The Danish rental market
In Denmark, there is a fairly clear distinction between the market for private sector renters and public sector renters, each with a very different set of regulations and financing possibilities.
During the 1980’ies and 1990’ies a large number of private multi-family houses have been renewed with public, financial support. This possibility still exists, but many municipalities have stopped the financial support during the last years. In stead there has been a change in the regulation, opening the possibility of financing improvements through increased rent (liberation from rent regulation by the so-called article 5, paragraph. 2 renovations).
The taxation of private owned housing, and as a part of this: the valuation of the houses is a big issue in Denmark, together with a discussion of financial support through a tax reduction for maintenance purposes. The original idea was to create jobs, but it’s also a discussion, if a special focus should be put on improving energy efficiency.
Studies have shown that it actually pays to improve the energy efficiency and lifting the house from a lower to a higher energy label. But interview investigations among private house owners show that the motivation for renovation is economical gains and tenants satisfaction. So a challenge in Denmark is to raise awareness between private house owners that renovation pays and energy renovation pays better.
Parallel to this development is raising rents, especially in the larger cities, due to raising demand. The houses are getting too expensive for a normal income, and more and more people chose a flat instead of a house. The raising prices are also part of the explanation of the fact that it pays to renovate.
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