Feargus O'Sullivan is a contributing writer to CityLab, covering Europe. His writing focuses on housing, gentrification and social change, infrastructure, urban policy, and national cultures. He has previously contributed to The Guardian, The Times, The Financial Times, and Next City, among other publications.
Rents across the city are going down, but not everyone is complying.
Since rent-control legislation was introduced in the French capital in August, cases of tenants suing their landlords for illegally high rent have started trickling through the courts, with interesting results. One case reported in Le Parisien involved a 33 square meter (355 square foot) apartment in Le Marais rented out for €1,990 ($2,161) a month—that’s €550 ($597) above the legal rental ceiling imposed by the new law. The landlord’s justification for this higher price was the apartment’s roof terrace, offering a view across the neighborhood’s rooftops. The court ruled this unfair, and the tenant has since got a chunk of their money back.
This sort of case might suggest Paris is getting a major rent overhaul. It is, in fact. Since the beginning of 2015, the average cost of new rentals in Paris has gone down by 1.9 percent. This is partly thanks to new rental stabilization laws, which are similar to those introduced last year in Berlin. Since August 1, a Paris rent observatory has calculated median rents for each area, classified apartments by size, age, and quality, then set a rent ceiling.
Clearly, something is changing, but as a new report by French real estate agents MeilleursAgents suggests, the law’s overall effect is still as yet unclear. It’s so far proved neither a solution on its own, nor completely ineffective. Because while rents as a whole are going down, the new law is also being widely ignored.
This is partly because it’s up to tenants to take action against overcharging. So far, not many are doing so. Between the introduction of the rent-control law last August and the end of January this year, the number of petitions for rent reductions received by Paris courts totaled just 28. In an interesting twist, the average age of petitioners for reductions was 25, suggesting that younger Parisian tenants are better informed, more proactive, or both. This allows many landlords to disregard the rules with impunity.
Far from completely, mind you. Figures reported in Le Monde suggest that the large majority of Paris rents come in below the legal ceiling. The districts with the most law-abiding landlords are an eclectic group including both the ethnically diverse, low-income Goutte D’Or neighborhood (where only 12.2 percent of rents are above the ceiling) and the elegant, somewhat stuffy area around Parc Monceau (where 17.4 percent of rents flout the law).
Predictably, it’s in fast-gentrifying areas where the rules are being ignored most systematically, such as in the area around the Bois De Vincennes (where 65.8 percent of rents break the law) and Le Marais’s northern section (where 61.5 percent of rents break the law).
What marks out the complying districts from the non-complying districts is consistency of wealth or poverty. The Goutte D’Or’s streets tend to offer housing of similar standard throughout. Around the Bois de Vincennes there are both very wealthy areas and considerably poorer ones. This tends to skew the area’s overall median rents lower, making prospective tenants for the better areas more motivated than others to ignore the rent ceilings.
Even here, however, the number of unusually high rents is going down. According to MeilleursAgents, before the law was introduced, 45 percent of rents across all Eastern Paris were above the rent ceiling. Now that figure is 29 percent. Not disastrous then. But the question remains: What has allowed that 29 percent to slip through?
Part of the issue is slipperiness on the part of landlords, who will list a mezzanine, a new kitchen, or as mentioned above, a roof terrace as a justification for a higher rent even though the regulations don’t strictly back them up. The prospect of a court case is enough to put many tenants off challenging abuses. Often, it won’t come near that possibility anyway, because the demand for property is high enough to encourage tenants to put up and shut up. As Alex Maudet, a representative of France’s National Housing Federation put it to Le Parisien:
“Given the imbalance between supply and demand in Paris, selected tenants feel privileged, as if they had won a contest. They are therefore unlikely to turn against their owner.”
If the number of landlords ignoring the law were to be further reduced, the city itself might need to police compliance rather than leaving it to tenants, or at least make the complaint process far easier. This in itself would cut law-breaking, but then again, it still might not be enough to prevent the creation of a shadow market where under-the-counter payments secure access to the best apartments. In areas where fancy streets abut plainer ones, there also needs to be more fine-tuning of the rent ceilings.
The ultimate solution to creating a climate where the laws work is a greater supply of affordable housing. Paris knows this and is already going big. It’s investing €3 billion ($3.26 billion) in new social housing over the next six years. In the meantime, it’s also moved to prevent wholesale low-income displacement from the city center by creating a right-of-first-refusal for the city at 257 key addresses, so that Paris itself is able to buy apartments for conversion into social housing. Will this combination of measures be enough to get Parisian housing costs under control over the long-term? We’ll have to wait and see.