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Money Matters and Legal / In Law

After Paris, rents to be capped in Lille, Grenoble and the Parisian suburbs

Lille skyline

After controversial rent caps were implemented in Paris in August 2015, Lille is set to be the next French city to have its rental rates regulated. Grenoble should follow soon after, as might the capital’s inner suburbs.

The new Housing Minister, Emmanuelle Cosse, has announced that rent caps in force in Paris since last August will be expanded to include northern French city Lille by the end of 2016 and southeastern city Grenoble two years later.

Rent control regulations came into effect in Paris on 1st August 2015, within the framework of the ALUR law, for access to housing and renovated urban planning. Its objective was to curb Paris’ inflated rents, which had risen by 42% over the previous decade.

Paris was divided into 80 districts and median rents were set per area by OLAP, the city’s rental observatory. Under the new law, rents cannot exceed these price references by more than 20% nor be inferior to them by more than 30%. However, also playing on rental allowances are the property’s type, size, the date of construction of the building and any extra features that are believed to add significant value to it — such as a terrace or view.

Following its adoption, the measure’s imprecision was slated by critics and property owners filed an appeal against it.

The implementation of rent regulation is now underway in Lille, with the city’s rental observatory being one of the few observatories, along with those of Paris and Alençon, to hold the ministerial approval required to produce the references used to cap rental prices.

According to Audrey Linkenheld, socialist representative for Lille’s region, rental regulation was delayed in Lille because of real estate professionals being unwilling to transmit their data to the rental observatory.

Meanwhile, Grenoble is just beginning its observation work, says Emmanuelle Cosse and she believes it will therefore be at least two years till the city instates rent caps.

There are also talks of expanding the regulation to the Paris agglomeration, to include the capital’s inner suburbs: the Hauts-de-Seine, Seine-Saint-Denis and Val-de-Marne departments. However, obtaining rental data for these areas is more complicated as “OLAP does not have the ability to produce a wide observation of rents in the Paris region,” explains Cosse.

She adds that “the rental market in the Paris region is extremely different from one municipality to another depending on the presence of transport and infrastructure and whether certain neighborhoods are gentrified.”

Despite these difficulties, Cosse believes rent caps could be expanded from Paris to its inner suburbs within the next two years.

Photo credit: Flickr / James Cridland

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