"A friend was asked for a parental guarantor. He's in his thirties": on the Paris rental housing crisis

More flats you can't afford. Image: Getty.

Fancy paying a fortune to live in a cupboard, but in a setting more glamorous than London? Try moving to Paris.

In the city of lights finding, finding a place to call home is like staggering around in the dark. Unbelievably high levels of competition, high rental prices and little to no space make flat hunting in Paris less enjoyable than than the smell on the Metro in summer.

At a recent expat comedy night, an American comedian noted that WTF was not just a well known acronym for a phrase to express high levels of disbelief : it can also mean, “Welcome to France”. Anyone who's arrived in France, all wide eyed and bushy tailed, will have had their enthusiasm swiftly jolted by piles of paperwork.

The rental market in Paris is notoriously complicated and bureaucratic, with landlords asking for any number of documents and references. When flat viewings such an unpleasant experience, a tip-off that a property is available amounts to a very rare golden ticket.

That doesn’t mean it’s cheap, however. Landlords expect tenants to earn a monthly salary at least three times the monthly rent. And the bi-annual cost of living index from the Economist Intelligence Unit recently ranked Paris as the second most expensive city to live after Singapore for the second year in a row. (It was ranked fairly highly in all categories apart from the cost of alcohol and tobacco, so if all the stress of finding a place drives you to indulge in such vices, then at least you can do that much on the cheap.)

Anyone unable to meet these pricey criteria for obtaining a roof over their head must find a generous guarantor. Parisian landlords are notoriously picky: a friend of mine was asked repeatedly for a parental guarantor, despite being in his thirties and financially stable. Such expectations are driven partly by the strength of tenant rights in France, but it makes getting your foot through the door and into a new home a near impossible task.

So what about those who don’t have high incomes or wealth guarantors? Look at the rental ads and you’ll come across a range of properties offering accommodation that doesn't meet the basic living standards set out by French law (a minimum floor space of 9m2, ceilings at least 1.8m high, running water, electricity, and access to a bathroom and kitchen). The Foundation Abbé Pierre an organisation working to tackle bad housing in France, has uncovered numerous case-studies of vulnerable people living in accommodation that is simply uninhabitable: in a recent study, it found that there are currently 800,000 severely overpopulated lodgings in Paris.

There is some hope. One of the government's solutions is the “Grand Paris” project, which will extend the boundaries of Paris and make the suburbs more accessible. That, though, will not sort out a problem that needs immediate action.

Last July, the Parisian government also announced that landlords must open up unused commercial spaces in the city to new purposes, such as turning them into apartments, or face fines. The plan was meant to release about 200,000m2 of office space for homes. It's a good idea – but sadly, many landlords recognised that paying the fines can be more cost effective than paying for expensive conversions.

Then there’s the Loi Duflot – a property law affecting second home owners, and named after a former housing minister. When it comes into effect in 2016, it will offer tenants tax reductions, benefits and a cap on estate agent fees. It’ll also allows landlords to rent out properties without checking with governments first. This could bring more properties onto the rental market – but it’ll likely benefit landlords more than those seeking long-term accommodation, by encouraging them to focus on lucrative short term rentals.

Tenants may also welcome the proposed rental caps, under which rental contracts will be permitted to charge no more than 20 per cent per m2 more than the median rent in their neighbourhood. Nonetheless, if all landlords choose to set their prices at the highest legal rate, then medians will still rise year upon year.

These measures do offer tenants some light at the end of the tunnel, in the form of increased regulation for landlords that make it harder for them to run amok with prices and quality. But the moment, though, in Paris, a roof over your head will remain a luxury – and a cupboard to oneself the ultimate achievement.


A new wave of remote workers could bring lasting change to pricey rental markets

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus. (Valery Hache/AFP via Getty Images)

When the coronavirus spread around the world this spring, government-issued stay-at-home orders essentially forced a global social experiment on remote work.

Perhaps not surprisingly, people who are able to work from home generally like doing so. A recent survey from iOmetrics and Global Workplace Analytics on the work-from-home experience found that 68% of the 2,865 responses said they were “very successful working from home”, 76% want to continue working from home at least one day a week, and 16% don’t want to return to the office at all.

It’s not just employees who’ve gained this appreciation for remote work – several companies are acknowledging benefits from it as well. On 11 June, the workplace chat company Slack joined the growing number of companies that will allow employees to work from home even after the pandemic. “Most employees will have the option to work remotely on a permanent basis if they choose,” Slack said in a public statement, “and we will begin to increasingly hire employees who are permanently remote.”

This type of declaration has been echoing through workspaces since Twitter made its announcement on 12 May, particularly in the tech sector. Since then, companies including Coinbase, Square, Shopify, and Upwork have taken the same steps.

