A Rant on the Short-Term Rental Laws in France
Volume XX, Issue 29
Apologies in advance for this rant! I’m really getting tired and fed up with the laws that govern property rentals. This is because we are faced daily with it as a problem, whether it’s from the side of the tenant or the landlord. Both are suffering and I’m having a hard time understanding why anyone needs to suffer at all.
Call me an anarchist, but the “straightjacket” that the cities are putting landlords in to rent or not to rent don’t appear to benefit anyone but the hotels and big corporations, as they certainly do not benefit the individual homeowner or person who simply needs a place to live…for a week, a month, a year or a lifetime. For some reason, they have been largely forgotten.
When you purchase a property for your own use or investment, in a multi-family building, then it’s a given that as one of the owners, you must abide by the rules of the homeowner association. Everyone has an equal voice in how it is to be managed. We expect to live by those rules and if the owners in the building wish to restrict “transient” residency, then by all means, they should be able to do so. But, how can the city or the country have the right to override the owners’ decisions by adding further restrictions? They do assume they have the right and they do take it, often very seriously and very restrictively, without thinking of the consequences.
The city administrators’ goal is to put more long-term housing on the market, considering the shortage certain cities are facing. I understand the need and the problem, but what I object to is the solution they have devised, by attacking the short-term rental market. While short-term properties may contribute to the shortage, it is by no means the only reason the shortage exists. In fact, much of it stems from the way landlords are treated as “the money-grubbing bad guys,” which is an incentive for not renting their property at all and just leaving it vacant while it appreciates in value with no investment to improve it. So, many properties sit vacant, rotting away, contributing to the shortage. I believe the authorities need to dig a little deeper into the real reasons they are faced with the shortages rather than use the short-term market as their “scapegoat.” I honestly believe they haven’t done their “homework.”
What I have witnessed from the fallout has not only hurt the landlords, but has also hurt the tenants. The ones that are benefiting are the large establishments, like the hotels and the corporations which can afford to buy up entire buildings and convert them into what is known as “aparthotels.” This leaves the average homeowner “holding his own bag” with no revenue to show from his investment. You would think that a socialist democracy of this kind wouldn’t be so quick to let the little guys suffer while the big guys are “laughing all the way to the bank.” It surprises me they are so shortsighted.
We are faced daily with clients seeking a rental property and having a struggle finding properties willing to accept them as tenants, because of the laws that punish the landlords, and end up acting against them in this way. Then, there are owners seeking ways of filling their properties to cover their costs of ownership, being left empty-handed with nothing to show for their efforts.
The lawmakers have somehow forgotten that people have a broad range of needs. One of which that has grown exponentially since Covid-19 is the need for shorter-term accommodation—less than one year. Now that we can work remotely, we no longer need to be in any one place for long periods of time, so shorter-term rentals can be ideal…but they are dwindling here in France as the laws prevent home owners from doing what they should be able to do: let anyone they want stay in their own property!
Keep this is mind when battling the local regulations! Don’t let anyone tell you that you can’t let anyone you want stay in your own property! And the only difference is whether they have paid to cover your expenses or not…call it “rent” or call it a “reimbursement of expenses,” but there is a cost to home ownership and someone must pay for it, you or the other person staying in your home, friend, relative or tenant.
In France, renting is considered a commercial activity within the meaning of town planning. It is differentiated from those properties intended for housing. This is confusing because how can it be one or the other? It’s not “black or white.” Surely, renting falls into both categories? But, from a legal standpoint, the authorities have decided that it’s more about the money than the housing. I can’t wrap my head around this.
In cities of a population of 200,000 or more, it is compulsory in France to change the usage of the premises from residential to commercial to legally accept short-term rentals, but not long-term rentals. So, what is considered short-term? Even this is a good question, as it could be ambiguous. Most consider short-term for vacation use only, but in today’s world of transiency and the ability to work remotely, does that definition stand? And how long is short-term? One night? One week? One month?
A change of usage is no easy task, either. To legally change a property from residential to commercial requires the permission of the building as well as the city. Good luck getting that to happen! We must be dreaming.
France is not alone in this and must abide by the laws of the European Union. Certain French local regulations must be reworked to be in conformity with European law. Article 9 of the Services Directive aims to ensure an adequate supply of housing for long-term rental at affordable prices. This criteria must meet the justification of the city regulations, made obligatory by the European law.
Paris isn’t the only city faced with the problem. Eleven French towns fall into the category of more than 200,000 inhabitants governing these laws: Paris, Marseille, Lyon, Toulouse, Nice, Nantes, Montpellier, Strasbourg, Bordeaux, Lille and Rennes.
