- and middle-income households who wish to live in the city. The full city council still has to give its approval, with council members set to debate the issue in January.
A new national law taking effect on January 1 makes it possible for cities to create limitations that block investors from acquiring housing. About 130 municipalities plan to enact such rules. Amsterdam wants to reserve new sales of homes valued below 512,000 euros as only for those who plan to live there. Rotterdam is looking to place a similar limit for homes worth 355,000 euros, and plans are also under consideration in Utrecht.
In The Hague, the purchase protection will apply only to homes with an official WOZ valuation of up to 355,000 euros. If the city council moves forward with the plan, a permit will be required to purchase a property below that limit to then rent it to tenants. The scheme should annually require that approximately 800 home purchases remain as self-occupancy properties.
A third of all houses sold in the major cities, including The Hague, came into the possession of investors last year, according to the municipality. This was as high as 40 percent in some neighborhoods in The Hague. The investors drive up real estate prices, making it virtually impossible for first-time buyers and buyers with a low or middle income to purchase a home. As a result, they either have to pay a high rental price, or they have to move out of the city.
There are a few exceptions built into The Hague’s plan, as in other cities. Family members may still purchase property to immediately rent out to family members. It will also be possible to rent out homes where the owner travels for longer periods of time. Additionally, housing associations will receive an exemption if they purchase a home in order to rent it out on the social housing market.
Reporting by ANP and NL Times.