With a longer kitchen worktop and an extra garden, the landlord is trying to raise the rent

In the street behind the dike of the village of Melissant, opposite the picturesque church, is a three-storey house with red roof tiles and a sign on the window: ‘sold’. Inside is Elias Coenders. He is a contractor, landlord and since the beginning of June the owner of the building on the South Holland island of Goeree-Overflakkee.

The building has two apartments, each with two floors. The shiny, brown-yellow tiles in one of the living rooms are reminiscent of the 1970s. Part of the window frames are covered with mold. Where the kitchen unit has been removed, the laminate floor is colored black. And the stairs contain asbestos, says Coenders, as he steps onto one of the steps. “But that’s not dangerous, you know. Not until you break open the laminate. We still have to do that.”

Coenders plans to refurbish the three-storey house and rent it out again as two apartments. Renovating the place is necessary to be a decent landlord for the future tenants. But, he says with a laugh, “also because otherwise they can ask for a rent reduction”.

Apart from the necessary renovations, Coenders will also pay attention to the measures that Minister for Housing Hugo de Jonge (CDA) wants to take to get the rental market under control. De Jonge wants to expand the current points system for social rent and thus create a new, regulated rent tier. This middle rent comes between the social rental and the free sector, where the market determines the price. A social rental home currently costs a maximum of around 800 euros per month. The free sector is planned to start at around 1,100 euros.

This should increase the supply of affordable rental housing. The large cities in particular have a serious shortage of these houses, resulting in high rents and displacement of middle incomes in the housing market. About 300,000 homes, says De Jonge, will become an average of 190 euros cheaper due to rent regulation. And as an intended side effect, it should give landlords an impulse to make their homes more sustainable, because the energy label will from now on count more strongly in the amount of the rent. The law still has to be passed by the Senate and the House of Representatives. That process determines whether the law will take effect next year, as the minister intends.

In the run-up to that moment, landlords, project developers and some housing market experts are stirring. According to them, the number of affordable rental homes will decrease. They point out what they consider an excess of regulation. The rent regulation is a loss of income and comes on top of a series of tax measures, such as the increased transfer tax, which actually increase costs. The House of Representatives recently adopted a private-initiative bill to considerably limit the possibilities for temporary rental. That means less flexibility for landlords.

The result, say these critics, is that landlords actually sell homes. According to Marc Francke, professor of the housing market at the University of Amsterdam, it is also possible that property owners invest in their homes in order to get them into the private sector. As landlord Coenders is now doing with his home on Goeree-Overflakkee.

Energy label, kitchen, outdoor area

Here’s how: with the rental points system, all characteristics of a house are assessed. The larger the house and the better the energy label, the more points. A luxury kitchen scores higher than a poor one, a garden is more valuable than a balcony or no outdoor space at all. The WOZ value – and therefore indirectly the location – also counts. Every home up to 145 points is now social rent. Under the comprehensive system, anything between 145 and 187 points legally becomes mid-rent. “It will depend on the house whether you can easily improve it to above 187 or not,” says Professor Francke. “That will work best for homes that are already close to those 187 points.”

Those homes, provided there is indeed room for improvement, can still be obtained on the free market at a relatively low cost. This ‘strategic thinking’ by landlords can have the positive effect of making more homes more sustainable. But according to Francke, it can also lead to landlords refraining from renovation, because it costs them too much for what it yields financially.

Figures about landlords who are renovating are not yet available. From a poll of consultancy Stec Group from earlier this year, it appeared that about a third of the eighteen surveyed landlords – both institutional and private parties – are considering renovating. They want to look at “sustainability or a higher level of finishing” of the home.

Most points can be collected with the surface area of ​​a home, the energy label, whether and what kind of outdoor space the house has, says home landlord Coenders. He goes through his apartments in Melissant and points out what he wants to change about it. The bathrooms need to be polished, there will be a mixer tap and a radiator. He does not want luxury sanitary facilities, such as a luminous mirror and a new shower, because it should not become “some kind of expat event”. Moreover: the number of points you can earn with this is “quite limited”, while the interventions are expensive.

The kitchens are going out in their entirety. “I want to use an L-shaped one,” says Coenders, pointing to the current ramshackle arrangement. “You get a lot of points for a worktop of at least two metres. And built-in appliances also yield a lot.” He also splits the garden in two, so that both houses have a small strip. “It doesn’t matter how big the garden is, you already get a lot of points if there is one.” The current energy label C must become A. The window frames were already in need of replacement due to mold and leaks. And solar panels on the roof. Coenders estimates that the total renovation will cost around 80,000 euros and will take more than six months. He does part of it with his own contracting company.

Funda hobby

Coenders has eight other rental properties. He sees searching on sales site Funda and refurbishing houses as “a bit of a hobby”. He earns about half of his income from housing, the other half from renting. He will sell two of his rental properties anyway when the rent regulation comes into effect. They then fall into the mid-range rent and that, says Coenders, is not profitable.

He calculates. He currently rents one of those houses, an apartment of about 80 square meters in Schiedam, for 1,300 euros per month. The mortgage will cost him 500 euros a month, taxes about 200 and maintenance 50. But when the new measures take effect, he will pay an extra 200 euros in taxes and the rent will drop to about 900 euros. In that case, he makes a loss of 50 euros per month. And in 2024, his mortgage rate will be revised. Coenders expects mortgage payments to double. “So that is no longer the case.”

When purchasing his previous houses, Coenders, who himself lives in his girlfriend’s apartment in The Hague, has been paying attention to the announced rent measures in recent years. “The last homes I bought are all large and in remote areas. The places where you can still buy large houses cheaply.”

Renting out small homes, especially in the Randstad conurbation, is indeed no longer profitable under the new system, says Martijn Lentze. He owns 070 Vastgoed. The agency manages around 1,500 homes in and around The Hague. A ‘large part’ of this is from the agency itself. “We make an analysis of every home that becomes vacant,” says Lentze. “Then we look at how we can get started with renovation, sustainability and optimization for a better point count for the rent.”

“In recent months we learned: you can never lift an apartment up to 70 square meters in The Hague above the point limit of 187. That is simply not feasible,” says Lentze. “Not even with sustainability measures to energy label A, which yields many points.”

It simply becomes loss-making to rent out homes

Martin Lenze 070 Real estate

That is a problem for his own company. Lentze mainly rents out apartments, with an average size of about 55 square meters. They are still in the free sector. Prices vary. He has an apartment of 39 square meters for rent on Westeinde in The Hague: 1,100 basic rent. Or on the De Gheijnstraat: about 1,700 euros for 70 square meters. Both homes would be hundreds of euros cheaper per month under the new points system.

The fact that rent regulation would have the side effect of making rental homes more sustainable, one of Minister De Jonge’s goals, is therefore not something Lentze sees happening in all cases. “If you have an apartment that is now in the free sector, but will soon be the middle rent, making it more sustainable is simply unprofitable. You will never recover the costs you incur from a G label to an A label.”

His advice to customers in the same situation is: sell the lot. “It just becomes loss-making to rent out homes.”