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Money Matters and Legal / In Law

Proposed Reforms of Housing in France: 3-month Lease and Cutting red Tape

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Prime Minister Edouard Philippe has proposed significant measures to reform housing in France, including a new ‘flexible lease’ and easing of construction red tape. 

Critics and proponents in the National Assembly will have to wait until October to vote on the full version of Edouard Philippe’s reform bill. For now, several stand-out proposals – all of which formed part of Macron’s campaign – have created quite a stir among industry professionals and commentators.

The first is a 3-month lease. This is intended to help the self-employed and interim workers who want flexibility and freedom. It would require no deposit or key payment from tenants, instead obligating landlords to take out a Rental Risk Guarantee to protect against lost rental income. It has received mixed feedback.

Minister for Housing in the Paris Town Hall Iain Brossat tweeted “After creating insecurities for workers [referring for planned changes to employment law], the government wants to create insecurities for tenants with a lease…. of 3 months! Shameful.” But for Bernard Cadeau, head of property site Orpi, the measure is a step in the right direction.

“It’s a positive move for the industry from a macro-economic point of view. Speaking generally, it will integrate a rapidly changing labour market with the rental market, in turn making it more dynamic. What’s more, it favors mobility, especially in certain technical and professional fields, and opens the market to tenants previously shut out.”

Construction will also be a focus of Philippe’s bill. Easing of red tape will ensure “planning permission processes are accelerated, while abusive appeals are sanctioned,” the Prime Minister said. Measures to reduce the power of local opposition to new developments were promised by Macron during his election campaign.

Measures to reduce the power of local opposition to new developments were promised by Macron during his election campaign © Flickr

Decentralization of planning permission powers is also an important feature being proposed by Philippe, to the delight of FNAIM president Jean-Francois Buet, who sees the benefits in localizing decision-making, especially as regards brownfield sites and under-used properties.

“It’s imperative to look to obsolete housing stock for solutions,” speaking about the importance of renovating rather than just building. “Today, we build about 350,000 homes a year, around 1% of the housing stock. Construction alone is therefore not enough, otherwise we will face shortages for a decade.”

A ‘re-thinking’ of how much France spends on housing benefit is also on the table. Philippe declared that “we should have a look at hefty public expenditure that yields weak results. We spend twice as much as our neighbors on help for housing in France, yet we still face problems regarding access to affordable housing.”

It is likely that hard details or specific reforms in this area will only be revealed much closer to the time, it being a much more controversial measure. The French can likely just about stomach de-regulation in construction and housing, but withdrawing or reducing government aid to tenants will probably result in the kinds of protests seen during last year’s Nuit Debout movement.

image © Wikicommons

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