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Paris Property Rentals — Finally Rupturing

The property rental issue in Paris is finally started to implode. I’ve been hoping for this to happen for about four years now — as one way or another, like a blemish that needs to come to a head before it ruptures and heals, so is the problem with short-term rentals and their current illegal status which has reeked havoc on owners and renters alike.

27-6-13signondoorThe neighbor’s signThis past week, a friend renting an apartment in Le Marais for her few-week stay was harassed by a neighbor who posted a sign on her door on three separate occasions…just to make his point, claiming that “renting furnished apartment in Paris on a daily or weekly basis is strictly prohibited” and to “not speak too loud and keep the volume of your television at a reasonable level to respect our lives.”

It frightened her, naturally, but it wasn’t the renter’s responsibility, as it was clearly the owner’s, but the neighbor took it upon himself to harass the unsuspecting renter!

As it turns out, I happen to know several people who live in this same building and rent their properties. They have all been at the mercy of just one or two of their neighbors who have denounced them to the city for renting their property, even though it is not against the rules of the building. These are people who have taken the law into their own hands and have made their neighbors’ lives living nightmares.

My answer to this one occasion is for the apartment renter and owner to file a complaint with the police for harassment and add this illegal behavior to their ongoing defense against the city regulations. It is not the responsibility of the neighbor to enforce the law — only to uphold the rules that might apply within the bylaws of the homeowner’s association itself of the building.

Meanwhile, the local papers are ripe with articles the last couple of days about this issue — and it seems there may be ‘light at the end of a tunnel’ for property owners who rent their apartments when they are not using them. With hope, the city is just coming to recognize the sheer lunacy of the laws and the inability to enforce them as well as the horrific consequences of their actions.

27-6-13 Parisien article3Article in Le Parisien with Anne MortonYesterday, Le Parisien published several articles by Christine Henry. One of them was centered on my very old and good friend of mine, Anne Morton. She was asked to be interviewed, unsuspecting that the interview was targeted to the ownership of property by foreigners and the issues surrounding the rental laws.

After many years, Anne retired and eventually moved from San Francisco to live in Paris full time and therefore no longer rents her apartment. There are many people like her, who purchase a “pied-à-terre” in advance of full retirement hoping to use it part of the time, rent it when it’s available and ultimately move into it when they are fully retired. People like Anne cannot afford to own a second home during the transition period without some sort of income to offset their expenses.

In another article in Le Parisien by Christine Hencry, with a headline touting a number as large as 193,000 vacant properties in Paris, it places the blame for this large number on second homes owned by the French or foreigners. The communist and socialist leaders are proposing taxation on these properties over and above what is now imposed.

27-6-13 Parisien article-1What they fail to realize (in my opinion) is that many of these properties may be rental properties that cannot be claimed as such because of the current rental laws prohibiting leases of less than one year! At least the article didn’t address that idea.

Today, Le Monde has another point of view. In an article titled “Paris s’inquiète de la multiplication des locations saisonnières” (“Paris is concerned about the proliferation of rentals”) by Delphine Roucaute, owners are discovering how easy it is to rent their properties, with such Web sites as Airbnb and that more and more are taking advantage to earn revenues. This is no surprise, since the demand is high. The INSEE (L’Institut national de la statistique et des études économiques) reported in February of this year that by 2020 there will be a need for 20,000 to 30,000 additional hotel rooms, including 7,000 for Paris alone. Therefore apartment rentals are a good alternative. And in addition, the article notes that Airbnb alone is responsible for 185 million euros injected into the economy between 2012 and 2013!

Meanwhile, city officials don’t want Paris to become like Venice — empty of residents and there only for the benefit of tourists. The city benefits from tourism, but at the detriment of the inhabitants. The city hall estimates about 20,000 furnished rental properties in Paris, but they also estimate that there may be more they don’t know about.

Owners are supposed to have special permissions to rent their properties seasonably, but compliance to obtain these permissions is near to impossible for a variety of reasons and therefore almost no one has officially changed the ‘usage’ from residential to commercial.

One landlord was convicted in April 2012 for having rented four apartments short-term and fined 15,000€ — the first of 50 convictions. But, the city is becoming aware of the limitations of the current regulation which considers anything less than a one-year lease (or nine months for a student) a seasonal rental. They realize that there is something between three days and one year and that there is a need for rentals of three to six months for educational exchanges and professional internships.

If the officials will look at it from the side of the tenant, they will see the laws are against all rights: it means that anyone who wants to reside in Paris less than one year has no right to housing! I doubt they are looking at it this way, but that’s the way it works. The laws affect more than just tourists!

The article cites Jean-Marc Agnes who created his agency, “My Apartment in Paris” in 2002. It manages 120 apartments and supports 12 employees. In 2010, he created the “Syndicat des professionnels de la location meublée,” a union of professional rental agencies representing the interests of 40 agencies.

For him, the solution lies in better management of the profession and hopes to work with the city to solve the housing problem without causing such disruption to the rental market for individual owners and tenants. In recent months, the union has approached the Ministry of Housing, to work together to solve the problems. The Ministry has already shown its intention to include the issue of rentals in the new proposed law “Duflot 2,” but the proposals remain unclear.

We believe that the battle will continue between the city and the landlords until all parties can see the issue more clearly: There is a need by the tenants for housing of less than one year that won’t go away. There is a need by the landlords to generate a revenue to support their investments that won’t go away. And there is a need by the city to fill vacant housing that won’t go away.

Something’s ‘gotta’ give! INHIBITING the rentals of less than one year is definitely NOT a way to fill vacant properties! Perhaps if the city allowed landlords MORE FREEDOM to rent as they like and pay LESS tax, more apartments would be occupied and the housing shortage would be reduced! But of course, this is a capitalist way of thinking.

How would you solve the problem?

A bientôt,

ADRIANbyPZAdrian Leeds

Editor, French Property Insider & Director of The Adrian Leeds Group, LLC

Email:    [email protected]

 

 

 

 

27-6-13P.S.LeNotreDameP.S. You can own a piece of Paris and it’s fully legal! Le Notre Dame is a fractional ownership property on the Ile de la Cité, where life in Paris began centuries ago. This old-world, elegant studio apartment is just a few steps away from one of the world’s most important cathedrals, Notre Dame, with the windows providing a perfect and beautiful view. There are only a few shares left — don’t miss this opportunity! For more details on this an other fractional ownership properties, visit French Property Fractional.

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