Affordable Rent Act: New Regulations for Affordable Rental Housing
The government has introduced the Affordable Rent Act to make renting affordable again. This law ensures that landlords charge a rent that corresponds to the quality of the property by applying the modernized Housing Valuation System (WWS) to mid-rental properties up to 186 points. With this law, tenants will have better rent protection, as municipalities will be able to intervene if landlords charge too much rent. As a result, the rent for 300,000 homes is expected to decrease by an average of 190 euros over time. The bill was passed by the House of Representatives on April 25, 2024, and will soon be considered by the Senate. The law is expected to come into effect on July 1, 2024.
Tenants with middle incomes will receive extra protection thanks to the modernized WWS, which stipulates that a property with 186 points may charge a maximum rent of approximately 1,123.12 euros (January 2024 price level). Rent prices will be annually indexed. Additionally, the energy efficiency of a property will be better valued in the WWS, with extra points for properties with an energy label of B or higher and negative points for energy labels of E or lower. This promotes the sustainability of rental properties.
Although regulating mid-rental housing may affect the willingness of real estate investors and developers to invest, the design of the mid-rental regulation takes into account the goal of building an adequate number of new homes. Landlords of newly built properties may, under certain conditions, temporarily charge a 10% surcharge on the rent. The improvement in the valuation of sustainable energy labels contributes to the quality of the housing stock, making investments in sustainable homes more attractive.
The WWS becomes mandatory, requiring landlords to respect maximum rent prices. Municipalities will be responsible for supervision and enforcement, which should better protect tenants. This measure applies to both the current regulated segment and the future mid-segment.
Under the current system, tenants must go to the Rent Committee or court to obtain a lower rent. This changes with the new law, as municipalities can now intervene directly in case of violations. This will bring an additional 113,000 homes into the affordable segment (rent below the liberalization threshold and mid-rental).
For more information on what you as a tenant or landlord can do before the implementation of the Affordable Rent Act, you can consult the page “What should I do as a (land)lord before the Affordable Rent Act is implemented?” Here you will find the latest information on the bill.
With this law, the government aims to end exorbitant rent prices and ensure that rent prices are fairer and more in line with the quality of the properties.
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