As you may recall, I was just in Lille taping a House Hunters International episode, about finding a property to rent for a young Kansas couple. Lille (and the entire area including Lomme and Hellemmes) has adopted a rule to limit short-term rental accommodations, by virtue of an authorization scheme granted on the condition that the property that was converted into furnished tourist accommodation is compensated for by the creation of a dwelling in a place in the city which has another purpose. (Download a PDF version of the actual directive)
Try that one on for size! This means you’re investing in two properties; not just one. In Nice, permission to change the usage to accommodate tourists is subject to compensation through the creation of another property in a place intended for economic activity. This is true in Paris, too, and they justify it by the so-called shortage of long-term rental housing in the cities. Strasbourg and Lyon are subject to the same rules.
In Nice, you may rent short-term for up to six years if you have permission of the building and the city. If your application is rejected, you can appeal the decision. While the decision is under appeal, which could take a very long time, you can legally rent! Put that in your pipe and smoke it!
Why am I on this “soapbox?” Because I believe that the city administrators are short-sighted and misguided. I don’t believe they’ve done any real studies to understand what causes their housing shortages, yet have chosen to attack Airbnb and the vacation rental market as an easy out. The public is mostly on their side because there are fewer investors than there are permanent residents who favor the restrictions. These are the folks who complain about the “transients” who come in and out of their buildings with suitcases, making noise and who they believe they can’t trust. But, transiency is growing as we no longer need to go to work in an office miles from home.
Just take me, for example. I go in and out of my building almost weekly with suitcases, yet I’m a “permanent” resident…who travels a lot. And I’m no different than most people I know! In today’s world, I believe that ultimately the transients may outweigh the permanents.
You understand, I’m just blowing off steam here because this rant will go on deaf ears, but it’s affected our clients and business adversely from the beginning and I know no one it benefits. While the little guys, who are just trying to cover their expenses by offering their property to visitors during a time it would normally be vacant, are prevented from earning a few extra bucks and make some newcomer to France happy, the hotels are raking it in, as are the developers who can afford to buy up whole buildings and convert them into cookie-cutter apartments that lack personality or charm.
The cities are happy with hotels and aparthotels because they can rake in tax money, but if they were smart about it, they could be financially benefiting from the short-term apartments, too. It’s pretty pathetic if you ask me, and I have better ways of solving the problem.
What if everyone was allowed to have only one property they call a short-term rental, not 10? And what if that property had to be registered and comply with certain standards? And what if there was a system to rate the accommodations, like the hotel star system? And why not allow the building owners to have their own say in what they do with their own property, not the city? I’ll bet they would be even more restrictive than the city if they governed themselves…especially those in less touristed neighborhoods.
So, in the end, the city would have a well managed, well organized block of tourist (call them “transient”) accommodations that are designed as glorified hotel rooms (and not just a bed in someone else’s primary residence) that enhances tourism, makes their visitors feel like they’re “at home” and ultimately satisfying all parties, including reducing the housing shortage by not forcing these same properties to remain vacant and useless? It would encourage property investment and the upkeep of the buildings to maintain their properties’ values and prevent the city from becoming a slum! There are many other ways to “skin this cat” that they haven’t thought of, or wanted to consider. And I don’t get it.
One last note: this isn’t just about tourist accommodation. What about those who need a few months of accommodations? Let’s say you’re renovating your apartment and need a place to live? What if you’re separating from your spouse and need to a place to live…for just a while? What if you want to live in many different places during the year just because you can?
The laws don’t consider these people, but they should. President Emmanuel Macron created the Mobility Lease which is great for people traveling on business or education, but what about the rest of us who are retired and just want a 90 day visit? We can be in France for 90 days without a visa, but we’re not entitled to housing! And why prevent the landlord of this type of accommodation from taking a security deposit? (The law doesn’t allow it; can you imagine that!?) So, why is the landlord being punished in this way?
Yep, I’m full of questions. That’s because I can’t make sense of what the authorities are trying to accomplish. I watch a tangled web of undecipherable laws baffle us all and that are ultimately counter productive to what they are trying to achieve.
It’s just plain stupid.
The Adrian Leeds Group®
Adrian in full rant mode
P.S. Last night we co-hosted the North American Expat Financial Forum Quarterly Seminar devoted to the topic of “Currency Opportunities & Social Security for US Expats Abroad.” It was a fun and informative session. If you missed it last night, you don’t have to miss it now! Tune in to YouTube to see and hear the entire one-hour with Brian Dunhill, Kam Somal, Josh Madden, Anya Berezow, Patty Sadauskas and myself for an education on these important issues!
P.P.S. When we search for properties on your behalf, we review all of the building bylaws to determine your rights as a landlord and to ensure that if you wish to rent a furnished apartment, you can. We also have staff who can assist you in submitting your applications for short-term rental. So, don’t be afraid of the laws! Just let us help you manage them or find ways around them to suit your needs! There are always solutions, even if the city administrators didn’t think of them!