A “shocking” note. Robin Rivaton, founder of the real estate think tank Real Estech and columnist at L’Express, did not mince his words in his latest newsletter. The object of his ire? A study published at the end of July by the services of the General Directorate of the Treasury dedicated to vacant housing. The author explains, with figures to support his argument, that part of the housing needs could be met by mobilizing this unusual stock. All the more so, he specifies, since there are “redundancies” in France: in certain municipalities, the increase in the number of empty housing units for more than two years coincides with the start of construction of new properties in the same proportions.
Badly located, obsolete apartments, whose surface area or layout is unsuitable for current needs, complex inheritance situations, owners scalded by insolvent former tenants… There are a thousand reasons for vacancies. For Robin Rivaton, this note from the Treasury first reflects “the dogmatism that has challenged all professionals in the sector for three years”. But also “the anxiety [à Bercy] of too large a stock of housing.” In reality, he gets carried away, “considering that one dwelling is equal to one [autre] housing is a basic mistake and if people choose not to occupy them, our dear bureaucrats could trust the intelligence of the crowd”. In summary, new housing offers many advantages over old housing, in terms of energy efficiency, optimization of surface area, quality of construction, etc.
Signs of annoyance in the sector
This analysis, published in the middle of summer, under a government on borrowed time and in the long wait for the next casting, could have gone unnoticed. But professionals in the sector have some reasons to be sensitive, or even to show signs of annoyance. In the new construction sector, all indicators are plummeting, with real estate development caught between the rise in production costs associated with regulatory inflation and demand hampered by the rise in borrowing costs and constraints on bank credit. In the first quarter, collective housing permits reached 40,600, compared to a quarterly average of close to 60,000 between 2015 and 2018. Construction starts fell by 23% over one year. Sales fell below the 20,000 mark. Developers are laying off workers left, right and centre.
In the old, the latest notary count at the end of February reported a 23% drop in the number of transactions in one year. SeLoger estimates the drop in the volume of rental property listings posted online in the space of two years, by the end of 2023, at 36%. “If we had applied the law on thermal sieves to the letter, further excluding tens of thousands of homes from the market, we would have increased the shortage,” observes Franck Pétel, holder of the real estate and sustainable development chair at Essec.
The consequences are very concrete, and probably not unrelated to the anger and frustrations expressed during the last elections: students forced to abandon their studies due to a lack of studios to rent, workers whose geographical mobility is hampered, amplifying the recruitment difficulties of companies, families who think twice before expanding – where the housing crisis meets the demographic crisis.
Liberalize the urban planning code
The executive has clearly failed to revive the market. “The dominant thinking within the senior administration is that the housing stock in France is sufficient to meet demand and that construction has had inflationary effects,” Robin Rivaton explains to L’Express, who calls for liberalizing the urban planning code, densifying residential areas, and finding ways to financially encourage local authorities to produce new housing.
Bruno Le Maire himself ended up admitting his responsibility for this fiasco. On June 20, during the hearing of party leaders by employers’ organizations as part of the legislative campaign, the Minister of the Economy praised his actions and castigated the programs of his competitors. A mea culpa? “Housing, I readily admit. A complicated subject, with heavy financial and regulatory stakes.” Before adding a surprising: “We messed around.” And an equally surprising one, coming from the tenant of Bercy for seven years: “It must be an absolute priority.” Robin Rivaton recognizes that the last Minister of Housing, Guillaume Kasbarian, “had perfectly understood the existing blockages. Without being a big bang, the bill would have made it possible to improve the functioning of housing markets.” The dissolution decreed by Emmanuel Macron decided otherwise.
We know that real estate is poorly judged at the highest level of the State, where production is valued more than income. “We tend to make people believe that owners are horrible capitalists who wait for rents to fall and speculate on price increases. The example of this note on vacant housing shows it again, the strategy consists more in finding culprits than solutions, despairs Franck Pétel. When we do statistical analyses without taking into account local particularities, we can indeed arrive at biased conclusions that are not representative of the reality of the market.”
A major part of our economy
Our public authorities seem to have forgotten one thing: real estate is a major part of our economy. 11% of GDP, 12 million jobs. And tax revenues. The fall in transactions has deprived the departments of valuable transfer taxes (DMTO), these taxes paid when a property changes hands. The Court of Auditors, in its report on local finances published on July 22, estimated the fall in DMTOs in 2023 at more than 22%, or 4.5 billion fewer resources.
National finances, meanwhile, are seeing billions of euros of real estate VAT, levied on the sale of new homes, evaporate. 4 billion in 2024, according to Pascal Boulanger’s calculations. The shortfall could even be twice as high, estimates the president of the Federation of Real Estate Developers (FPI), if we take into account all those professions whose turnover – and therefore the VAT paid – depends on new construction: movers, decorators, household appliance salespeople, etc. And it’s not for lack of warning Bruno Le Maire. When Pascal Boulanger hears the resigning minister express surprise at the low VAT revenues, he chokes, he who has been sounding the alarm for over a year. Real estate has its Cassandras.
“As Coluche said, Bercy played ‘who loses, loses’, regrets Pascal Boulanger, still incredulous, and who sees the end of the Pinel tax system coming in five months, while investors have already largely deserted the market. Tenants, owners, real estate professionals, State… In fact, there are only losers.” Is it up to the next governments to take up the issue? If housing was the great absentee from the 2022 election campaigns, the political parties have been trying to re-appropriate the subject since this summer. The president of the FPI wants to see it as a sign of hope.
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