View of a city's roofs

The Government’s housing strategy

Jacques Mézard, Minister of Territorial Cohesion and Julien Denormandie, Minister of State attached to the Minister of Territorial Cohesion, presented the Government’s "Housing" strategy on 20 September 2017.
 
WHAT DOES THIS INVOLVE?

The three pillars of the Government’s housing strategy

Pillar 1: build more, better and cheaper housing to trigger a "supply shock".

The following is proposed:
  • The introduction of an exceptional tax allowance on capital gains for the sale of land in areas where markets are under strain. At present, land taxation is counterproductive, as it encourages landowners to keep hold of their land (capital gains on property are exempt from tax after 22 years of ownership). The new system reverses this logic. It will apply to agreements to sell concluded before 2020, for the construction of housing. There will be an allowance of 100% for sales intended for the construction of social housing, 85% for intermediate housing and 70% for all other housing. For businesses, the reduced tax rate of 19% on capital gains from the sale of business premises for conversion into housing will be extended. 
  • A commitment to "zero new technical standards in construction", apart from those relating to safety. Furthermore, all building regulations will now be written in the form of outcome objectives (rather than means objectives) and the High Council for Construction will be tasked with drawing up an inventory of standards to be simplified. 
  • A better framework of appeal to combat abuse of process, in particular in areas where markets are under strain. Firstly, by limiting the possibility to file unlimited new grounds of appeal to slow down procedures. Secondly, by regulating the time taken to judge cases, which is currently two years on average for disputes in the first instance. Sanctions against abuse of process will also be tightened.   

Pillar 2: meet the needs of every individual and protect the most vulnerable.

The following is proposed:
  • For tenants in private housing, the creation of a specific rental agreement for one to ten months that is non-renewable and has no security deposit for those on vocational training programmes, apprenticeship contracts or work placements. To simplify procedures for tenants and landlords, a digital rental agreement will also be put in place.
  • For tenants in social housing, a review of household situations every six years for new entrants, which will enable the occupation of housing to be optimised by adapting offers to real household needs.
  • For buyers, the extension of the interest-free loan and Pinel system, which will be better targeted towards areas where there is strong pressure. Furthermore, the sale of low-income housing will be made easier for its occupants with the implementation of a dedicated structure, allowing a fourfold increase in the number of homes sold.
  • For young people and students, the construction of 80,000 homes over the current five-year term. A new version of the Visale rental deposit system will mean that all student tenants can be offered a free rental deposit without means-testing.
  • For those needing emergency shelter: the Government is putting the "Housing First" plan in place, which will speed up the creation of low and very low-income housing (construction of 40,000 units of very low-income housing (PLAI) per year from 2018 onwards, over the whole of the five-year term and 10,000 units in boarding houses) and mobilise 40,000 private housing units (via the rental intermediation system that secures the relationship between tenant and landlord with the intervention of an operator working in the low-income housing sector). Furthermore, support for those in emergency accommodation to find permanent housing will be strengthened. 

Pillar 3: improve living conditions.

The following is proposed:
  • To double the National Urban Renewal Programme from 5 to 10 billion euros in order to act on the 450 neighbourhoods with the highest rates of poverty. Through improved housing, availability of quality public services and enhanced economic development, greater social diversity will be possible in those areas.
  • To speed up the renovation and upgrading to standard of housing in the centre of medium-sized towns by mobilising specific resources from the Caisse des Dépôts et des Consignations (State-owned financial institution which carries out public interest missions on behalf of French central, regional and local authorities) and Action Logement.
 
WHY?
The Government has developed a strategy to change the housing situation in light of the changing social and economic environment. In a society where the digital is omnipresent, the relationship with work is shifting.
 
Mobility has become a key factor both at professional and societal level. France needs housing that is in tune with new modern ways of living, more connected, more eco-friendly, more versatile and better suited to the diversity of individuals’ life courses.
 
Beyond the adaptation of housing, demand for housing has continued to increase. This demand is particularly strong in town centres and metropolises where the housing deficit causes a rise in rents, alienating the least privileged and consequently also impeding social and geographic mobility.
 
Today, a mobility policy calls for a housing policy that frees up construction, lifts constraints, frees up land and shortens procedures, which are all objectives for ensuring the sufficient production of housing to meet French people’s need for decent housing.
 
ACTION TAKEN
20 September 2017: presentation of the Housing Strategy

July 2017: consultation with housing, construction and planning stakeholders to identify needs and proposals. The consultation produced over 1,200 proposals. It ended on 10 September.