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Housing: Concern over future budgetary savings extends

Ⓒ AFP/Archives – MIGUEL MEDINA – | Building companies are alarmed at the budgetary savings being prepared on housing and fear that social landlords, who are large customers of the sector, will be affected

After consumer associations and developers, construction companies in turn worry about budget savings in preparation on housing and fear that the social landlords, large customers of the sector, will be affected.

The government was working to reassure Wednesday in the face of the concern over the screw announced on the sector. He postponed to September 22 the presentation of his “strategy” for housing.

The main concern is the decline in personal housing subsidies (APLs) paid by the State to social landlords – for their tenants – envisaged by the executive, and according to sources close to the case, it would go up to 50 or 60 euros monthly.

“For PLL beneficiaries in social housing, there will be no impact” thanks to an equivalent decrease in rents, assured the Prime Minister, Edouard Philippe, on France 2. The beneficiaries of the APL in the private sector are not “concerned”.

Social landlords would be given more favorable terms of borrowing – in particular by freezing the Livret A rate, which is used to build social housing – in return for this fall in their resources.

“We negotiate to reach a global agreement, but we will never find three billion economies” – the amount of the fall of resources of social landlords, if the rents of their 5 million tenants affecting the PLA are reduced by 50 euros-, told AFP Frédéric Paul, general manager of the Social Union of Housing (USH, 723 social landlords).

The treasury of the HLM movement, of “7 billion euros, represents only two months of activity” and includes 2 billion deposits of guarantee of the tenants, he says.

On Wednesday, construction companies to whom the social landlords provide a lot of work, with 105,000 housing units per year, more than a quarter of the national production, expressed their concern.

– ‘Recovery at risk’ –

“Any weakening of this actor, our only buffer during the crisis, would have important consequences,” said Jacques Chanut, president of the French Building Federation (FFB).

Already last week, private developers had explained that only social landlords had prevented their sales from plunging in the second quarter.

At the FFB, one has “the feeling that the arbitrations are not rendered” and one reminds the government “the promise of Emmanuel Macron: not to suppress what works”.

Mr Chanut is concerned about the future of the zero-rated loan (PTZ) granted on a means-tested basis to households who access the property – 120,000 benefited from it in 2016.

It will be “renewed in a more targeted way”, next year, “where it is most necessary for the French” ie in the so-called “tense” areas, where demand for housing strongly exceeds supply , said Wednesday the Secretary of State for the Cohesion of territories Julien Denormandie, on RTL.

“We claim to want to reduce the territorial divide, and we deny the reality of all households that want to live in medium-sized cities,” pointed Mr. Chanut, while in the first quarter 38% of PTZs were granted in tight areas.

The “Pinel” tax benefit granted to individuals purchasing housing for rent may also be refocused. These two devices have revived construction for two years.

As for the APL accession, aid granted to 500,000 households accessing the property, it would be under the hot seat, worrying Jean-Luc Mano, president of the consumer association CLCV (Consumption, housing, living environment ).

“Will we reduce the possibility for households to have access to property, while we do not touch the tax advantages granted to investors?” if he asks.

With transportation and employment, housing is one of the three sectors to generate the most savings in a 2018 Finance bill that provides for 20 billion savings.

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