Improving Property to the Benefit of Both Landlords and Tenants: an Ongoing Paradox in a Danish Context

Throughout the latest years focus internationally – primarily based on EU Directives – as well as in national government housing policies has been on measures of energy savings. Energy policies and legislation affect housing and landlord/tenancy relations directly and indirectly.

In many cases the result of this is that property owners (landlords) have many obligations but only little motivation on improving the standards of the property as the return on such investments is very low. This is mainly due to the fact that amounts spent on energy saving measures or other improvements to a building or an apartment are not equivalent to a possible rent increase. On the other hand more tenants may demand tenancy of a certain standard – a demand which not always can be reflected in the rent set for a given tenancy due to the Danish rent regulation regime. Solving these paradoxes is problematic even though this has been the aim of changes to the Danish Rent Act over the latest years.

In this context this paper explores regulation on the implementation of primarily energy saving measures in the scope of the Danish rent regulation regime. The aim is to determine if the system may fulfil its purposes under these conditions and discover whether there are possible ways of solving the paradox in a more efficient way. This also raises the question whether rent regulation can function sufficiently under the framework of EU policies and legislation. Rent regulation in general is viewed in a Scandinavian perspective.