Is the new “Greater Paris” authority too weak to get things done?

A stock image of Paris, the city which this story is about. Image: Getty.

Reorganising the Paris area has been a top priority for the French government for more than 10 years. It recently launched two major interventions to create a more coordinated and cohesive city-region around the capital.

The first is the announcement that it was developing an extra 200 km of underground lines throughout the region. The second is the creation of Grand Paris, a new institution that roughly corresponds to an English combined authority.

The new Paris compared to the old London. Click to expand.

Grand Paris covers an area of 7m inhabitants and accounts for 21 per cent of France’s GDP (by comparison, the Greater London Authority has a population of 8.5m inhabitants and accounts for 22 per cent of UK GDP). Grand Paris will have responsibilities over urban planning, housing, economic development, and the environment. Although it was created in January, responsibilities will be incrementally devolved between now and 2020.

The comparison continued. Click to expand.

The creation of Grand Paris is a recognition that an integrated authority is much needed and long overdue for the Paris urban area. Paris itself is significantly under-bounded, which means that the urban area extends well beyond its political border. The current Paris government (itself made up of 20 smaller arrondissements) has a population of 2m and is roughly equal to London zones 1 and 2 in size.

But unlike the Greater London Authority, in Paris there has to date been no formal coordination across the wider city-region, resulting in social and political tensions between the city and its suburbs – for example, regarding housing.

Whilst Grand Paris represents an improvement on the current state of urban governance, the project (which was first initiated in 2008) has faced considerable opposition from local politicians, and is a relatively weak institution.

First of all, Grand Paris has to fit within an already heavily fragmented local government structure in France. The area covered by Grand Paris has 131 municipalities, newly gathered into 12 “territories”, each belonging to four départements. And all of this – including Grand Paris itself – belongs to the larger Ile-de-France region.

This administrative millefeuille, a culinary metaphor the French like to use to refer to the multiple (and many argue redundant) layers of local government, considerably affects Grand Paris’ ability to act, as many of its responsibilities will be shared between authorities.

For instance, although Grand Paris holds economic development powers, including urban regeneration and the development of commercial and industrial zones, it is specifically required to take account of the priorities of the Ile-de-France region, which controls important economic development responsibilities such as support to businesses. And while Grand Paris has a wide range of responsibilities relating to housing, including financial support to house building, planning permissions are still granted by individual municipalities.

The budget is also limited. Grand Paris has a budget of €3.7bn, but most of the money will actually be redistributed to municipalities, leaving Grand Paris with only €65m to directly invest. In comparison the Paris government has a budget of about €8bn, and the Ile-de-France region has €5bn.

And although this budget will incrementally increase over time alongside the acquisition of new responsibilities, even after 2020 Grand Paris will remain strongly reliant on government grants. Its only other source of revenue is a local business tax – even though, in France, equivalent metropolitan structures can usually raise a set of property and business taxes.

Finally, Grand Paris will find it difficult to provide strong leadership of the area. It is led by a metropolitan council, composed of 209 municipal councillors (that is, councillors from the 131 individual municipalities) who will elect a president. But it will be hard for the President to act as a political leader given the large number of discontented local politicians, who have their own (arguably greater) democratic legitimacy through the ballot box.

It has taken eight years to set up an institution that many local councillors feared would hamper their powers. Addressing these fears has meant adopting a very consensual approach which has ultimately resulted in the creation of a relatively weak institution.

Overcoming these issues will be critical to avoid Grand Paris becoming another superfluous layer in the French millefeuille.

Hugo Bessis is a researcher for the Centre for Cities.

This article was originally posted on the think tank's blog.


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.