[IkmoIkmo]

This is one of those terribly myopic and symbolic policies that the Netherlands (despite generally one of the best governed countries in the world) keeps falling for.

Studies have shown over and over again that investors aren't causing the price increases in the Netherlands. Prices won't improve much.

Renting is going to take a beating, which is already an extremely small sector in the Netherlands, among the smallest in Europe. Remaining rental stock will be priced like crazy, pushing everyone desperately into a decision to buy. Due to systemic shortages that's not possible, exacerbating the gap between haves (who bought) and have-nots (who must keep renting).

Various studies have also shown a rental market is extremely important for labour mobility. Transient workers can't just move cities/regions in pursuit of jobs, when the rental market is completely destroyed and the only alternative is to buy a home and be stuck to that location for years (due to the friction and transaction costs of buying over renting).

> Would she not be able to own and rent these homes under this scheme?

She would, but she'd be unable to buy more off the market to rent out, unless they were already buy-to-let stock previously.

> I could never understand why this wasn't means tested continually.

Me neither. It seems like the least controversial thing that the left and the right should have agreement over: rich people not getting subsidised social housing. Things are getting better though, there's now means testing and accelerated rental price increases (up to a maximum) if your income is assessed as too high. But the new policy still way, way too generous to a class of rich people, while there's poor people waiting in line for 10 years in Amsterdam.

[DoubleDerper]

"Studies have shown over and over again that investors aren't causing the price increases in the Netherlands"

Source(s), please.

[gruez]

Sibling comment: https://news.ycombinator.com/item?id=28425948

[berkes]

As above, you are presenting as a fact that investors aren't causing increasing prices. And as above, that is both uncited and, at the very least, a highly debatable 'fact'.

Even if not the only cause (is there ever just one isolated cause in economics), investing certainly is a big part.

[speleding]

Basic economic theory says that the price is determined by supply and demand. Investors buying house does not affect supply or demand, since they will simply rent out the house.

If you claim that investors are causing a significant price increase then I think onus would be on you to cite a source.

[colechristensen]

So the housing market is so inefficient that removing a significant source of demand won’t change prices?

That is an exceptional claim that requires exceptional evidence.

[missedthecue]

New Zealand banned foreign buyers a couple years ago and house prices are up 20-50% nationwide since then.

https://i.stuff.co.nz/life-style/homed/119636052/foreign-buy...

The problem is that people chronically overestimate the number of foreign buyers in the market. I can't find data for the Netherlands online, but for other western nations, it is around four or five percent of demand. Removing that will have essentially no noticable impact on housing prices as NZ has learned.

The advantage of a foreign ban is political in nature. Foreigners can't vote in local elections, so politicians lose very little, and the actual electorate is satisfied that government is 'doing something' about the problem.

It's a no lose situation for the politician, but at best it does nothing to reign in the issue of housing costs, and at worst it fans the flames of xenophobia.

[yread]

Foreign investors account for more than half of total real estate investment flows in the Netherlands, see page 8

https://www.bouwinvest.nl/media/4305/bouwinvest-dutch-real-e...

[missedthecue]

That is real estate investment flow. That's not the same thing as housing. The graph you linked shows the majority of the investment going into things like office space, industrial real estate, retail, hotels, healthcare, etc...

[IkmoIkmo]

It must also be noted that the vast majority of these deals aren't homes on the market for locals, they're existing investor real estate.

Sometimes you see articles stating '25% of all homes last year were bought by investors', but failing to mention that 20% of that 25% were homes sold by investors, too. i.e. company A selling to company B, an apartment block fully rented out. Sometimes company A and B are part of the same group structure, and they're simply restructuring. And so really the percentage of investors buying homes that could otherwise be bought by citizens, is actually only 5%.

Secondly, there's a lot of international capital flowing in because capital is extremely mobile and knows no borders. It doesn't mean foreigners own the real estate. Everytime a Dutch investor (e.g. a Dutch pension fund) buys real estate, it typically finances it with a combination of its own money and borrowed money, and the borrowed capital is typically raised on international financial markets.

I find the news is quite unsophisticated in detailing these nuances, and typically chooses the most incendiary headline that they can get away with.

e.g. "25% of homes bought by foreign investors." or hell even "50% of real estate bought by foreign investors", instead of 5% of available homes bought-up by Dutch pension funds", all three statements could be based on the same data-set.

[colechristensen]

Foreign buyers isn’t generally a problem on a national level but on a city or neighborhood level where specific areas are targets.

[missedthecue]

Even still, home prices have risen the fastest in Auckland.

[IkmoIkmo]

No, that's not the claim. There's waterbed effects. Buy-to-let is done for the purpose of renting. If you take that rental supply away, rental prices go up, and demand for homes go up. Taking away buy-to-let demand thereby creates other demand that buy-to-let was supplying. You're just replacing the demand, not removing it.

[skybrian]

Could you spell out why this doesn’t just move demand around? Aren’t the same number of people as before looking for a place to live?

(I also don’t know what you mean by “waterbed.”)

[IkmoIkmo]

It does just move supply/demand around, that's the waterbed effect.

If you remove buy-to-let investors, then buying a home becomes easier, but not necessarily any cheaper, because the rental supply (from buy-to-let) drops and therefore the prices of rentals go up, thereby increasing the demand for buying a home, countering the lower demand from buy-to-let investors. Demand has been moved around, the shortages are still as big, and there's no significant effect on prices.

[luckylion]

> It seems like the least controversial thing that the left and the right should have agreement over: rich people not getting subsidised social housing.

The argument I've heard in Germany is that it's a good idea to have more socially mixed housing projects, so people who moved in as students are allowed to stay when they work full time. Initially they had to pay an extra fee ("Fehlbelegungsabgabe" = erroneous occupancy fee, but even with that it was much cheaper than regular housing), which was removed at some point.

[IkmoIkmo]

Our social housing stock is already intended to be mixed (although the balance is often not great). You'll often find social and non-social housing units in the same apartment building, and definitely in every neighbourhood there will be a mix. I agree and think that mix is super important. But achieving it by giving rich people subsidised housing when there are poor people on a waiting list for these units, is one of the least optimal solutions, compared to alternatives.

[gpvos]

Means testing would force medium-rich people to live on the streets (or with their parents), since there are no rental houses available between 700 and 1200 euro/month (that is, between social housing and the liberalized sector), and not all of them will be able to buy a home with the current prices.

[IkmoIkmo]

We're talking about rich people occupying social homes intended for the poorest people. However bad it may be for 'medium-rich' people, it's much worse for poor. Any extreme outcome (like living on the streets) would have a much higher chance with poor, than medium-rich, who tend to have options. There's plenty of housing stock at 1200 a month that can be shared by two 'medium-rich' persons within a 45m commute from their work. No such options exist for poor people for whom social housing is intended. Of course means-testing will create issues for medium-rich, that's not the question, the question is if it's fair to protect them from these issues at the expense of the poor, by giving the rich subsidised housing intended for the poor. The answer is obviously (to me) no.

[gpvos]

Fair enough. Though cynically speaking the people just above the social housing limit are probably a more interesting part of the electorate than the poor.