Paris testing out new housing model free of co-ownership fees
A unique building project whose apartments will be free of co-ownership fees is scheduled for completion in 2018. This will allow units to be 30% cheaper than normal. The future building is one of 22 projects selected as part of the Reinventing Paris competition.
A new real estate project called Edison Lite is expected for completion in 2018 near the Place d’Italie in the 13th arrondissement of Paris. The future building is one of 22 winning projects selected by the City of Paris as part of the Reinventing Paris competition.
According to its promoter Loftissisme, the Edison Lite offers “a new design, production and business model for housing to enable home ownership and promote social inclusion.” The building has also been designed to be ecologically friendly. It will contain between 20 and 26 housing units, depending on their size, which will be determined by the needs of purchasing candidates. Indeed, interested parties can already register online and play an active part in designing their future homes.
Moreover, owners will be exempt from co-ownership fees, usually the norm in Parisian buildings. According to Loftissisme’s Maximilien Motto, co-ownership fees usually range from 22 to 45 euros per square meter, per year.
In this project, co-ownership costs will instead be covered by revenue generated from the long-term rental of the basement and ground floor as commercial space — and the sale of part of it by the promoters will contribute to reducing final housing costs. The tenant has already been found, a subsidiary of the Cofely group. It is estimated that renting out this space will generate 40,000 euros annually, more than enough to cover the 33,000 euros of expected co-ownership costs. The remaining 7,000 euros will be set aside for renovation works needed in the long-term.
While the lack of co-ownership fees is a contributing factor, the fact that apartments will cost 30% less than normal is also due to various other aspects, such as the fact that the apartments are advertised online, meaning there are no marketing or advertising costs. Various practices to increase the building’s energy-efficiency are also expected to contribute to lowering costs. The relatively cheap price of the land is an added advantage, due to the fact that it was bought from the city rather than through auction.
Edison Lite’s apartments won’t be exceptionally cheap, but at 7,990 euros per square meter, they will still cost 30% less than other new builds in the area.
Photo credit: Réinventer Paris