Effects of rent control in Paris, Lille, Lyon, Bordeaux and Montpellier

Does rent control really benefit households? Has it, as its opponents predicted, restricted rental supply in markets where it was already unable to meet demand? An evaluation report from the Housing Ministry was expected in late 2023. Ultimately it should be revealed no earlier than 2026.

Based on official data and statistics provided by various private actors, World However, it is preparing a list of the situation in five big cities where there are already fare caps: Paris, Lille, Lyon, Bordeaux and Montpellier.

First observation: The implementation of the framework has more or less coincided with a slowdown in growth in average rents per square meter in the three cities. In Paris, where the system was implemented in 2015, then suspended in 2017, “When the first phase of capping was canceled we saw a very rapid increase in fares”, recalls Manuel Domergue, director of studies at the Abbé Pierre Foundation. As soon as it was established back in 2019, “They began to stagnate or decline again”he adds.

A similar slowdown in fare inflation in Lille, where the system, which was also canceled in 2017, has been re-implemented since 2020, as well.in Lyon, which adopted the framework in 2021,

For other cities, it is difficult to judge: Bordeaux only implemented the system in the summer of 2022, and data for 2023 from the local fare observatory is not yet available. In Montpellier, prices are already stable since 2020, i.e. two years before the establishment of the structure,

Low inflation and “rent gradient”

Where it has been observed, the slowdown in growth has undoubtedly been For management and weak development fare reference index (IRL). “The spikes and drops in rent levels in stressed areas are often strongly linked to the IRL”Explains Clément Pavard, study and observation project manager at the National Agency for Housing Information (ANIL).

Calculated each quarter by INSEE based on inflation, the development of this index creates the maximum level of annual increase in rent that an owner can exercise. In 2020 and 2021, It is often below 1% And due to low inflation, it sometimes came close to 0%. Then, from mid-2022, The maximum variation in fare is capped at 3.50% by “Fare Shield”A lower rate than the increase in consumer prices.

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