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Paris vows to bring back rent caps in autumn as prices soar

Paris City Hall has reacted to news that rent prices in the capital have soared since left unregulated six months ago by promising to bring back their flagship rent caps in autumn, after they were scrapped by a court.

Paris vows to bring back rent caps in autumn as prices soar
Photo: AFP

Paris deputy mayor Ian Brossat told several French media outlets on Wednesday about mayor Anne Hidalgo’s plans to bring back price caps for the city’s rental market, six months after a French court scrapped the regulatory measure.

The decision comes after the country’s National Association for Consumer and User Protection (CLCV) revealed how more than half of all rents in Paris had soared since deregulation was introduced six months earlier.

According to CLCV’s findings, the average rent increase in that period was €1,530 per year and in some neighbourhoods nearly €5,400 more every year.

Brossat, who is also responsible for housing in Paris, says the city council would use France's prospective ELAN law, which would allow French municipalities who wish to impose rent controls to do so.

 

 

“We have asked the government to let us bring back rent controls. The ELAN law allows us to. We will do it in autumn as it's essential that workers have a place to rent,” Brossat tweeted. 

This new legislation is being debated in the French Senate on July 19 2018, with the aim of implementing the “evolution of housing, development and digital technology” in Paris.

Brossat then told property publication Immoweek that he was referring especially to “young people, students, single-parent families and middle-class families, who were the the biggest beneficiaries of rent caps.”

Jean-Yves Mano, president of the CLCV, told France Info “property owners have become overconfident” without the rent caps in place.

Rent controls, which were introduced in Paris in 2015, managed to put a stop to ten years of uncontrolled price hikes in the city’s rental market, a 50 percent increase in just a decade.

“We now have proof that the supervision was effective as  two years it allowed Parisian rents to stabilise, ” Brossat told France Info.

Paris mayor Anne Hidalgo and deputy mayor Ian Brossat. Photo: AFP

“We are faced with a very simple question: should we allow the market to act of its own accord in our big cities? If we leave it, the middle classes will have to leave.”

Back in November 2017, The French government and the mayor of Paris were left stunned by a Paris administrative court's decision to cancel landmark rent controls implemented in the French capital back in August 2015.

The judge's ruling effectively scrapped the regulation that banned landlords from setting rent prices more than 20 percent higher than the designated reference price for the neighbourhood when renting a flat for the first time or renewing a lease.

Paris City Hall feared it would lead rent prices – already high at the time – to soar as a result.

Those predictions seem to be coming true as Paris residents are forced to dig even deeper into their pockets to keep living in the capital.
 

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RENTING

Local authorities in France get power to crack down on Airbnb rentals

Authorities in Paris and other French towns will be able to regulate local businesses who wish to rent property on Airbnb, according to a decree published by the French government. 

Local authorities in France get power to crack down on Airbnb rentals
This illustration picture taken on July 24, 2019 in Paris shows the logo of the US online booking homes application Airbnb on the screen of a tablet. (Photo by Martin BUREAU / AFP)

The news was welcomed by authorities in Paris, who have long battled to keep a check on Airbnb and its impact on the rental market. 

On Sunday, the French government published a decree that allows the City of Paris to subject the renting of local businesses to prior authorisation. 

This decree applies to all types of offices, stores or medical offices who may be turned in holiday rentals. 

It aims to allow towns to limit the growth of rentals on Airbnb, “protect the urban environment and preserve the balance between employment, housing, businesses and services on their territory,” says the decree. 

The news was welcomed by authorities in Paris, which has been witnessing “the multiplication of ground floor business premises being transformed into holiday rentals,” said deputy mayor Ian Brossat, who is in charge of housing, in a press release

This decree which comes into effect on July 1st, “will prevent local businesses from being turned into holiday rentals,” Brossat added on Twitter.

The conditions businesses will have to meet in order to get an authorisation still have to be defined said Brossat, according to Le Figaro. But Paris aims to draft these regulations and get them voted by the end of 2021, so they can come into force at the beginning of 2022. 

Other towns allowed to apply the decree are those who have put into effect “the procedure of a registration number for furnished holiday apartments, owners and, subject to contractual stipulations, tenants of local businesses who wish to rent them as furnished holiday apartments.” 

In recent years, Paris city authorities have made tax registration obligatory for apartment owners and have restricted those renting out their primary residence to a maximum of 120 days a year.

Now if owners want to rent a furnished property for less than a year to holidaymakers, they must apply to local authorities for permission to change the registered use of the space.

They are then required to buy a commercial property of an equivalent or bigger size and convert it into housing as compensation. 

Until then, these onerous and time-consuming tasks did not apply to local businesses who only had to fill out a declaration.  

In February, France’s highest court, the Court of Cassation, ruled that regulations introduced to counter the effects of Airbnb and other short-term rental sites on the local property market were “proportionate” and in line with European law.

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