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Rent control makes a controversial comeback in Paris

Christophe Archambault, AFP | A view of Paris on December 12, 2018

The French government published a decree on April 5 paving the way for Paris to reintroduce citywide rent control, in a resounding victory for housing advocates.

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The French capital first imposed limits on how much landlords could charge tenants for rent in 2015, in an effort to tackle the rapidly rising cost of housing. The measure, however, was short lived. In 2017, a judge overturned the initiative on the grounds it should be applied throughout the region.

Following the decision, Paris officials vowed to bring rent control back to the city. A government decree issued on April 5 has now made that possible.

The order brings into force legislation voted in November 2018 (known as the Elan law), which grants cities the right to impose rent control, under certain conditions, as a means to protect tenants and create more affordable housing.

Because Paris’s city council already approved a measure to reintroduce the practice in December, all that remains is for local authorities to set caps on how much landlords can charge.

Otherwise, rent control regulations in Paris will work more or less like before. Limits will only apply to new leases (first-time rentals or new tenants), while the price of rent will be calculated in euros per square metre, based on a property’s location. A studio in the affluent 6th arrondissement (district), for example, will cost more per square metre than an apartment of the same size in the 20th arrondissement, which is largely working class.

Landlords will also be able to charge more than the mandated amount for special amenities, such as an elevator or a sweeping view of the Eiffel Tower. But individuals or companies found in violation of the city’s regulations risk a fine of up to €15,000.

‘A disservice to tenants in the long term’

The return of rent control in Paris comes as the city struggles with an ongoing housing crisis, spurred in part by soaring living costs and the short-term rental market. Just last month, Paris was ranked the world’s most expensive city – alongside Hong Kong and Singapore – by the Economist’s Intelligence Unit.

“Rent control helps to stop these phenomena,” Ian Brossat, head of Paris’s housing authority and a member of the Communist Party, told Le Parisien in early December. “It was very effective in the capital when it was implemented between 2015 and 2017, before it was overturned by an administrative court.”

Yet some real estate experts have refuted Brossat’s claims, warning that rent control is not the answer. Instead of easing Paris’s housing crisis, they said it could exacerbate the problem by creating a dearth of rental properties.

“By controlling rents, the government is creating a climate of distrust with landlords by accusing them of being the evil behind France’s housing (crisis),” Jean-Marc Torrollion, president of France’s National Real Estate Federation (FNAIM), said in a statement on Friday.

“It is also misleading for tenants. The loss of income will lead private landlords to flee the market, which will be a disservice to housing seekers in the long term. In the absence of a strong, private rental sector, they will no longer be able to find housing.”

But it would appear there is growing interest in the practice across France. In December, the mayors of 26 cities in the Paris area – many of whom belong to the Communist Party – voiced their support for rent control.

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