Denmark’s housing minister, Kaare Dybvad, has made clear he wants to reduce the influence of big international funds, which he warns are turning Copenhagen into an enclave for the wealthy. Dybvad says he doesn’t want to point the finger at individual funds, but in a recent interview with state broadcaster DR, he mentioned Blackstone as an example of the kind of buyer he’s targeting.

Dybvad is now working on getting broad backing in parliament to “solve the problems that we have with American private equity funds,” he told DR. Such buyers are “driving up prices in the Copenhagen rental market” and making it harder for low-income earners to remain in the city, he said. But Blackstone says it’s a long-term investor in the Danish market, and that it complies with all regulations.

“We agree that the under-supply of rental housing in Copenhagen needs to be addressed, which is why we are bringing additional units to market, while continuing to invest capital into the properties, improving sustainability and contributing to the local economy,” Jean Ahlefeldt-Laurvig, a spokeswoman for Blackstone-owned 360 North Property Management, through which the firm operates in Denmark, said in an emailed response to questions.

Paved with bike paths and dotted with cafes, Copenhagen is considered among the world’s 10 best cities in which to live. It’s also suffering from a housing shortage, particularly of affordable places for young families and students. The city’s appeal has attracted offshore investors looking for safe returns.

Copenhagen is a “haven,” according to Cushman & Wakefield. In a report earlier this year, the global brokerage said foreign investors accounted for 36% of total transactions volumes in the first quarter. Though transaction numbers were down from 46 percent a year earlier, foreign investments were the largest in the quarter, according to Cushman & Wakefield.

Dybvad signaled he’s not happy with the level of foreign ownership that’s now driving prices in Denmark’s real estate market. “It’s not American capital funds that get to determine the housing market in Denmark’s capital city,” he said. “It is obviously Danes who should that.” Blackstone, which has about USD 512bn in assets under management, recently bought Copenhagen-based 360 North, whose portfolio encompasses more than 2,800 rentals. About USD 140bn of Blackstone’s assets are invested in real estate.

“We intend to own these properties for decades and will ensure that they are operated to the highest standard,” Ahlefeldt-Laurvig said. “We have always operated within the existing regulatory framework, which is one in which all leases are and will remain indefinite for the existing tenants.”

The practice of buying low and affordably priced properties and then ratcheting up rents after renovations drew criticism earlier this year from a United Nations’ special rapporteur. It named six countries, including Denmark, and urged the government in Copenhagen to address the development. A working group is looking into the options the government has, Dybvad said.

The intention isn’t to create a new law that targets a single firm, “but we thought we would target those that have a very short-term interest, that have a tactic like Blackstone, which is to buy it, fix it up and then sell it.” The approach is “not a good method that we can accept for the Danish market,” Dybvad said. “And it’s not a method that I will accept as minister, so that’s something we’re going after.”