Buy-to-let: Problem or solution? A study on contrasting buy-to-let policies in Amsterdam and Rotterdam
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Buy-to-let is a growing phenomenon on the Dutch housing market. It can be defined as an investment involving the purchase and transfer of a dwelling to the private rental market (Paccoud, 2016, p. 839). Both societal and scientific discussions are held which concern the consequences and effects. Positive consequences such as qualitative improvement of homes and expansion of the housing supply are mentioned. However, negative consequences seem to be receiving increasing attention. Exploitation, degeneration, excessive price increases, changing city characters and displacement by gentrification are examples of this (Boersma, Langen & Smets, 2013; Pinkster & Boterman, 2017; Hochstenbach, 2018). In any case, buy-to-let has consequences for the local context in which it takes place. Therefore, more and more Dutch cities are developing specific policy on buy-to-let, with Amsterdam as national forerunner. Cities like Rotterdam, on the other hand, seem to be increasingly confronted with buy-to-let, and here too buy-to-let policy development is taking place. However, the current policy appears to be very different from Amsterdam. The question for scientists is therefore: what moves municipalities towards a certain type of buy-to-let related policy, and which contexts influence this differentiation? Policy related literature often focuses on the final product; what is the result of the policy, and is it right or wrong (Sykes, 2008; Getimis, 2012). International buy-to-let related research has previously conducted research from this ‘criticizing’ approach (Sprigings, 2008; Leyshon & French, 2009). However, this research focuses mainly on the contextual framework within which policymaking takes place. Attention is paid to the local, macroeconomic, and organizational context. To gain insight into how these contexts influence buy-to-let related policy in Amsterdam and Rotterdam, interviews were held with policy advisors in both municipalities. Based on the results found, an answer has been formulated on the central research question, which reads: How do the local-, macroeconomic and organizational contexts in which buy-to-let takes place influence the policy regarding buy-to-let in Amsterdam and Rotterdam? In summary, the general vision of both cities on buy-to-let is determined by the extent to which positive and negative effects are observed, and to which extent these effect may or may not be in line with the housing objectives set. For example, this study shows that the degree to which negative consequences of buy-to-let overwhelm positive consequences causes the Amsterdam ‘skeptical’ vision on buy-to-let investment. Changing neighborhood characters, decreasing quality of life, illegal rental and excessive house price increases all make it difficult to achieve the set housing goals. These predominantly negative developments in Amsterdam therefore are decisive for their skeptical vision. In Rotterdam, on the other hand, the positive effects seem to be mainly observed. Qualitative home improvement and differentiation of the housing stock are observed effects that are in accordance with the set housing objectives. In addition to these different visions in both cities, the municipal political composition seems to be decisive for the approach. We observe a clear difference between the two cities; moderate ‘left-wing’ in Amsterdam and moderate ‘right-wing’ in Rotterdam. The different political views on buy-to-let seem to determine the way in which both cities are prepared to intervene in the free market. Vision and political ideas within the municipality, form the basis for the type of approach that is chosen in municipal policy. Subsequently, the local, macroeconomic, and organizational context all have varying degrees of influence on the resulting buy-to-let policy in both cities. This is caused by the reactive nature of policymaking, in which experiences of buy-to-let in the local context (desirable or undesirable) form the basis on which policy is formed. Undesirable consequences in the Amsterdam local context therefore result in restrictive and discouraging policy (control), where desired consequences in the Rotterdam local context mainly result in steering policy (regulation and/or promotion). Moreover, the organizational context mainly determines the possibilities that municipalities have to intervene by means of power. This is most evident in Amsterdam's preventive policy, which requires a higher degree of authority. This degree of authority directly determines the way in which policy can be conducted. Finally, the macroeconomic context works primarily as a facilitator for buy-to-let investors and is therefore indirectly relevant for the ultimate policy. In conclusion, this framework of different contexts offers possibilities and limitations within which municipalities can shape their policies. Therefore, buy-to-let policy making in Amsterdam and Rotterdam is subject to the complex and different nature of these contexts, which results in fundamentally different policies. As a result, a controlling, discouraging, and preventive policy is pursued in Amsterdam, whereas steering, regulative policy is pursued in Rotterdam.