In France, housing policies are creating vast numbers of empty cities

The Tour de l'Europe, Mulhouse, is a quarter empty. Image: Rh-67/Wikimedia Commons.

The continuous need for more housing is one of the few things most French politicians seem to be able to agree on. Both the Socialist Party and the centre right UMP argue that France needs to build at least 500,000 new homes every year.

That quota is never quite reached, but the idea still remains universally popular. After all, France is one of the EU countries that has traditionally built the most houses. In 2013, it built 5 per 1,000 people, compared to only 2.3 on this side of the Channel. This has been driven by a series of financial incentives – mostly centred around tax breaks – created both by the government of President Hollande, and by the Sarkozy administration which preceded it.

But this commitment to housebuilding has created a whole new problem. By encouraging the housing sector to build across the entire country, the government is creating vast numbers of empty cities.

Last week, an investigation carried out by Le Monde revealed that 7.8 per cent of all homes are currently empty, up from 6.3 per cent ten years ago. The problem is especially pronounced in 42 towns of over 8,500 dwellings, of which at least 12 per cent are unoccupied.

The most extreme example is Vichy, in the centre of France, where 22 per cent of homes – 4,700 of them – are currently empty. The town has become an affordable housing dream, as any request for council housing is filled in within two weeks, Le Monde notes, with claimants being offered “newly renovated flats on the lakefront”.

Nonetheless, the town's officials complain that they are being forced to build even more social housing this year – homes they absolutely do not need. Under current rules, French towns are required to have at least 20 cent social homes. Vichy only has 15 per cent.

Despite this building spree, housing in France has become increasingly unaffordable over the past 15 years, as house prices have doubled, and rents have increased by more than half. Over the same period of time, wages have gone up by just 30 per cent.

French housing is now some of the most expensive in Europe, just behind the UK. In 2015, a 70m2 flat would cost you around 7.9 times the average wage. In the UK, it's 8.5.

The problem is especially obvious in Mulhouse, a middle-sized town by the German and Swiss borders. The 37-storey high “Tour de l'Europe”, built in the 1970s, and one of Eastern France's most famous buildings, stands worryingly empty. About a quarter of the tower – around 50 flats – is now unoccupied. The emptiness has been blamed on rent and utilities prices, which are deemed to high for many to afford.

The Abbe-Pierre Foundation, which campaigns against precarious housing and social exclusion, released some more worrying figures earlier this month. Its researchers found that 3.5m French people are currently in precarious housing, including 2.7m who it described as in an “especially difficult” situation. In the past year, what's more, 1.8m people asked for affordable housing, but only 467,000 homes were allocated.

In other words, simply building more homes is an overly simplistic response to a complicated problem. For one thing, the state hasn't been building in the right places. Because demand is unevenly spread, some towns are bursting at the seams, while others are struggling to fill their existing buildings.

Nor have state subsidies been targeting the right homes. Most French help-to-buy schemes are focused on newly built housing; but even without such schemes, it often remains cheaper to buy pre-existing dwellings.

If you're struggling to get onto the French property ladder, an empty home in the wrong town, or a subsidy for one you can't afford, won't do that much to help you. It's not enough to build more houses: you need to think about who you're building those homes for.

 
 
 
 

“Without rent control we can’t hope to solve London’s housing crisis”

You BET! Oh GOD. Image: Getty.

Today, the mayor of London called for new powers to introduce rent controls in London. With ever increasing rents swallowing more of people’s income and driving poverty, the free market has clearly failed to provide affordable homes for Londoners. 

Created in 1988, the modern private rented sector was designed primarily to attract investment, with the balance of power weighted almost entirely in landlords’ favour. As social housing stock has been eroded, with more than 1 million fewer social rented homes today compared to 1980, and as the financialisation of homes has driven up house prices, more and more people are getting trapped private renting. In 1990 just 11 per cent of households in London rented privately, but by 2017 this figure had grown to 27 per cent; it is also home to an increasing number of families and older people. 

When I first moved to London, I spent years spending well over 50 per cent of my income on rent. Even without any dependent to support, after essentials my disposable income was vanishingly small. London has the highest rent to income ratio of any region, and the highest proportion of households spending over a third of their income on rent. High rents limit people’s lives, and in London this has become a major driver of poverty and inequality. In the three years leading up to 2015-16, 960,000 private renters were living in poverty, and over half of children growing up in private rented housing are living in poverty.

So carefully designed rent controls therefore have the potential to reduce poverty and may also contribute over time to the reduction of the housing benefit bill (although any housing bill reductions have to come after an expansion of the system, which has been subject to brutal cuts over the last decade). Rent controls may also support London’s employers, two-thirds of whom are struggling to recruit entry-level staff because of the shortage of affordable homes. 

It’s obvious that London rents are far too high, and now an increasing number of voices are calling for rent controls as part of the solution: 68 per cent of Londoners are in favour, and a growing renters’ movement has emerged. Groups like the London Renters Union have already secured a massive victory in the outlawing of section 21 ‘no fault’ evictions. But without rent control, landlords can still unfairly get rid of tenants by jacking up rents.


At the New Economics Foundation we’ve been working with the Mayor of London and the Greater London Authority to research what kind of rent control would work in London. Rent controls are often polarising in the UK but are commonplace elsewhere. New York controls rents on many properties, and Berlin has just introduced a five year “rental lid”, with the mayor citing a desire to not become “like London” as a motivation for the policy. 

A rent control that helps to solve London’s housing crisis would need to meet several criteria. Since rents have risen three times faster than average wages since 2010, rent control should initially brings rents down. Our research found that a 1 per cent reduction in rents for four years could lead to 20 per cent cheaper rents compared to where they would be otherwise. London also needs a rent control both within and between tenancies because otherwise landlords can just reset rents when tenancies end.

Without rent control we can’t hope to solve London’s housing crisis – but it’s not without risk. Decreases in landlord profits could encourage current landlords to exit the sector and discourage new ones from entering it. And a sharp reduction in the supply of privately rented homes would severely reduce housing options for Londoners, whilst reducing incentives for landlords to maintain and improve their properties.

Rent controls should be introduced in a stepped way to minimise risks for tenants. And we need more information on landlords, rents, and their business models in order to design a rent control which avoids unintended consequences.

Rent controls are also not a silver bullet. They need to be part of a package of solutions to London’s housing affordability crisis, including a large scale increase in social housebuilding and an improvement in housing benefit. However, private renting will be part of London’s housing system for some time to come, and the scale of the affordability crisis in London means that the question of rent controls is no longer “if”, but increasingly “how”. 

Joe Beswick is head of housing & land at the New Economics Foundation.