Hurting for Housing

The housing crisis in Paris is acute — hence the attempts to turn vacation rentals into full-time residences with ordinances that prevent leases of less than one year. The estimate is that there are 40,000 vacant homes in Paris. While foreign owners are regularly blamed for owning properties used only a few weeks a year, these do not largely contribute to the problem, as most are primarily vacation rentals, which are, in effect, occupied, normally at least 70% of the year.

So, why are so many vacant? One simple answer, which in my opinion has yet to be addressed: the laws favor the tenant, not the landlord, and therefore it’s not all that desirable to own property…unless of course, you can rent it in a way that prevents the tenants from squatting without paying the rent.

There are other reasons, too, but they are desperate to house the 130,000 people living on the streets or in substandard housing and are now ‘grabbing at straws.’ One of them about to be affected, is the illustrious 400 year-old Place des Vosges — Paris’ most expensive address.

No official records can determine the exact number of vacant buildings, but EDF, the electricity company, estimates the 40,000 homes and offices which have been disconnected from service for an extended period of time. The housing authorities throw out numbers like 120,000, without any real basis, just to exaggerate the need, but there is no way to know for sure.

“Occupying prime addresses in Paris, the vacant buildings include apartments, residences and buildings belonging to insurance companies, banks, rich private owners and even the state itself. The sizes vary, though few are as big as the building belonging to a French finance company Société Foncière Lyonnaise, which has been vacant for two years and has an area of 37,000 square meters.” (France24.com)

At 1bis Place des Vosges, this 1,500 square-meter residence, once the the birthplace of celebrated aristocrat Madame de Sevigné, has been vacant since 1965 and is owned by an heiress of a former French bank. Squatters took it over who were evicted in 2010. It has been locked up ever since with steel panels installed over the 17th-century doors and windows.

Some experts believe that the increase of the price of property is another reason landlords hold on for many years just allowing for appreciation of the property to eventually make them rich. But I contend that this is a poor excuse. with the new capital gains tax increases, there is even less incentive to sell their holdings. World War II left abandoned property, as well. Owners fled, leaving their homes behind, never to return.

The city is facing opposition to their push to convert the vacant properties to social housing from landowners and officials. The mayor of the 8th arrondissement has said on record that his “super chic area” was not suitable for social housing. And what do you think of Place des Vosges as a spot for low income families…living next to the likes of Dominique Strauss-Kahn and Jack Lang?

Here’s how the government is proposing to fix their housing problem: amend two existing laws that will allow the requisition of vacant properties. 1) Amend the 1945 order (during World War II) giving governments the right to requisition vacant properties currently used as ‘squats’ for up to seven years where the owner is to be compensated at 5€ per square meter per month. 2) Amend a law enacted in 1998 that enables local council to take over properties left vacant for more than 18 months.

The laws have been seldom enforced, although during the 1960’s, 120,000 properties were requisitioned compared to 1195 when President Jacques Chirac used it to recover 1,200. Officials say there are too many loopholes from which owners can escape — one of which is if works are taking place, and all the landlord needs is an invoice from a contractor as proof.

The new socialist administration is adamant about fixing this very serious problem, but personally, I don’t think they’re going about it in the right way. Until they make the rights of landowners in balance with their occupants and until the profits are worth the hassles of ownership, quite honestly, I don’t think they will ever solve this problem and the foreign owners may continue to bear the burden of their own undoings.

A bientôt,

Adrian Leeds
Editor, French Property Insider

Email: [email protected]

 P.S. Next week, FPI is taking a Thanksgiving Day break. Enjoy your families and your roasted turkeys, wherever you are!

P.P.S. To our New York residents, mark your calendar for Monday, November 19th for a striking photography show/fundraiser for Sandy relief from 6-9 p.m. at 97 Allen Street at Delancey. Original prints by photographers from all over, including Erica Simone, will be sold for $50 with 100% of the proceeds going to the Occupy Sandy + Alison Thompson Rockaway Relief Center.