What can you do when a once socially mixed neighborhood starts turning into a “ghetto for the rich”? Quite a lot, according to the city of Paris. As part of a massive home-building drive, the government of France’s capital has just announced a plan to stop housing displacement in central neighborhoods. It might just be the most radical Europe has yet seen. Earlier this week, the Conseil de Paris published a list of 257 addresses (containing over 8,000 apartments) that the city would have a "right of first-refusal" to buy, in order to convert to subsidized housing. Located in areas that are being gentrified, the city’s plans would both increase subsidized rental options and ensure that at least some housing in these areas remains affordable to lower- and middle-income residents. The plans operate within existing laws rather than creating new ones—but as you can imagine, real-estate professionals aren’t exactly delighted with the proposals.
The nuts and bolts of the plan are as follows. When apartments at any of the 257 addresses come up for sale, they must by law be offered first to the city. The apartment should still be sold at the market price —but the price offered would nonetheless be decided by the city, not the seller. If the landlord doesn’t like what’s offered, he or she can appeal to an independent judge to have it re-priced, or can withdraw the property from the market. What the landlord can’t do, however, is sell the apartment on to someone else without the city having bowed out first.
The broader social-engineering goals here are clear to anyone familiar with Paris when you look at where the addresses are distributed on the map. Typically they are in formerly working-class neighborhoods in northern and eastern Paris—Ménilmontant, the slopes north of Montmartre, the eastern end of the Bastille—where lower-income residents are being displaced. In places, the list even reads a bit like a gentrifiers’ streetfinder, with addresses on busy, broadly hip café and restaurant strips Rue Oberkampf, Rue Jean Pierre Timbaud, and Rue de Charonne. According to mayor’s aide Ian Brossat, the move is about:
Choosing diversity and solidarity, against exclusion, social determinism and the centrifugal logic of the market. It also aims to reduce inequalities between the east and the west of Paris in particular, developing social supply where it is insufficient.
The plan’s ambition will come at a cost—literally. If the city is genuinely going to pay market prices, the plan could be expensive, which is why it has set aside €850 million ($1.05 billion U.S.) for purchases. In reality, as this is a right of first-refusal rather than an outright purchase plan, only 100 or so apartments may be bought up during current mayor Anne Hidalgo’s tenure. The idea is essentially to give Paris the ability to act as a social-mix monitor, steeping in to prevent social segregation in the public interest if they feel it is under threat.
Whether it actually works remains to be seen. Parisians voted in the current mayor with a healthy majority knowing such moves could be in the cards, but Paris’ real estate industry is aghast. They fear that the measures could discourage buying and selling in an already sluggish market. It’s true that the measures come at a time when Paris rents are actually going down: After years of steady rises, Paris prices actually fell by 2.8 percent in 2014’s first quarter. Real-estate brokers also claim that that prices set by the city may still oblige owners to sell at sub-market prices. The mayor of Paris’ 18th arrondissement, which hosts the largest number of addresses on the list, has also made a plea for the city to focus on middle-income Parisians, who he alleges are the “great forgotten ones." The city’s self-expressed intention, however, is not to displace existing residents from these addresses, but to ensure that they remain safe from landlords bent on evicting them and redeveloping their buildings.
Even for those who are broadly supportive of the plan, there’s still a big question: Is setting aside such a large sum to buy potentially expensive property really the best use of public funds? Couldn’t the money could be used to actually build more apartments elsewhere?
For this one at least, the city has an answer ready. The right of refusal plan is just one part of a massive housing push planned for the next six years, one which will see 10,000 new apartments built every year, with 70 percent of this total made up of subsidized housing. The overall budget is €10 billion ($12.3 billion U.S.), and comes alongside plans to convert office space into housing and relax some height limits for public buildings. The high targets are possible partly because the city is working with the Paris transit authority RATP to free up development land. Using a potential maximum 9 percent of this budget for right of refusal plans doesn’t seem excessive.
We’ll have to wait a decade or so to see if Paris’ new plans genuinely succeed in making it a more liveable, diverse city. But in a world where city after city is throwing up their hands and doing almost nothing to combat displacement, exorbitant housing costs, and their negative effects, it deserves credit for really trying.