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.

 
 
 
 

What’s the constitutional status of the Isle of Man, then?

...what? Image: Google Maps/CityMetric.

Amidst the tumult of Brexit negotiations, away from questions about the integrity of the Union itself being asked by wearied bureaucrats in Edinburgh, Belfast, Brussels and London, the constitutional uncertainty of our times has washed up on the shores of the Isle of Man. Now it threatens the slumber of policymakers in Douglas, too.

The ten-by-forty mile island in the Irish Sea is best known internationally for its annual TT motorcycle races and tax haven status. If you haven’t been you should go: the variety of scenery is breath taking, as are the economics. Lamborghinis emerge from the back of slate cottages, a seaside dwelling can set you back more than an Edinburgh duplex, and the gilet prevalence index is off the charts in certain localities.

The reason for the disconnect is the constitutional relationship between the Isle of Man and the UK. For centuries the island supplemented threadbare revenue streams from subsistence farming and fishing with a robust smuggling sector. The IoM government homepage clearly, maybe even proudly, states that it has never been part of the UK: in the 1700s plans to buy it out and make it part of England were shelved after local unrest, while the current arrangement of Home Rule dates to the early 1800s.

Today the IoM government is based in Douglas, the island’s largest town. Its funding comes through a revenue sharing agreement, the “common purse”, with tax gathered locally on behalf of London and returned to the island according to an unpublicised formula. The agreement has been a source of contention for about as long as it’s existed, but ire has grown proportionally with the island’s pre-eminence as a tax haven. Its detractors point out that the UK consistently gives back to the IoM government more than it gathers, effectively subsidising the island’s status as a tax haven; while its supporters are wealthy.

A map of the Isle of Man. Image: Eric Gaba/Wikimedia Commons.

In a world gripped by economic injustice, the IoM drives social change with a programme of support to welcome the huddled masses of oligarchs yearning for freedom from autocratic tax regimes. Income tax tops out at 20 per cent but, fear not, it’s capped at £150,000. Corporation tax is nil, until your firm earns £500,000 a year; then it has to pay 10 per cent on everything over that. For mega-wealthy émigrés forced to flee odious obligations like capital gains, inheritance or wealth tax, there are opportunities to invest in local property, to get back on your feet: proceeds are taxed at 20 per cent.

The Isle of Man enjoys the same constitutional status as the Channel Islands: the UK handles its accountancy and defence, but aside from the constant vigilance required to keep Dublin at bay the only international hassle comes from Brexit. In the same way as the IoM has never been part of the UK, it’s never been part of the EU – it enjoys all the benefits (or unconscionable infringements) of membership by virtue of a legal protocol which doesn’t bestow membership. Crucially, the IoM doesn’t have any representation with the EU – it can’t, being the kind of Schrödinger jurisdiction which is neither part of the UK nor its own recognised area.


That distinction brings other problems. Regardless of how Brexit pans out, the EU has shown signs of going to war on tax avoidance – a rare political argument which unites populists and progressives. The EU now maintains lists of high risk money-laundering and tax compliance jurisdictions, and the IoM’s prominence in the international sector was part of the reason some MEPs have pushed for including the UK as a whole.

The IoM experiences the paradox of autonomy without representation. Its relationship with the UK has often been hamstrung, too, such as in 2009 when the Treasury slashed common purse funding in an attempt to nudge Douglas away from its tax avoidance platform.

Domestically, the distance between the plutocracy and everyday islanders is stark. Most people on the island are not wealthy: they rely on public services and work jobs like anywhere else. After the IoM’s funding was cut by London at the height of the financial crisis, lower and middle income earners were worst hit. Now the island has to maintain a favourable tax code for plutocrats while supporting public services used by the people who need them. It’s a difficult balance to strike, and likely to become more so if the EU pursues its anti-tax avoidance agenda post-Brexit.

Simon Jones is a writer based in Glasgow.