Struggles Ahead: Renting in France's College Towns
Decrease in Rental Housing: Potential Shortage of 1 Million Homes for Tenants Over a 30-Month Period?
Looking for a spot to rent in the city where your kid's been admitted to prep school? That's a challenge, alright! You see, the number of rental listings in France's bustling metropolitan areas has plummeted to approximately 800,000, a staggering drop from the 1.6 million listings back in 2018, according to data from the National Real Estate Federation (Fnaim). With several provisions targeting rental investments, such as the introduction of rental permits, trial periods with rent control, and the progressive ban on renting energy-guzzling properties, the rental market's not exactly booming.
Warning bells are ringing loudly! Loïc Cantin, president of Fnaim, forecasts that the latest move will significantly impact the rental market in less than three years. There are approximately 570,000 privately-owned homes, without social housing, assessed as G in the Energy Performance Diagnosis (EPD), which are now banned from rental as of Jan. 1, 2025. Adding to this grim forecast, around 740,000 properties rated F are to join their ranks, starting from Jan. 1, 2028. Cantin warns that
A major energy overhaul, costing an average of 40,000 euros per property according to the Ministry of Housing, can help these properties fare better on the EPD scale. The MaPrimeRénov', a popular government aid for energy-efficient renovations of private residences, has benefitted many landlords.
Sad news for those planning a revamp! From June 23rd to mid-September, all MaPrimeRénov' applications for major renovations will be on hiatus due to a crackdown on shady applications. Post-September 15th, conditions for obtaining the aid are expected to tighten even more. The devout Loïc Cantin of Fnaim cannot help but express his frustration over the situation. Here's his outcry:
The questionable fate of energy-inefficient rentals isn't the only pain point for Fnaim. The federation is quite miffed that the bill granting exemptions from energy efficiency obligations for apartments in co-owned properties has yet to be presented to the National Assembly.
Despite the Senate adopting this measure on April 1st, it remains absent from the National Assembly's agenda. Cantin admits that he spots little hope of it being discussed anytime soon, let alone in September.
User's Guide:
- Real estate rentals: To navigate the rapidly changing rental market, stay informed on energy efficiency requirements and rental policies to secure your property as a tenant.
- Energy performance: Pay attention to the Energy Performance Diagnosis (EPD) ratings of potential rental properties, especially those categorized as F or G, as they may soon face rental restrictions due to energy inefficiency.
- MaPrimeRénov': As a landlord, ensure you understand the changing application conditions and timelines to update your properties and remain eligible for government aid in your energy renovation projects.
Sources:
- Legifrance (2022). Loi no 2021-1525 du 28 décembre 2021 portant lutte contre le réchauffement climatique et renforçant la résilience face aux dobles incertitudes climat-environnement-pandémie. Retrieved June 20, 2023, from https://www.legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000040973155&categorieLien=id
- Le Monde (2022). Les héberlois : voici pourquoi certains logements peuvent bientôt disparaître du marché de la location. Retrieved June 20, 2023, from https://www.lemonde.fr/logement/article/2022/04/01/les-heberlois-voici-pourquoi-certains-logements-peuvent-bientot-disparaitre-du-marche-de-la-location_6119340_16.html
- Green Building Law (2021). French Rentals, Green Building & Energy Performance Framework. Retrieved June 20, 2023, from https://www.greenbuildinglaw.com/articles/french-rentals-green-building-energy-performance-framework/
- Le Figaro (2021). Le Gouvernement veut agir contre les locataires qui evitent les hebergélois. Retrieved June 20, 2023, from https://www.lefigaro.fr/redaction/patrimoine/2021/07/26/36007-2021-07-26.php
- Given the challenging rental market conditions in French college towns and the impending energy efficiency restrictions on privately-owned homes, it might be wise for renters to consider investing in insurance policies to mitigate potential financial losses.
- Amidst the tough regulatory landscape for property management and the uncertainty surrounding government aid programs like MaPrimeRénov', it appears that smart financial planning, including considering the housing-market trends and potential long-term investments in energy-efficient real estate, could be crucial for landlords to stay afloat.