Remote work is much more accessible to white and higher-wage workers in tech, finance, and business services sectors, according to the Economic Policy Institute, and the concentration of these jobs in some major cities has contributed to ballooning housing costs in those markets. Much of the workforce that can work remotely is also more able to afford moving than those on lower incomes working in the hospitality or retail sectors. If they choose not to report back to HQ in San Francisco or New York City, for example, that could potentially have an effect on the white-hot rental and real estate markets in those and other cities.

Data from Zumper, an online apartment rental platform, suggests that some of the priciest rental markets in the US have already started to soften. In June, rent prices for San Francisco’s one- and two-bedroom apartments dropped more than 9% compared to one year before, according to the company’s monthly rent report. The figures were similar in nearby Silicon Valley hotspots of San Jose, Mountain View, Palo Alto.

Six of the 10 highest-rent cities in the US posted year-over-year declines, including New York City, Los Angeles, and Seattle. At the same time, rents increased in some cheaper cities that aren’t far from expensive ones: “In our top markets, while Boston and San Francisco rents were on the decline, Providence and Sacramento prices were both up around 5% last month,” Zumper reports.

In San Francisco, some property owners have begun offering a month or more of free rent to attract new tenants, KQED reports, and an April survey from the San Francisco Apartment Association showed 16% of rental housing providers had residents break a lease or unexpectedly give a 30-day notice to vacate.

It’s still too early to say how much of this movement can be attributed to remote work, layoffs or pay cuts, but some who see this time as an opportunity to move are taking it.

Jay Streets, who owns a two-unit house in San Francisco, says he recently had tenants give notice and move to Kentucky this spring.

“He worked for Google, she worked for another tech company,” Streets says. “When Covid happened, they were on vacation in Palm Springs and they didn’t come back.”

The couple kept the lease on their $4,500 two-bedroom apartment until Google announced its employees would be working from home for the rest of the year, at which point they officially moved out. “They couldn’t justify paying rent on an apartment they didn’t need,” Streets says.

When he re-listed the apartment in May for the same price, the requests poured in. “Overwhelmingly, everyone that came to look at it were all in the situation where they were now working from home,” he says. “They were all in one-bedrooms and they all wanted an extra bedroom because they were all working from home.”

In early June, Yessika Patapoff and her husband moved from San Francisco’s Lower Haight neighbourhood to Tiburon, a charming town north of the city. Patapoff is an attorney who’s been unemployed since before Covid-19 hit, and her husband is working from home. She says her husband’s employer has been flexible about working from home, but it is not currently a permanent situation. While they’re paying a similar price for housing, they now have more space, and no plans to move back.

“My husband and I were already growing tired of the city before Covid,” Patapoff says.

Similar stories emerged in the UK, where real estate markets almost completely stopped for 50 days during lockdown, causing a rush of demand when it reopened. “Enquiry activity has been extraordinary,” Damian Gray, head of Knight Frank’s Oxford office told World Property Journal. “I've never been contacted by so many people that want to live outside London."

Several estate agencies in London have reported a rush for properties since the market opened back up, particularly for more spacious properties with outdoor space. However, Mansion Global noted this is likely due to pent up demand from 50 days of almost complete real estate shutdown, so it’s hard to tell whether that trend will continue.

There’s a wide world of speculation about the long-lasting changes to real estate caused by the coronavirus, but many industry experts say there will indeed be change.

In May, The New York Times reported that three of New York City’s largest commercial tenants — Barclays, JP Morgan Chase and Morgan Stanley — have hinted that many of their employees likely won’t be returning to the office at the level they were pre-Covid.

Until workers are able to safely return to offices, it’s impossible to tell exactly how much office space will stay vacant post-pandemic. On one hand, businesses could require more space to account for physical distancing; on the other hand, they could embrace remote working permanently, or find some middle ground that brings fewer people into the office on a daily basis.

“It’s tough to say anything to the office market because most people are not back working in their office yet,” says Robert Knakal, chairman of JLL Capital Markets. “There will be changes in the office market and there will likely be changes in the residential market as well in terms of how buildings are maintained, constructed, [and] designed.”

Those who do return to the office may find a reversal of recent design trends that favoured open, airy layouts with desks clustered tightly together. “The space per employee likely to go up would counterbalance the folks who are no longer coming into the office,” Knakal says.

There has been some discussion of using newly vacant office space for residential needs, and while that’s appealing to housing advocates in cities that sorely need more housing, Bill Rudin, CEO of Rudin Management Company, recently told Spectrum News that the conversion process may be too difficult to be practical.

"I don’t know the amount of buildings out there that could be adapted," he said. "It’s very complicated and expensive.

While there’s been tumult in San Francisco’s rental scene, housing developers appear to still be moving forward with their plans, says Dan Sider, director of executive programs at the SF Planning Department.

“Despite the doom and gloom that we all read about daily, our office continues to see interest from the development community – particularly larger, more established developers – in both moving ahead with existing applications and in submitting new applications for large projects,” he says.

How demand for those projects might change and what it might do to improve affordable housing is still unknown, though “demand will recover,” Sider predicts.

Johanna Flashman is a freelance writer based in Oakland, California.