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Danish government’s move against ‘rent increase’ housing speculation collapses

A proposal by the Danish government to legislate against big companies investing on rental housing, pushing up costs for tenants, has collapsed.

Danish government’s move against 'rent increase' housing speculation collapses
Housing minister Kaare Dybvad briefs media. Photo: Martin Sylvest/Ritzau Scanpix

After a breakdown in parliamentary negotiations, opposition parties and the centre-left Social Liberal (Radikale Venstre) have joined forces to block the government proposal from moving forward.

The opposing parties said in a statement that they want an intervention that will not negatively impact the value of existing housing, does not involve the state in financing renovations and does not affect cooperative housing [Danish: andelsboliger, ed.].

The opposition parties and the Social Liberals will seek to pass legislation to that end without government participation.

“We believe that such an intervention is realistic, and the Liberals, the Danish People's Party, the Social Liberals, the Conservative Party and Nye Borgelige (New Right) are therefore continuing the negotiations,” the parties wrote in a joint statement.

Together, the parties have 91 seats, enough to pass legislation in parliament.

A major obstacle in the negotiations was a proposed cooling-off period for rent increases, Ritzau writes.

The proposal would have meant that rents could not be increased due to renovations for seven years after a property has been sold. The intention of this was to prevent short-term speculation through buying a property, making renovations and then raising rents, generating a large return over a short time.

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New regulation proposed by the government would have revolved around section 5.2 of the Danish Housing Regulations Act (boligreguleringsloven). The clause allows landlords to significantly raise rents in pre-1992 properties if 250,000 kroner is invested in the apartment.

Liberal party housing spokesperson Heidi Bank said that Minister for Transport and Housing Kaare Dybvad had “simply failed to find a majority” for the government plan.

At a press briefing earlier on Wednesday, Dybvad said the cooling-off period was the only measure that could stop short-term speculation on the rental housing market.

“We disagree on the speculative block aimed at short-term investors. My job is to ensure this, so I can't make a deal without it,” Dybvad said.

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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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