Take a Stand Against Big Business Driving Out the Little Guy Entrepreneur in the Paris World of Real Estate

The city is not going to get what they bargained for…or maybe this IS what they want?

The rental laws in Paris which prevent secondary residences to be leased less than one year seems to be working for the city to put vacation properties back on the market for long term residential living. Owners are either 1) complying by converting them to long term rentals at greatly reduced rates, 2) selling their properties or 3) stopping the rentals in order to avoid the heavy fines imposed for continuing the practice after being notified by the city.

This means that 1) property investors are losing money on their investments — as it’s quite difficult to cover your costs at the current long term rental rates, 2) again losing the value of their investments, as prices are down, capital gains tax is up and if they can sell at all, thanks to the current glut of property on the market and 3) that for the owners who can afford to  keep them without renting them, the properties are vacant most of the year.

The other big loser is, of course, the average short-term (less than one-year) renter who needs proper accommodations, rather than a hotel room or someone else’s primary residence (which can legally be rented short term up to four months a year), to live in or enjoy during their stay in Paris — whether it be for three nights or three months. In fact, you have the right to be in France three months without a visa, but you are not entitled to housing in the City of Light. Ironic, isn’t it?

As the number of privately-owned apartments designed for short-term rental and occasional use by its owner diminishes, thanks to these laws intended for the good of the Parisian resident, a new crop of monied entrepreneurs are seizing the opportunity to fill the void. This is the law of supply and demand.

In this week’s press, it was announced that the Ascott Limited is opening a second luxury “apart’hotel” in Paris: The Citadines Suites Arc de Triomphe Paris.

Congratulations to the big corporation who can afford to spend €26 million to renovate and revamp the building to satisfy the regulations imposed on the city, while the little guys — the individual investors who trusted Paris with their hard-earned savings, as well as the visitor who wants to live in Paris like a real Parisian — suffer and lose.

ACitadines Arc de Triomphe premiere suitesccording to the publicity put out by the Citadine’s PR office, the apartments offer all the comforts of home and a host of other amenities in a great location for business and leisure guests. But it’s not cheap! As a special offering to celebrate the opening of the new Citadines Suites Arc de Triomphe Paris, the opening rate is €191 per night for a 37m2 “Superior Suite.” The offer is valid until March 31st of this year and includes breakfast. (Note, this is ‘low season.’)

Parler Paris Apartments vacation rentalCompare that with a luxury one-bedroom apartment of comparable size in Le Marais that we advertise on our site for low season is €125 per night. Sorry, breakfast isn’t included. So you can either have it in the luxury of your own apartment or at the café downstairs, but it will not have cost you and additional €66 for the privilege. The apartments are only as large as two-bedrooms that can accommodate up to four adults and two children. This means larger families are out of luck. Again, the average renter is losing out.

The corporation (CapitaLand) is one of Asia’s largest real estate companies. It is headquartered in Singapore and “the company’s businesses in real estate and real estate fund management are focused on its core markets of Singapore and China.” Great. Just look at who’s making all the money! Certainly not the local entrepreneurs…or even France for that matter!

A few of my colleagues commented on this new development:

“Look who benefits from the new laws? Quelle surprise! Did I say hotel lobby? This may be ‘la preuve.’ Once again, France says to entrepreneurs: ‘You can suck it.'”

“This truly is infuriating because it is so hypocritical. As long as the biggest fattest establishment capitalists are at work, then the government doesn’t object. They don’t seem to mind that all these apartments have been permanently removed from the stock of available Paris apartments for Parisians. Unlike the common short-term rental apartments that could always switch back, these will never return. They’ll be out of the reach of Parisians forever!”

“Whether well-meaning or not, these naive government policies create an ideal environment where opportunistic big business can thrive (who ultimately hurt exactly who the government is trying to protect). They’re playing the mayor like a harmonica.”

“Paris will look like New York before long: big money controlling massive amounts of property, forcing up values, driving down availability as government controls and fines the little guy. France needs to grasp the notion that entrepreneurs keep the country vital and enterprising individuals are not the enemy.”

If you agree with what our colleagues have to say, then take a stand! Write your newspapers (New York Times, Wall Street Journal, Le Monde, magazines (Time, The Economist, Forbes and TV stations (CNN, France 24) and let them know there is another side to the story!

How about posting your messages on Facebook, Twitter and other social media? Do you have a blog or newsletter where you can voice your opinion? The only way this message will be told is by enlightening the press!

We do have a voice! Use it!

A bientôt,

Adrian Leeds

Editor, French Property Insider

Email: [email protected]

 
P.S. If you have an apartment in Paris or Nice and would like to rent it long or short term plus have it managed by a professional team, let me introduce you to the associates of the Adrian Leeds Group who can do it all for you — worry and hassle-free! For more information, contact [email protected]