Paris Mayor launches new system to encourage owners to rent out their property

Voted in on 2^nd July, the first instance of the “Multiloc” system was signed last Friday by Paris Mayor Anne Hidalgo. The new project aims to diversify rental offer in the capital, by financially aiding owners in putting their vacant property back on the market.

On Friday 16^th October, Anne Hidalgo, Mayor of Paris, signed the first contract under the new Multiloc system with L’Adresse’s CEO Brice Cardi at his real estate agency in the 16^th arrondissement.

“Multiloc is a concrete measure to help the middle class return to Paris,” explains Ian Brossat, the deputy in charge of housing and emergency housing, adding that the “innovative device will encourage owners to put their homes on the market, with the help of real estate agencies.”

In addition to a bonus of 2,000 euros on entry into the system, owners are awarded financial support for the renovation of their apartments ranging from 2,500 euros to 10,000 euros if the property has been vacant for over six months and requires major refurbishment work. According to a City of Paris press release, Multiloc also includes personalized support throughout the rental process.

In return, the owners are committed to renting out their properties for 20% less than the average rent in the area.

The device also relies on real estate professionals encouraging owners to use the device and helping them through the process. Brice Cardi welcomes the initiative, believing that the system aids both owners needing help with getting their property up to standard and tenants put off by high rents in the capital.

Mayor Hidalgo told the Figaro that the main reason “40,000 private properties in Paris have remained unoccupied for over six months” is the lack of refurbishment works undertaken in these units. “At the same time, the Paris rental market is becoming increasingly tense” and Multiloc aims to “remedy this situation.”

Hidalgo, who has made access to housing for all Parisians a priority of her tem, has expressed her commitment to create 10,000 new housing units per year, with at least 7,000 of them being social housing. This new system fits into the “Housing for All” agreement she signed in June 2014, which in addition to boosting construction, also aims to strengthen the affordable rental property supply in the capital.

She is determined to “act on the entire chain of housing, from social housing for the working classes to small middle-class dwellings,” since “those who make the city work must naturally be able to live there.”

While 689 member agencies of the central Paris Fnaim will now use and offer Multiloc, other real estate professionals have expressed their doubts about the system’s effectiveness. Real estate agency Guy Hoquet reports that housing remaining vacant often does not merely depend on the owner’s will: “a property can be waiting to be sold, rented out or inherited.”

Guy Hoquet CEO Fabrice Abraham believes that this new measure will contribute to investors withdrawing from the capital, especially in addition to “rent caps having negatively impacted property investment in the capital.”

Others believe that Multiloc merely carries a symbolic significance: reflecting how essential it is to remedy high levels of vacancy in Parisian property given the state of the housing crisis in the capital. While all previous devices aimed to fight against this phenomenon were based on a financial penalty system and as such have failed, Multiloc at least has the merit of using positive reinforcement, according to La Tribune.

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