This Paris Life

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Parisian property owners file an appeal against rent caps

With new rent control laws in effect in the capital since August 1st, Paris property owners contest the regulation while landlords in the North of France fight hard against similar legislation passing in Lille.

While 8 out of 10 people in France approve of the rent caps according to a poll led by opinion and market study institute BVA, owners and landlords do not look favorably on a law they believe will damage the property market. They fear the new system’s complexity will put off potential investors.

A number of real estate organizations including the UNIS — a real estate trade union — the UNPI — the National Union of Real Estate — and real estate agency Fnaim will file appeals contesting the law, the first by August 12th before the State Council and the other to the Paris Administrative Court.

Denis Brunel, CEO of La Chambre Nationale des Propriétaires, another trade union for property owners, also questions the need for rent regulation considering that “everything shows that the market naturally regulates itself”, while Laurent Vimont, of Century 21, believes the State is attacking the “sacred right of property”.

As mentioned in a previous Paris Property Group article, the new rent cap structure in Paris may bring with it certain adverse effects; for instance potential discouragement of investors and possible shortage of rental property due to landlords being deterred from renting.

Jean-François Buet, CEO of Fnaim, dubs the new rent cap law “a historic mistake”. He states that while François Hollande first expressed an intent to control rents in 2011 when Parisian rents were climbing fast, four years later they have stabilized, thus the regulation comes into force much too late. To Buet, the remedy has been administered to a cured illness.

He believes that as a result of the law, current or potential investors will sell their Parisian property and invest elsewhere.

Buet also finds fault with the criteria by which average rental prices have been determined. Distinguishing a rental property by number of rooms and according to the construction year of the building pays no heed to the property’s condition. Thus, to Buet, maintenance efforts by the proprietor are not properly valued.

Rental supplements are another element criticized by Buet. Under the law, landlords may go over the rent cap amount if they can prove that their property presents a valuable feature such as a terrace or a view. However the exact criteria and supplement amounts are not specified. Buet derides this legislative imprecision: “the view of Parisian rooftops, which I consider charming, may be deemed banal or even depressing on a rainy day by another tenant”.

Professionals of the real estate sector in Lille are also conducting their own campaign against the rental caps in the form of mutiny. For the rental price average to be determined, the local Departmental Agency of Housing Information — Adil — must widely collect data from realtors. But real estate agents in Lille have been attempting to disrupt the process by not providing the necessary data. Director of Adil Francis Chassard says “they have given us almost nothing, they say they have no time or too much work”.

This may not be enough to prevent rent control laws passing in Lille, with Grenoble most certainly following suit in 2016.


Photo credit: Flickr / Frédéric Bisson

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