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Danish housing minister wants to discourage foreign private equity firms

Minister for Transport, Building and Housing Kaare Dybvad hopes to find a model on which to reform a paragraph in Denmark’s housing laws which enables foreign private equity firms to speculate on the country’s housing market, pushing up rents.

Danish housing minister wants to discourage foreign private equity firms
File photo: Mathias Løvgreen / Ritzau Scanpix

In an interview with Dagbladet Information, Dybvad said he hoped to agree on new legislation with allied parties in parliament.

“I want to prevent (acquisition of housing by foreign private equity firms) by making some adjustments to clause 5.2 [in Denmark’s housing laws, Boligloven, ed.]. It might take a while, but I hope we can reach agreement before the new year,” the minister said.

The aim of reducing investment in property by private equity firms chimes with a promise by the governing Social Democratic party to make rental housing in major cities more affordable for people on “normal salaries”.

The promise was stated in a written agreement between the Social Democrats and allied parties on the left, signed in June this year as the basis on which the new government was formed.

Jens Rohde, spokesperson on housing with the Social Liberal party, a key ally to the government, gave his backing to Dybvad over the issue.

“We agree on the principals, to everything else is technical. I think we can reach something together within the (new year) timescale,” Rohde said.

Clause 5.2, which relates to renovation of housing, was introduced to give private landlords an incentive to renovate and modernize housing.

READ ALSO: What you need to know when buying a home as a foreigner in Denmark

Keld Frederiksen, chairperson of landlords’ interest association Danske Udlejere, said a change to the legislation would not benefit tenants.

“If you ask tenants where they would like to live, they don’t want to live in a two-room apartment with a shower in the yard or no shower at all. That’s why housing must be modernized and renovated. And there must be a carrot for landlords, since nobody wants to carry out improvements if they can’t be subject to rents which will pay for them,” Frederiksen said.

But the amount by which rent can be increased after a clause 5.2-type renovation is excessive, according to Dybvad.

The minister said that Danish rental housing is attractive to foreign equity firms like Blackstone, which can double rents by carrying out comprehensive renovations when tenants move out of apartments.

“Blackstone’s motto is ‘buy it, sell it, shake it’. They acquire housing, get tenants thrown out, renovate and sell for a higher price. That is a method which is incredibly difficult to reconcile with social democratic housing policy,” he told Dagbladet Information.

READ ALSO: Denmark's housing minister wants to scrap 'ghetto' label for underprivileged areas

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HOUSING

Copenhagen nature area to be developed as city approves land sale

A part of the Amager Fælled nature area has lost its reserve status and can now be sold to investors, after a majority in the city's municipal council voted in favour of development on Thursday.

Copenhagen nature area to be developed as city approves land sale
Amager Fælled. File photo: Asger Ladefoged/Ritzau Scanpix

The 219,000 square-kilometre area, known as Lærkesletten, can be sold to developers who wish to build homes on the land, broadcaster TV2 reported.

The sale raises money needed by the city to pay for the new Metro lines, which opened last year, and was part of a political deal agreed in 2017.

City councillors from the Social Democrats, Social Liberals, Liberals, Conservatives, Danish People's Party and two independents voted in favour, while Red-Green Alliance, Alternative and Independent Green parties and one independent opposed.

Located on the southern edge of the natural area on island Amager, the area is frequently used by people from the city for cycling, running and walking.

“We have seen that nature and the environment are at the centre of the public’s perception of what’s important. They want real wild nature in Denmark,” Gorm Anker Gunnarsen, who represents the Red-Green Alliance on the city council, told news agency Ritzau.

An Epinion survey this week showed that 76 percent of people who live in Copenhagen are either partly or completely against development of the area.

Gunnarsen told Ritzau he still believes there is a chance of preserving the nature zone.

“We have the authority to withdraw a building permit in special circumstances,” he said.

An advisory public vote could on the matter provide the basis for this, he argued.

“This case will not then just rest on which party you are with, but also on your view of the individual case,” he said.

READ ALSO: Copenhagen natural area Amager Fælled gets new development plan

 

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