Affordable rent act will make 60% of big city rentals unprofitable, landlords say

The Affordable Rent Act will make over 60 percent of rental properties in the four large cities unprofitable, according to the landlord organization Stichting Fair Huur. The vast majority of its members are considering selling their rentals in the large cities, the organization told the Telegraaf. On Tuesday, the realtors association NVM reported that rental transactions in the free sector increased in the first quarter, and rents decreased slightly. But it warned that the long-term trend was much less rosy.

Outgoing Housing Minister Hugo de Jonge’s Affordable Rent Act extends the points system that already applies to social housing to also include rental properties up to a rent of 1,123 euros and 1,235 euros for new construction. The points system sets the maximum rent for a property based on what it offers in terms of size and insulation, for example. The system should eventually save 300,000 tenants an average of 190 euros per month on rent. Parliament has already approved the bill, and the Senate is now considering it. De Jonge hopes to implement it on July 1.

According to Stichting Fair Huur, its members own 6 billion euros worth of rental properties. A poll among its members showed that 83 percent are considering selling their rentals in the big cities. They feel forced to do so, chairman Toon Mans told the Telegraaf. “A home that costs the landlord 1,500 euros per month, for example, can only be rented out for 1,100 euros due to Minister De Jonge’s new point system. Then, as a real estate owner, you have to put in money. Of course, no one is going to do that.”

The NVM is also concerned about the Affordable Rent Act's effects on the private rental sector. “Although excesses in the rental market must be tackled, the accumulation of rules and tax measures appears to have a negative effect on the rental market,” Lana Goutsmits-Gerssen of the NVM said. “A mid-level and private renal sector of substantial size is crucial for a stable and well-functioning housing market.”

The NVM reported that there were 12.2 percent more residential rental transactions in the private sector in the first quarter of 2024 compared to a year earlier, and rents fell by 0.6 percent. These figures are based on new rental agreements signed. However, the long-term development shows that the number of rental transactions is declining, indicating that the private sector market is shrinking rather than growing.

Stichting Fair Huur expects that to continue as more landlords sell off their properties. Minister De Jonge always pointed out that sold rentals would benefit people trying to buy a home, especially those with a mid-level income. But according to Mans, that is only partly true. “Only a quarter of the homes for sale are affordable for households with an average income. This only increases the housing shortage for middle-class people,” he told the Telegraaf.