Denmark Is Reviewing Rent Control to Rein In Blackstone
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Denmark’s government is reviewing a number of models designed to prevent excessive rent hikes after the country’s housing minister criticized Blackstone for taking advantage of “holes” in existing legislation.
The models under consideration could mean that foreign investors such as Blackstone might, under one of the scenarios, see the value of their investments cut in half, according to a report seen by Bloomberg.
Blackstone has previously said it’s a long-term investor in the Danish market, and that it complies with all regulations. A spokesman for the company declined to comment on the report until it’s made public but referred to the website of its Danish unit, 360 North, which states that “at just 0.5% of Copenhagen’s rental stock, our portfolio is small and cannot drive the market in any direction.”
The Social-Democrat government that’s ruled Denmark since June has made clear it wants to prevent offshore funds from buying up property and then driving up rents to levels that average income earners can’t afford. Housing Minister Kaare Dybvad has repeatedly singled out Blackstone when referring to the practice.
An expert panel tasked by parliament to look into the matter listed a number of options as to how the government can adjust existing legislation to keep rents under control. It didn’t provide recommendations, just calculations of how the different models might affect rents.
According to the report, which is due to be published early next week, one model includes scrapping a provision in the housing law that lets property owners increase rents substantially if they carry out renovations for more than 183,000 kroner ($27,300). According to the model, owners would see the value of their investments in the major Danish cities decrease by as much as 47%, the documents show.
Residents would face average rent price increases of about 40% instead of the current average of 80% after landlords complete renovations, under the model.
(Adds background information from 360 North in third paragraph.)
--With assistance from Nick Rigillo.
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